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Saturday, 1 October 2016

Fast 7: To the Malaysians who are now in Australia...

I had noticed that many former or current Malaysians who have now moved to Australia likes to continually attack the Malaysian government over several issues, which is normally propagated by the PakaTun politicians.

Among these issues which they like to use to whack Malaysia are these 7 :

1.  Malaysia is going bankrupt due to high household debts.

This is the most strange as the commonly cited Malaysia's household debt to GDP is 89%. But Australia's ratio just overtook Switzerland and Denmark (both of which is about 120% too) to became the highest in the world earlier this year at 125.2%.

If you don't like to read graphs then you can read about it here in the article titled "How Australian households became the most indebted in the world".

2.  Malaysia is going bankrupt due to high government debts.

They say that Najib has increased the govt debt greatly since he became PM and that the Govt debt to ratio has jumped 13% from 41.24% in 2008 to 53.9% now. This was mainly due to the Great Global Recession that started that year and Najib did some pump priming to save Malaysia from a bad recession when he took over.

However, what is lost to those Malaysians in Australia is that the Govt Debt-to-GDP ratio in Australia also jumped since 2008.

In fact, it jumped more - 25% from 11.7% to 36.8%.

Looking at the current trend and the fact that the Australia economy is struggling now due to the slump in commodity prices and reduced demand from China, many believe that this will continue to grow and could overtake Malaysia soon - whereas Malaysia's ratio has been relatively stable over the past few years.

But the thing is, Malaysia is far from going bankrupt even at 53.9% as at current ratio, there are 71 other countries way ahead of Malaysia in terms of Govt Debt-to-GDP ratio indluign Japan, France, USA, Germany, UK etc.

Also, Malaysia had a ratio of 103.4% in 1985 so if Malaysia did not go bankrupt then, how is it that we go bankrupt now at 53.9%?

3.  Malaysia is going bankrupt due to high External (Foreign) debts.

Well, Malaysia doesn't owe any money to IMF and World Bank (we cleared these decades ago). Based on the expanded definition from 2 years ago to comply with international standards which includes foreign ownership of bonds and bank deposits in Malaysia owned by foreigners, Malaysia's external debt is now RM846 billion - or about 66% of our GDP.

But Australians should know that their gross external debt is now AUD 1.94 TRILLION or about RM6,130 billion - this is about 120% of Australia's GDP of AUD1.62 trillion.

In fact, foreigners own a huge piece of Australia.

A country's international investment position (IIP) is a financial statement setting out the value and composition of that country's external financial assets and liabilities. A positive NIIP value indicates a nation is a creditor nation, while a negative value indicates it is a debtor nation.

A news missed out by most people at the end of 2015 is that due to the Ringgit depreciation in 2014 and 2015, the fact that the majority of our government debt is in Ringgit and our continued trade surplus, Malaysia reverted to a net creditor nation status in the year 2015 - certainly very different from what PakaTun saying that we are bankrupt or failed state.

What this means is that Malaysia owns more assets overseas than foreigners own in Malaysia - meaning Malaysia is very good at investing abroad.

There is only a very short list of countries of probably 18 major countries in the world who are in a net creditor status.

And as at end of last year, Malaysia is one of them.

Australia does very poor in this area. Australia's net IIP liability position (as opposed to surplus in Malaysia) was A$1,012.1b at 31 March 2016, an increase of A$51.4b (5%) on the revised 31 December 2015 position of A$960.8b. 

4.  Malaysia is losing competitiveness and their foreign trade is suffering.

Actually, Malaysia has consistently been exporting more than it imports. In fact, July's trade surplus, despite low oil and gas prices, marks Malaysia's 225th consecutive month of trade surpluses recorded since November 1997.

Australia trade balance fluctuates quite a bit and has been in trade deficits recently - including a deficit of AUD 2.41 billion in July of 2016, As you can see from the graph, the Aussie trade balance frequently enters negative territory 

5.  Malaysia's economy will be destroyed due to implementing GST

Of course this is utter bullshit since 170+ countries have already implemented GST or will implement it by 2018.

Australia's GST rate of 10% was implemented in the year 2000 - a full 15 years before Malaysia implemented ours at 6% in 2015.

Let's not even talk about comparing personal or corporate tax - we all know Australia's tax rate is much higher than in Malaysia.

6.  Because of Najib, Malaysia is experiencing a big drop in foreign reserves as investors pull out money - that is why Malaysia's currency is shite.

Well, did you know that Malaysia's FOREX reserves at USD97.7 billion is more than double of   Australia? USD47,3 billion as at end August 2016?

Well, now you know.

In fact, it may surprise you that since Najib took over as PM in April 2009, the Aussie Dollar actually hasn't changed much against the Ringgit - and in fact spent much of its time being lower against the Ringgit until only the past two months where the Aussie dollar recovered some ground.

7.  Recent gun murders shows Malaysia is unsafe

Well, there were a few sporadic cases hat happened which our police have mostly solved.

Comparing gun murders is not pretty but then Australians should know that both Melbourne and Sydney have seen gun shootings and deaths spike over he past year.

You can read the article Scary trend in Australian gun crime with more than 200 shooting deaths a year

And then there are those Malaysian-Australians who would say that there are extremists in Malaysia but You’ll Never Guess Which Country Is the Biggest Per Capita Contributor of Foreign Fighters to ISIS.  It isn't Malaysia, the Middle East or Central Asia or even in Europe. It's Down Under

Other little facts also show that Malaysia's nominal GDP growth is faster, Australia's unemployment rate is higher, you are more likely to afford having maid here in Malaysia and also if you are an Asian (or a Muslim), you'll more likely to run into racism or racist taunts on the streets of Australia than you would in Malaysia.

And those fighting for the rights to have vernacular education in Malaysia while over there in Australia would note that there are no vernacular schooling system in Australia.

Some even parrot the opposition line about the cost of the pandas in Malaysia saying we are wasting money but are ignorant that Australia also received pandas from China where they pay the exact same amounts to China since it is a uniform worldwide policy. But like I had written before, the Panda diplomacy  in giving pandas to countries they most favour actually have big trade benefits far outweighing whatever cost you pay.

