A giant passes away

The former Chief Minister of Penang, Tun Dr Lim Chong Eu, passed away last night. Even though the passing is expected, since a person at his age who had a massive stroke is quite unlikely to recover, I am sure most Penangites will still  feel sad .

There is no doubt that he was the main moving force that has totally transformed Penang from a sleepy entrepot  with practically no industrial base into the Silicon Valley of Malaysia.

I grew up in Penang in the 60s, and that time life was difficult. The economy then depended heavily on being an entrepot, importing commodities and re-exporting them. The trade then was mainly rubber and tin. The only factory of note then was perhaps the Eastern Tin smelting company located along Dato Kramat Road.

On the retail side, businessmen survived on selling tax free goods to visitors from mainland and South Thailand, being a free port at that time. But business was slow after the tax free status was removed.

Dr Lim then was the chief of a small party called United Democratic party, the UDP.  Even though the party was small, it was able to win a few seats in the 1964 elections, and had the support of many opposition-minded Penangites over the then Socialist Front (Bull Head Party, as the local called it then). In 1968, he joined hands with a few academics and some of the leaders from Labour Party ( a component of the Socialist Front) to form a multiracial party called Parti Gerakan rakyat Malaysia, a people’s movement for Malaysia. He in fact brought the whole UDP into Parti Gerakan and the former ceased to exist after the formation of Gerakan.

In Penang, Parti Gerakan depended heavily on the machinery of the dissolved UDP. With only 300 die hard cadres, Gerakan was able to defeat the Alliance Party to form the Penang State Government in 1969.

The joy of victory was however short lived, for a few days after the ’69 election, racial riots broke out in many areas in Malaysia, Penang being one of them. That event came to be known by all Malaysians as May 13, a tragic and black day in Malaysia.

The political landscape in Malaysia  changed after May 13. Racial awareness was heightened. NEP was introduced to provide affirmative actions to certain ethnic group which was far behind economically. It must be said that the economic situation then was very different, and many people at that time did agree to have this affirmative action to help to address the economic inequality. NEP  was later skewed by politicians with their own agenda but that was another story altogether( I have repeated spoken out against this policy in this blog). The intention then was noble, to eradicate poverty irrespective of ethnicity and to restructure society to have a more level playing field for all.

It was in this context that the late Dr Lim brought the whole Gerakan into a new coalition known as BN as a founding partner. I think there were many reasons for this move. One of the reasons was the development of Penang. Without the cooperation between Federal and State, lots of projects could not be implemented , and the grand plan that he has for Penang could not be achieved with the party continuing remaining as an opposition. On top of that, he believed  that racial confrontation could best be avoided by working together rather than against each other.  We must also not forget that he stepped down as party president in 1980, passing the baton to another Dr Lim,  and concentrated instead on the development of Penang.

He did bring development to Penang. Penang was totally transformed and big multinationals began moving in and set up bases. Motorola, Intel , AMD, etc etc you name it, yo see it…. The free trade zones became a model for others to emulate.  His legacies included the Penang Bridge, Komtar (once the tallest building in Asia) and of course a totally changed economic structure based on industries instead of just commerce. If ever there is a politican who could really change the life of people for the better, Tun DR Lim Chong Eu must be counted as one of them.

His passing is. although expected,  still a sad day for all Malaysians especially those who are from Penang.



How politics is played II

I would recommend my readers to read  an  excellent anlysis by RPK, whose Malaysia Today website has done wonders in changing many mindsets .  Many of you, like yours truly, must have read it in MT. But it is still worth a second or third reading. This article by RPK is about Trojan horses and you can read and re-read here.

Are there Trojan horses in PKR, and if there are, who are these ? In politics, the best way for a trojan horse to remain unnoticed is to move first and accuse others of being trojan horses.

I have written a few years ago about ” This is how politics is played“. It is still one of the more popular articles of this blog, and many young members have admitted to me that they have downloaded and kept the