Of course, being a ex-Malaysian or a Malaysian now staying in Australia gives you the right to criticize Malaysia but please do criticize based on actual facts and don't parrot the lines of the PakaTun propaganda here in Malaysia coz if you drill-down, you may get embarrassed by the hard facts.

But really, there is little need to whack your ex-country as you already made your choice where to call home - especially if your main source of propaganda and "news" about Malaysian has been these online portals and FB postings from the Red Bean Army cybertroopers. Here are some recent examples of these propaganda online:

  1. If you repeat them enough times (Part 1)
  2. My reply to "Tun Daim"
  3. Answering A Kadir Jasin

As with all the other countries in the world, both places have their pros and cons.

Australia has excellent Mediterranean weather though - especially in the coastal cities.

But our durians are much better (yes, Australia also grows durians).

Saturday, 3 September 2016

Answering A Kadir Jasin's "Kewangan Kerajaan Pusat genting"

Yesterday, I had posted a reply to the irresponsible fake "Tun Daim" whatsapp message that is circulating. I had pointed out that the message sole purpose seems to be spreading lies to incite hatred and fears about the economy which would stop people from spending and investing - a self-fulfiling prophecy that if left unchecked, will cause damage to our economy.

Today, yet another stalwart of Mahathir has published an article in Sinar Harian that also seems to have the same purpose as the "Tun Daim" message.

A Kadir Jasin, a long-time Mahathir supporter, said that Malaysia's government debt had increased from RM250 billion in 2010 to RM656 billion in June this year.

Well, A Kadir is wrong. The govt debt in 2010 is RM407.1 billion or 53.15% of our GDP. How can Kadir make such a shocking mistake or was he trying to deceive?

Even at RM656 billion, our government debt is still within the 55% debt to GDP ratio limit as our economy has expanded since 2010.

Does Kadir also realize the size of Malaysia's GDP/economy today is almost 3 1/2 times the size of what it was when Mahathir retired in 2003?

As long as our ratio is within limits, the overall debt can grow as our yearly income and economy size will also grow.

A simple illustration to show this:

Who is more likely to go bankrupt first?

A person whose income is RM36k per year but  have debt of RM40k (Malaysia's GDP in 1987 is USD36 billion and govt debt was USD40 billion) or a person whose income is now RM350k per year and have debt of RM130k? 
Even though the actual debt amount is now 3 times more but the person whose income is RM36k per year will go bankrupt first.

Here is an excerpt from the 2012 book "Malaysia's Development Challenges: Graduating from the Middle". You can also google for Malaysia's debt-to-GDP in the 1980s and what Mahathir did in his first 7 years in charge.

We did not go bankrupt and our country crash and burn at more than 100% Debt-to-GDP so why should we go bankrupt now at 55%?

Here is a more comprehensive chart showing this relationship:

As mentioned yesterday, according to the CIA's world factbook, Malaysia at 54% is at 71st place in the countries with the highest debt to GDP ratio.

According to PakaTun logic, this means that these 70 countries will have to go bankrupt before Malaysia's turn.


Those who hate our government and wishes for Malaysia will just simply have to wait in line behind those countries mentioned above.

Kadir also said that Malaysia is running a budget deficit but conceded that it has reduced from 6.7% in 2009 to 3.2% in 2015.

But does Kadir know that Najib ran a bigger deficit in 2009 and 2010 to save our economy from the Great Global Recession (the worst since the Great Depression in the 1930s) but since 2011, have run a deficit that is smaller (and getting increasingly smaller) compared to the last 5 years that Mahathir ran the country up to 2003?

As you can see, Malaysia's budget deficit is getting progressively smaller due to good management. This is why the World Bank and IMF praises Najib's government on economic management and the major international credit ratings agencies all have A- investment grade ratings and a stable outlook for Malaysia.

If Kadir really wants to warn someone regarding unrestrained government spending then I suggest he writes an open letter to Mahathir's allies in the DAP Penang Government as their state annual spending has jumped many folds since they took over in 2008. They are definitely more in need of an "A Kadir Jasin" warning.

Kadir ended his article with saying that the government should be truthful to the rakyat on the true state of the economy and that the "Ekonomi tidak berbohong" or "The economy doesn't lie".

I agree but he did not say that Mahathir's supporters won't lie when writing about the economy.

Mahathir supporters and the opposition are the ones who should be truthful on the true state of the economy instead of inciting fears based on false data or faulty interpretation.

Najib saved us from the Great Recession following the US Sub-prime crash in the 2007-2008. By all accounts and data (instead of air liur), the economy has been well managed despite a big slump in oil revenues amidst the commodities crash in second half 2014 until now.

Let's have confidence that Najib's government will continue to steer us well. He has not failed like Mahathir had.

Throughout Mahathir's 22 years in charge, he led us through two very severe recessions in the mid 1980s and in 1998 and three major slowdowns - the last of which was just before he retired.

In the face of the current BREXIT and the China slowdown, which are global issues, it is better for people like Kadir and their gang to support and instill confidence in the economy rather than trying to intentionally or inadvertently harm the economy.

I wrote this yesterday but will repeat it again:

The opposition frequently spread false, misleading lies such as this to destroy confidence in what is known as a "self-fulfilling prophecy". Imagine if everyone believe what is in this message then no one will spend and if no one will spend then all the shops will close down, he factories will also close down and then the banks will close down and et cetera. Somewhere along the line, you and I and everyone else will also lose their jobs or business.

Therefore, spreading such lies is not helpful to Malaysia but you are harming Malaysia and ourselves.

These people don't care what happens to Malaysia as long as they get what they want. They think that if the economy is bad then it is easier for them to win power. These people are despicable.

Do not fall for their lies and spread such negative messages to incite hate, create fear which will eventually end up hurting ourselves.

Stop it, you fake hateful people with hidden agenda.

Trying to destroy your own country's economy and bringing harm to tens of millions just for your political agenda is not only treachery but brings to mind the following saying.

"Don't cut off your nose to spite your face."

My Reply to "Tun Daim", msg from a friend from the financial sector....

(Versi Melayu ada di bawah)


This is my reply to you (your message in italics and mine in bold):

Just Sharing a msg from a friend from the financial sector....
Malaysian Currency is expected to depreciate further to RM 4.50 by end of September as Ringgit is not used as currency's for trading in world stock exchange. Ringgit will stumbled as the govt further cut on export of crude oil due to over over supply.

Currency go up and down. Right now we are at USD1 to RM4.00 but we were at USD1 to RM4.47 at the beginning of the year. Our lives did not change much when our ringgit depreciated from RM3:20 to RM4.00 over the past few years. Neither did we suddenly become richer when our currency appreciated from RM3.73 to RM3 from 2008 to 2012. Similarly, the United Kingdom also did not go bust when the UK pounds depreciated from £1 to RM6.75 in Oct 2015 to RM5.20 just recently.

In fact, a weaker Ringgit allows us to compete stronger as was evidence by our continued improvement in foreign trade and our trade surplus where our manufactured and services industry benefited strongly despite the weakness in GLOBAL oil prices, which is beyond the control of Malaysia. This will help Malaysia further diversify our economy so we will be less dependent on commodity exports.

Everyone should take precaution as this is a economy disasters as a whole. Bank Negara held reserved is only RM101 billion at this moment. But Our debt has climbed to Rm 614,880,270 billion. Which means each tax paying citizen has a debt of Rm18,835. Current advice is Stop investing in any ventures , properties or car. Cash in hand is Disaster is on the way.
You have the amount of our BNM reserves correct but the currency is wrong. Our current BNM reserves is not RM101 billion but USD101 billion (or thereabouts as it fluctuates too), meaning RM400 billion. I am surprised that a "Tun Daim" would make such a silly mistake.

As for our govt debt, don't just look at the absolute amount but the debt to GDP ratio which means our debt compared to our yearly income. We are at about 54% right now. When Mahathir became PM in 1982, he ramped up this ratio from 40% to more than 100% within 5 years and we didn't go bankrupt then. Neither will we go bankrupt now at 54%.

In fact, according to the CIA's world factbook, Malaysia at 54% is at 71st place in the countries with the highest debt to GDP ratio - meaning 70 other countries have to go bankrupt first before reaching Malaysia's turn - and this includes countries such as Japan,, Singapore, UK, USA, Germany etc..

Penang has right now embarked on a Transport Masterplan project costing RM46 billion where the state govt said they will borrow to fund the project. Divided by 1.6 million people in Penang, this will mean RM28,750 per person And if you believe RM18,835 per person will make Malaysia bankrupt then RM28,750 per person would mean Penang will go bankrupt faster than the rest of the country.

World Economic Analyst predict within the next 3 months, Malaysia economy . will collapse. Stock market & currency value will take a nose dive in a drastic manner.
This is due to world negative economic outlook for the year 2017

I think we have heard this many times. Which "World Economic Analyst" are you talking about? Malaysia is still enjoying robust 4.1% GDP growth over the past 6 months, our stock market is still double of what it was in 2009 and our trade surplus and reserves are strong. So, how are we going to collapse?

Crude oil will crash due to oversupply. As Americans are pumping more crude oil. The reasons: i) to hurt Russian's economy and her currency as Russian is world's no1.ii) ISIS in order to finance their survival is also selling cheap smuggled crude oil from Syria & Iraq thus flooding the oil market..
Malaysia's oil production will be hit due to this...apart from the current political uncertainty and corruption which discourages foreign investments...

Our oil production and exports were already hurt - in 2009, oil represented 44% of our govt revenues and it is only 17% last year and 11% this year. And we still did not collapse. Even if it drops another 11% and it goes to zero oil revenues, we won't collapse as our other industries such as manufacturing and services and our domestic economy will continue to drive our growth.

The world has perceived Malaysia as ranking no.1 for : i) Corruption & Scandals and financial forgery in money laundering. .

Actually, Malaysia is ranked at 54th least corrupt out of 179 countries in the latest Transparency International Corruption Perception Index - certainly not number one. I am not sure who ranked us number one but it is certainly not any recognized bodies.

So my dear friends,please spend your money wisely. Keep your Money for rainy days. As we are heading towards difficult and bumpy days . The journey will be tough & unpredictable. This will hit hard on all of us, regardless whether you are rich or poor. All the best to All ..............Tun Daim
It is always good to spend where it is necessary but such fake whatsapp messages such as yours are frequently spread by sneaky opposition parties to destroy confidence in the Malaysian economy.

Therefore, the opposition frequently spread false, misleading lies such as this to destroy confidence in what is known as a "self-fulfilling prophecy". Imagine if everyone believe what is in this message then no one will spend and if no one will spend then all the shops will close down, he factories will also close down and then the banks will close down and et cetera. Somewhere along the line, you and I and everyone else will also lose their jobs or business.

Therefore, spreading such lies is not helpful to Malaysia but you are harming Malaysia and ourselves.

These people don't care what happens to Malaysia as long as they get what they want. They think that if the economy is bad then it is easier for them to win power. These people are despicable. Do not fall for their lies and spread such negative messages to incite hate, create fear which will eventually end up hurting ourselves.

Stop it, "Tun Daim" and the rest of you fake hateful people.

Malay version follows:

Kerapkali berlegar di kalangan pengguna aplikasi telefon pintar, mesej menggunakan nama ‘Tun Daim’ kononnya menceritakan mengenai ekonomi namun ditulis secara terpesong. Ia akan dikongsikan pelbagai pihak tanpa memeriksa kesahihannya. Terkini, mesej menggunakan nama 'Tun Daim itu mendakwa kononnya ekonomi Malaysia akan runtuh. Berikut dipaparkan jawapan kepada ‘Tun Daim’ mengenai ekonomi negara: DUHAI "TUN DAIM", Ini adalah jawapan saya kepada anda. ‘Tun Daim’ mendakwa: Hanya berkongsi satu mesej daripada seorang rakan daripada sektor kewangan.. Nilai matawang Ringgit dijangka akan menyusut kepada RM4.50 menjelang hujung September ini kerana Ringgit tidak digunakan sebagai matawang dagangan saham dunia. Ringgit akan runtuh kerana kerajaan menyekat eksport minyak mentah ekoran lebihan bekalan. JAWAPAN SAYA: Nilai matawang akan turun dan naik. Ketika ini, Ringgit adalah USD1 kepada RM4.00 dan kita pernah berada pada USD1 kepada RM4.47 awal tahun ini. Kehidupan kita tidak terjejas ketika ringgit menyusut daripada RM3.20 kepada RM4.00 pada beberapa tahun ini. Kita juga tidak tiba-tiba menjadi kaya apabila nilai matawang kita meningkat daripada RM3.73 pada 2008 kepada RM3 pada 2012. Begitu juga dengan United Kingdom yang tidak runtuh apabila Pound UK menyusut daripada £1 bersamaan RM6.75 Oktober lalu dan kepada RM5.20 just baru-baru ini. Malah, Ringgit yang lemah membolehkan kita bersaing lebih kukuh dan ini dibuktikan dengan peningkatan berterusan dalam dagangan asing dan lebihan dagangan di mana industri perkhidmatan dan pengeluaran menerima manfaat lebih baik disebalik kelemahan harga minyak dunia, yang di luar kawalan Malaysia. Ini akan membantu Malaysia untuk mempelbagaikan ekonomi negara agar kurang bergantung kepada eksport komoditi. ‘Tun Daim’ mendakwa: Semua perlu mengambil langkah berjaga-jaga kerana ia adalah keruntuhan ekonomi secara keseluruhan. Rizab Bank Negara pada ketika ini adalah RM101 bilion. Tetapi hutang kita telah melonjak kepada RM614,880,270 bilion. Ini bermakna setiap cukai dibayar rakyat menanggung hutang RM18.835. Nasihat pada ketika ini ialah berhenti melabur dalam apa juga pelaburan, hartanah dan kereta. Tunai dalam tangan adalah selamat kerana malapetaka bakal menimpa. JAWAPAN SAYA: Anda menulis jumlah rizab BNM dengan tepat sekali namun dalam matawang yang salah. RIzab BNM ketika ini bukanlah RM101 bilion tetapi USD101 bilion, bermakna berjumlah RM400 bilion. Saya terkejut kerana seorang bernama ‘Tun Daim’ boleh melakukan kesilapan yang mengarut seperti itu. Dan bagi hutang kerajaan pula, jangan melihat kepada jumlah semata-mata tetapi antara nisbah hutang berbanding Keluaran Dalam Negara Kasar (KDNK) di mana ia bermakna hutang berbanding perolehan tahunan negara. Kita adalah pada paras 54 peratus ketika ini. Ketika zaman Tun Dr Mahathir pada 1982, beliau telah meningkatkan nisbah hutang daripada 40 peratus kepada 100 peratus dalam tempoh 5 tahun namun kita tetap tidak bankrap. Kita juga tidak akan bankrap pada 54 peratus. Malah, berdasarkan kepada laporan fakta Agensi Perisikan Pusat (CIA) Amerika Syarikat, Malaysia dengan hutang 54 peratus berada di kedudukan 71 bagi negara mempunyai nisbah hutang tinggi berbanding KDNK, bermakna ia memerlukan 70 negara lain untuk bankrap terlebih dahulu sebelum tiba kepada giliran Malaysia, dan ini termasuk negara seperti Jepun, Singapura, UK, Amerika Syarikat, Jerman dan lain-lain. Pulau Pinang kini memulakan projek Pelan Pengangkutan melibatkan kos RM46 bilion di mana kerajaan negeri diterajui DAP itu mengesahkan akan membuat pinjaman bagi membiayai projek itu. Dibahagikan kepada 1.6 juta penduduk di Pulau Pinang, ia bermakna setiap rakyat Pulau Pinang menanggung RM28,750 setiap seorang. Jika anda percaya RM18,835 boleh membuatkan Malaysia bankrap, ia bermakna RM28,750 setiap seorang akan membuatkan Pulau Pinang bankrap lebih pantas daripada negara ini. ‘Tun Daim’ mendakwa: Penganlisa Ekonomi Global mengunjurkan bagi tempoh tiga bulan akan datang, ekonomi Malaysia akan runtuh. Pasaran saham dan nilai matawang akan menjunam dalam keadaan drastik. Ia lantaran unjuran ekonomi dunia yang negatif bagi tahun 2017. JAWAPAN SAYA: Saya rasa kita sudah mendengar dakwaan ini banyak kali. ‘Penganalisa Ekonomi Dunia’ manakah yang anda maksudkan? Malaysia masih lagi menikmati pertumbuhan menggalakkan sebanyak 4.1 peratus bagi tempoh 6 bulan ini, pasaran saham masih lagi berganda berbanding 2009 dan lebihan dagangan serta rizab masih lagi kukuh. Jadi, bagaimanakah agaknya kita akan ‘runtuh’? ‘Tun Daim’ mendakwa: Minyak mentah akan runtuh lantaran lebihan bekalan. Memandangkan Amerika Syarikat mengeluarkan lebih banyak minyak. Alasannya ialah: i) bagi menjejaskan ekonomi Russia dan matawangnya kerana Russia berada di kedudukan pertama dunia. Ii} ISIS dalam membiayai penjajahan mereka turut menjual minyak mentah seludup daripada Syria dan Iraq turut menjualnya pada harga murah hingga membanjiri pasaran minyak mentah. Pengeluaran minyak Malaysia akan terjejas berikutan keadaan ini, selain ketidaktentuan politik Malaysia dan rasuah yang mengekang pelaburan asing. JAWAPAN SAYA: Pengeluaran minyak dan eksport kita sudahpun terjejas, pada 2009, minyak mewakili 49 peratus daripada pendapatan kerajaan dan hanya 17 peratus pada tahun lalu manakala 11 peratus sahaja tahun ini. Namun kita masih tidak lagi runtuh. Jika ia jatuh kepada 11 peratus lagi sekalipun dan tiada pendapatan daripada minyak sekalipun, kita tidak akan runtuh kerana industry lain seperti pengeluaran dan perkhidmatan serta ekonomi domestik kita masih terus mengukuhkan pertumbuhan ekonomi negara. ‘Tun Daim’ mendakwa: Dunia telah menganggap Malaysia berada di kedudukan nombor 1 bagi i) Rasuah dan skandal serta penipuan kewangan dalam pengubahan wang. JAWAPAN SAYA: Sebenarnya, Malaysia berada di tempat 54 bagi negara yang paling kurang rasuah daripada jumlah 179 negara paling rasuah melalui Indeks Persepsi Transparency International, dan bukannya nombor satu. Saya tidak tahu siapa yang meletakkan kita di nombor satu, tetapi tentunya bukan sebuah badan yang dikenali. ‘Tun Daim’ mendakwa: Maka, sahabat sekalian, belanjalah wang dengan cermat. Simpan wang anda untuk waktu terdesak. Kerana kita menuju kea rah kesulitan dan kesusahan. Perjalanan ini akan lebih sukar dan tidak dapat dijangka. Ia akan menjejaskan kita semua, tak kira anda kaya atau miskin. Ucap selamat kepada anda semua.. Tun Daim. JAWAPAN SAYA: Adalah baik untuk berbelanja kepada keperluan tetapi mesej whatsapp palsu seperti daripada anda ini semakin kerap disebarkan oleh pihak pembangkang bagi memusnahkan keyakinan pada ekonomi Malaysia. Pembangkang kerap menyebarkan penipuan, cerita palsu bagi meruntuhkan keyakinan bagi memuaskan nafsu politik mereka. Bayangkan jika semua orang percaya penipuan dalam mesej ini dan tiada siapa pun akan berbelanja dan apabila tiada sesiapa berbelanja, maka tutuplah kesemua kedai, kilang juga akan tutup dan bank juga akan tutup. Pada masa yang sama, anda atau saya akan kehilangan pekerjaan atau perniagaan. Untuk itu, menyebarkan tipu daya seperti ini tidak akan membantu Malaysia tetapi anda sendiri akan merosakkan Malaysia dan diri kita. Manusia seperti itu tidak peduli apa akan jadi kepada Malaysia asalkan mereka mendapat apa yang mereka mahukan iaitu melihat Malaysia menjadi rosak. Mereka fikir, jika mereka dapat merosakkan ekonomi negara, ia akan lebih mudah untuk mereka merampas kuasa. Manusia seperti ini adalah manusia jijik. Jangan terperdaya kepada penipuan mereka dan menyebarkan mesej sarat dengan penipuan mereka bagi mencetuskan rasa benci, ketakutan yang akhirnya akan merosakkan kita semua. Hentikanlah duhai ‘Tun Daim’ serta anda semua yang palsu dan penuh kebencian.

Thursday, 18 August 2016

Domestic arrests: IPIC's ex-MD Khadem Al Qubasi taken into custody in Abu Dhabi

Quoting people familiar with the matter, WSJ had just reported that Abu Dhabi authorities have arrested Khadem Al Qubaisi,  the 14th most powerful man in the Arab world in 2015.

"The arrest last week was made in relation to an Abu Dhabi investigation into fraud and corruption, which includes Mr. Qubaisi’s alleged role in the 1MDB, affair," WSJ said.

But no charges have been filed against Khadem.

The part that I found most intriguing is that WSJ also said that "the U.S. investigators are also probing the financing of a mega yacht controlled by Sheikh Mansour called the Topaz, which at 482 feet is the world’s fifth largest, according to people familiar with the investigation."

This was the yacht that Jho Low and Leonardo Dicaprio had used to watch the World Cup Finals in Brazil in 2014. It is widely known that it belongs to Sheikh Mansour.

WSJ also alleges that the US Govt is investigating if funds from 1MDB was also used to fund the expansion of "night club" chain Hakkasan.

Founded in 2001 by Hong Kong born Alan Yau - a Hakka Chinese, Hakkasan became the two trendiest Chinese restaurants in England. Hakkasan could mean Mountains of Hakka in Cantonese.

The two Hakkasan restaurant was sold for US$60 million to the then reported Abu Dhabi state company of Tasameem in January 2008 - way before Najib became PM or 1MDB even existed.

It was rumoured to have been sold after Sheikh Mansour had a meal there and was so impressed. Later in that year, Sheikh Mansour bought the Manchester City Football Club.

Hakkasan then went on a large-scale international expansion to become a global lifestyle chain which included night clubs.
Hakkasan's famous nigh-club in Las Vegas MGM
H.H. Sheikh Mansour Bin Zayed Al Nahyan is the Deputy Prime Minister and Minister of Presidency Affairs in the United Arab Emirates Cabinet. He is also the Chairman of IPIC and is considered the second or third most powerful man in Abu Dhabi.

Sheikh Mansour, Deputy Prime Minister and Chairman of IPIC. Also owner of Man City.

He is the half brother of the current President of UAE, Khalifa bin Zayed Al Nahyan and Sheikh Mohammed bin Zayed al-Nahyan, the Crown Prince of Abu Dhabi,

President of UAE, Khalifa bin Zayed - half brother of Deputy President Sheikh Mansour 

The 2013 JV signing between Aabar and 1MDB - represented by the Crown Prince of Abu Dhabi and half-brother to Sheikh Mansour, Chairman of IPIC
Since suffering a stroke in 2014, the president of UAE Khalifa had rarely been seen in public with most of his official duties seems to taken over by the crown prince.

It is widely believed that Khadem Al Qubasi is a loyalist of Sheikh Mansour,

Even in the 2008-2009 as Euromoney had reported citing documents, Khadem held shares and options on behalf of Sheikh Mansour worth billions of pounds during the very profitable bail out of England's Barclay's Bank from the subprime crisis which they profited by about £3 billion within a couple of years.

As of 2011, according to the Guardian, Sheikh Mansour had a net worth of USD34 billion U.S. dollars and has owned Manchester City F.C. since 2008.

If it is true that the Abu Dhabi govt had arrested Khadem but strangely not charged him, then it adds an interesting domestic political angle to the 1MDB and IPIC story.

It would be interesting to see how this plays out as how it plays out will also affect 1MDB and the ongoing arbitration between IPIC and 1MDB in London. 

Friday, 29 July 2016

DAP Penang: If you repeat them enough times ...(PART I)

Last night, for the umpteenth time the DAP Secretary-General and Penang Chief Minister boasted yet again that Penang has the lowest debt and claimed credit for it.

MalaysiaKini reported this:

CM: Penang needs some debt so it can ask Najib for money 
Penang's RM1.5 billion in reserves outweigh its federal debt of just RM69 million, boasted chief minister Lim Guan Eng. 
But while the state can easily pay off what it owes Putrajaya, Lim said some debt is necessary. 
"I can call my financial officer right now and tell him, 'Datuk, go to the ATM machine and pay the federal government'. 
"But we have to keep some debt so that we can ask for money from Prime Minister Najib Abdul Razak," he said in jest at a fundraising dinner in Kuala Lumpur last night. 
He said that if Penang had no debt, the federal government would assume it was well off and did not need more money. 
Penang's federal debt is the lowest in Malaysia.
Propaganda is all about repeating a half-lies enough times until people start believing it is true.

And DAP is very good at this. They have repeatedly claimed credit for this half truth probably hundreds of times since the year 2011.

Unfortunately, it is a half-truth at best.

Misleading Propaganda 1: DAP Penang is great as it reduced State Debt by 95% due to good governance.

This propaganda has been repeated hundreds of times by DAP. It is a half-lie actually.

Let's look at page 38 of the Auditor-General's Audit Report 2012 on the Penang state finances.

Yes. The Penang state debt was increasing every year until the year 2011 when it mysteriously dropped 95% within a year.

This was because the Penang Government struck a deal with Najib's Federal Government where the Penang Govt gave state assets to the Federal Government and leased it back.

Essentially, the Penang Govt just changed an existing RM655 million loan into a 45 years annual lease where the Penang Govt must pay RM14.56 million to the Federal Govt every year for 45 years.

RM14.56 million X 45 years = RM655.2 million.

Which means, the Penang Govt is essentially PAYING THE SAME AMOUNT!

To the easily-cheated supporters of DAP and gullible Penang people, they would not know the difference - allowing DAP to keep repeating this shameless propaganda over and over again since the year 2011 to cheat the people.

I am not sure how thick-faced you need to be to keep repeating this in public.

If you don't believe me, listen to this fellow who thanked the Federal Govt in the year 2011 for doing this deal.

Chief Minister, YAB Lim Guan Eng said that the Federal Cabinet has approved the restructuring and migration exercises subject to the following terms and conditions:- 
• the state’s outstanding loan of RM655.24 million to the Federal government will be interest-free and rationalized by alienating state land related water assets to PAAB for a period 45 years. PAAB will lease back the water assets to PBAPP for 45 years. PBAPP shall pay PAAB a yearly lease rental of RM 14.56 million and upon settlement of the lease at the end of 45 years, the state land will automatically revert back to the state;
• the funding of Mengkuang Dam expansion project of RM 1.2 billion will be given as a grant by the Federal Government;
When Lim Guan Eng made the above press statement he has pretty much confirmed that it was the Federal Govt taking over Penang State assets and convert  the loan to a lease (which is the same thing as you end up paying the same amount) which has allowed DAP to keep claiming they have reduced 95% of the Penang State Debt due to "good governance".

Not only that, but that same press statement of his also betrayed another long-standing propaganda that the Federal Government does not help the Penang State Govt. Not only has the Federal Govt waived the 3% interest on the previous soft loan but it had also given RM1.2 billion free grant to the Penang Govt for a much-needed dam expansion.

What kind of persons who got helped by someone and then use this help to mislead others and repeatedly over 6 years to whack back the same persons who helped you?

Misleading Propaganda 2: Under DAP, Penang has outperformed Malaysia in economic growth due to DAP's "Good governance"

The following table was released by the Penang State Govt owned Penang Institute last year.

According to DAP MP Zairil Khir when he said Penang will bounce back after the recent mass factories closing , that table is not updated but the actual growth, instead of forecast growth for Penang is higher at 7.4% for 2014 and 6.2% for 2015.

Penang had benefited from the weak Ringgit in 2014 and 2015 as electronics manufacturers exports more - hence the better 2014 and 2015 figures.

Therefore, based on Penang Institute's figures and Zairil's clarification, I have come out with the following table

And these are the official figures from the Penang Govt's Penang Institute themselves here.

Despite DAP's continued propaganda that Penang has enjoyed much better economic growth compared to Malaysia,, the actual official figures do not suggest that.

According to the state-owned Penang institute itself, Penang's economy has under-performed the national average for the entire 2008-2015 period.

Correspondingly, the BN Penang Gov's last two years in charge showed that Penang grew faster than the national average - despite what DAP claims.

Misleading Propaganda 3: Penang govt spending is well-managed under DAP and our state reserves has increased due to our good governance

If you think that there is nothing wrong that Penang Govt now spends almost 4 times as much per year of Wang Rakyat compared to 2008 and that aggressively selling depleting state land and assets to fund this dramatic increase in spending is "good management" then you can stop reading here.

In fact, without selling state land, the Penang Govt would have been in BIG and INCREASINg DEFICITS for the past 5 years straight.

If you want to know more, please read my past article titled "Penang financial management: An unsustainable bloat?" for the details.

Misleading Propaganda 4: Penang is number one state for investment in the entire Malaysia

Lim Guan Eng and DAP used to repeatedly boast (and still do) that they are number one in investments among all the states in Malaysia.

That may be true twice - for the years 2010 and 2011 - but to a large extent was from the good work of the previous BN state government as it takes a few years before a large investment is committed.

At that time, Lim Guan Eng had quoted these figures from the Federal Govt agency MIDA and you can verify the table below from the same information from MIDA here.

Since 2011 though, Penang has not been number one for total investments in Malaysia for 4 years now.

It has lagged further behind other states.

According to MIDA, last year in 2015, Penang was the 5th highest state in new investments at RM6.72 billion and ranked just behind Melaka.

It pales in comparison to Johor which recorded RM31.1 billion or 5 times higher than Penang, and Sarawak at RM11.82 billion.

And in 2014, Penang came in 3rd and drew RM8.16 billion in investments - behind Johor's RM21.18 billion and Sarawak's RM9.64 billion.

Even as Penang's annual state government spending has almost quadrupled, their investments performance has lagged the other states which have surged ahead.

In fact, Johor's combined investment for the two years of 2014 and 2015 totaling RM53 billion is more than the entire combined investments in Penang for the past 6 years of RM42.6 billion.

So far this year, Penang still lags in investments and is 3rd. for the January to March quarter.

Misleading Propaganda 5: The previous BN Penang Govt sold 35 times more land and collected less money compared to DAP

This is one of the most often repeated lies by DAP to justify their continued selling of state land to fund their 4 times increased in yearly state spending. Again this is a lie which you can read about and examine the evidence here in my previous blog post titled "BN sold more land than Pakatan in Penang and collected less' ??

Misleading Propaganda 6: Lim Guan Eng went to jail for defending a Malay girl

Probably the longest repeated allegation despite being corrected dozens of times but DAP don't care and continue repeating this since it sounds nice. In fact, DAP actually apologized in court once for repeating this lie.

You can read more about it and examine the evidence in my previous post titled "Did Lim Guan Eng really go to jail for defending a Malay girl?"

Misleading Propaganda 7: The Bungalow seller Miss Phang made a RM300,000 profit and has no business dealings with the Penang State Govt

This is a new piece of propaganda which is being used to pretend that Lim Guan Eng was falsely charged for corruption. He himself is repeating this in nationwide ceramahs and numerous recent press statements - despite this being subjudice and contempt of court to talk about the case as it is already in the courts which may lead to more court charges against Lim Guan Eng.

This is an outright blatant lie. Examine the evidence, watch the videos and read about this in my previous blog post titled "SSSLGE: Lim Guan Eng Explains Why He Is Not Guilty."

[Updates to come as I expand this blog post to include other much repeated propaganda]

If DAP is unhappy with my blog post above. they can dispute and point out where it is wrong or they are welcome to sue me.

Other propaganda like DAP's famed "40 years of flooding solved within 9 months" or "we can solve floods within one term".is made to look stupid due to ever increasing flooding in Penang in recent years.

Titles such as "UNESCO Heritage City", "Penang Top Ten most Liveable City" and "Penang being a top electronics manufacturing hub known as Silicon island" which DAP keeps claiming credit for are also something not new.

The Heritage City status was granted in June 2008 - just 3 months after DAP took power in March 8, 2008 and is really the result of efforts by the previous GERAKAN Govt over many years.

It takes many years before such a heritage status is approved, which it was (together with Malacca) in 2008, which Dr Koh Tsu Koon rightly claimed credit for.

Penang has also made it into the list of Most Liveable City for more than a decade before DAP took over,, which you can see in articles such as this when Penang was number six most liveable in 2001.

As for Silicon Island, the late Dr Lim Chong Eu and the past BN Government takes the credit as even in the 1990s, Penang was already among the top 3 electronics exporting region in the world. You can read about this in this year 2000 Bloomberg article titled "Penang's Secret".

Lim Guan Eng would also try to claim credit when a new factory is set-up in Penang but will he also take the blame when Nine major foreign factories in Penang shut down and retrench workers “Silicon Valley in the East” in critical situation as is happening now?

Even the Lonely Planet stating Penang is a top tourist destination last year in 2015 was much trumpeted by Lim Guan Eng but he remained strangely silent about Lonely Planet latest 2016 list which had Ipoh at number 6 of top 10 places to visit while Penang had dropped off the list.

But Lim Guan Eng and DAP do deserve some credit too.

For one, Penang has street murals now. And the streets are cleaner (not hard since they sold so many billions of ringgit worth of land and can easily afford the additional RM10 million per year extra to clean the streets).

Also, the local food Char Kuey Teow and Penang Laksa still remains delicious and was recently endorsed as world's best food destination by a renowned food writer.

If DAP or Lim Guan Eng can prove that they invented these then we can similarly praise them for the food too.

Tuesday, 26 July 2016

The RM60 billion (now RM55 billion) rail link bailout that wasn't

(UPDATE 22 Oct 2016: Since revised down to RM55 billion in budget 2017 or RM88.7 million per km)

Today, the Sarawak Report has accused the government of inflating the cost of the East Coast rail project from RM30 billion to RM60 billion in order to "bail-out" Jho Low and 1MDB - complete with dodgy looking documents.

This is what they wrote:

The PM’s ‘cunning plan’ is to get the Malaysian Government to agree to inflate the actual cost of the East Coast Rail Project from only RM30 billion to RM60 billion, all to be borrowed from the Chinese Government, in order to disguise the payment of 1MDB’s (and Jho Low’s) company debts!

The East Coast Rail Link (ECRL) is a long-planned project that was put under the 11th Malaysian plan which will link Kuala Lumpur and three east coast states in Peninsular Malaysia. It is 620km long involve a “significant amount of underground tunnelling”. The East Coast Economic Region Development Council has established that a rail route connecting the major ports, business centres and towns in Pahang, Terengganu and Kelantan was vital to achieve growth in the region.

It is expected to take 15 to 20 years to develop as it will involve a lot of underground work and building tunnels across Banjaran Titiwangsa. It is not a trivial project. Here is the proposed route from SPAD website.

There are multiple problems with Sarawak Report's "expose" though. They are:

1. The project was already projected to cost RM60 billion (not RM30 billion as alleged by Sarawak Report) many years ago.

Here are some links over the years:

18 April 2013 East Coast Rail Line May Cost RM60 Billion
9 October 2013 Rail-related projects to create oasis of opportunities

This project was already discussed heavily in the popular Malaysian forums in LowYat and Skyscraper City in the year 2013 with the RM60 billion cost prominently discussed.

And this RM60 billion estimated cost were as far back as in the year 2013 too - when USD1 = RM3.00 to RM3.30. Now it is more expensive.

Even if it was RM30 billion in 2013, costs  would certainly have risen substantially by now.

Another problem is that this project is a Privately Funded Initiative (PFI) and is to be funded by the private-sector, not by the govt. So, is the private sector expected to go along and bail out 1MDB?

Surprisingly though, Sarawak Report did not similarly do a report on the Penang Govt's Transport plan that was recently confirmed by the state govt that has increased RM19 billion within a year from RM27 billion to RM46 billion.

2. The RM60 billion (now RM55 billion) price tag does not seem to be over-priced

At RM 60 billion, this 620km long project - rail and rolling stock - which cut through peninsular Malaysia's Titiwangsa mountain range will include much hard-rock tunneling and bridges, cost about RM96,7 million per KM.

(UPDATE 22 Oct 2016: Since revised down to RM55 billion in budget 2017 or RM88.7 million per km)

This would be a real bargain compared to the Penang Tunnel project where the Penang Government had signed to pay RM3.5 billion to build a 6.3km undersea tunnel - meaning a cost of RM555 million per KM. 

Tunnelling undersea where the earth is mostly sedimentary based actually cost less than tunnelling hard mountain ranges thus making RM96.7 million a bargain compared to the RM555 million per KM.

In fact, the Penang Govt had even awarded feasibility and detailed design reports for that tunnel and 3 associated roads of about 20.3km long costing RM305 million and already paid for about half of that.

And even more strange is that on top of paying the full cost of the construction of the tunnel, the Penang Govt also signed to allow 30 years toll to be given to the same company awarded and paid to build that tunnel. Probably the weirdest privatized concession agreement in the world.

If there is any project to be investigated for jacking up the cost, then it would be those who approved and signed the Penang Tunnel project - certainly not the ECRL.

Another project that gives us a guide on the pricing is the the Gotthard Base Tunnel which is a railway base tunnel through the Alps in Switzerland. It opened on 1 June 2016 with full service to begin in December 2016. With a route length of 57.09 km, this rail tunnel was completed at a cost of more than USD12 billion (RM48 billion).

Assuming that just 10% of the 620km is going to be tunneling through Banjaran Titiwangsa, or 62km then the RM60 billion price seems reasonable.

And here is another one funded by the Chinese too - the railway line for passengers and cargo transportation between Mombasa, the largest port in East Africa, and Nairobi, the capital city of Kenya.

The 609km-long line began in October 2013 and is scheduled to be completed by December 2017 cost USD13.9 billion (RM56 billion). Not only was work started earlier hence lower construction cost but there is little tunneling work due to the flat African plain lands.

So, do you think RM60 billion for our 620km ECRL spanning 15 to 20 years going thru mountain ranges is inflated?

Also, following from multiple feasibility studies over the years - as the year 2005, SPAD had also issued a market consultation RFI in March this year.

With an open RFI like this, it means that it is very hard to so-called inflate the price by double as alleged by Sarawak Report.

Supporting Sarawak report DAP YB Tony Pua also weighed in and asked "Each kilometre of ECRL to cost RM96.8 million (now RM88.7 million) while Pro Mahathir MP Mahfuz Omar sarcastically asked "Is this the most expensive rail in the world? I don't know, but is it (possible) that the government want to builds a gold rail?"

Mahfuz and Tony Pua also compared the cost with the double-tracking rail projects completed recently by the government. Tony Pua asked "That would mean that the ECRL will cost 120 per cent and 143 per cent more than the northern and southern double-tracking projects respectively,” he claimed.

This is despite the fact that the double-tracking projects runs along pre-existing and established lines and does not involve extensive tunneling or building many new bridges. 

One wonders what kind of mentality these MPs have when they would compare a project that is to upgrade existing lines with one that is entirely new line going through mountain ranges?

However, both Tony Pua and Mahfuz should also ask why projects in Penang cost so much? Even the costs for the feasibility study and design reports for the Penang Tunnel and a 20.2km length highways project cost RM305 million - which the Penang govt says is reasonable.

Perhaps Mahfuz would now say that the Penang projects are going to be made of diamonds instead since they cost more per km?

As proven earlier and also in comparison with those projects in Penang which makes it seem like a real bargain instead, the ECRL costs is inline with similar projects around the world despite the tough task of tunneling through the mountain ranges.

3. The so-called bailout payments by Sarawak Report does not make sense. 

Chief among this is the so-called buyouts of Putrajaya Perdana Berhad (PPB) and Loh and Loh Corp (LLCB) as indicated by Sarawak Report here:

I am not sure what kind of bail-out this would be if the Chinese were expected to buy-out the previously-listed companies LLCB and PPB for the price of 13.5 times and 7.5 times Price-Earnings Ratio (PE Ratio).

Even the listed Gamuda is trading at 18 times PE ratio while Binapuri is trading at 28 times PE ratio.

If this was a bail-out then the price to bail-out two profitable companies with a long track-record is ridiculously cheap and below market value.

The other point that does not make sense is that Sarawak Report also said that the Chinese are supposed to buy out the Air Itam land in Penang for USD850 million (RM3.4 billion).

Another problem is that this Air Itam land is not considered a "missing" asset thus any sales proceeds would go to 1MDB and not to IPIC where assets are alleged to be "missing".

Thus how is money going to 1MDB going to be used to cover "missing" assets in IPIC?

Perhaps Sarawak Report can explain this.


I am sorry, but this Sarawak Report allegation is totally off-base and makes no sense at all.  It does however seem to be an attempt to scuttle a legitimate infrastructure project by China in Malaysia which will provide much needed economic development in the east peninsular Malaysia states.

Why do you want to sabotage Malaysia-China relations and our economic development?

As far as 1MDB is concerned, their focus if on resolving the dispute with IPIC which if resolved, will mean 1MDB has no missing money as described in my previous post.

Works Minister Fadillah Yusof denies the cost was doubled to RM60 billion to pay off 1MDB debts. 
July 27, 2016 PETALING JAYA: Works Minister Fadillah Yusof denied today Sarawak Report’s claim that Putrajaya wants to double the cost of the East Coast Rail Line (ECRL) project from RM30 billion to RM60 billion to pay off 1MDB debts.
“I don’t give a damn about Sarawak Report,” Fadillah told Malay Mail Online.
“It was never discussed in Cabinet.”
The whistleblower site, citing several documents, claimed that the ECRL project would be awarded to the Chinese state-owned company China Communications Construction Company.Sarawak Report claimed that the deal was due to be approved by Cabinet tomorrow at its regular meeting.
The site claimed the deal would allow paying off the debts of companies related to businessman Low Taek Jho (Jho Low).
The East Coast Railway project hopes to develop the East Coast Economic Region.
The 600km rail line will connect Kuala Lumpur with Bentong in Pahang. It will also link Terengganu and Kelantan.

China firm denies 1MDB bailout plot

The China Communications Construction Company (CCCC) has denied involvement in any plot to cover up the alleged multi-billion-dollar corruption scandal at 1MDB by inflating a railway contract. 
The CCCC told The Australian it had “no knowledge of the claims” made in the Sarawak Report about the alleged plot. 
“We will continue to follow those false accusations made by certain media and will take necessary steps to defend our lawful rights,” the CCCC said.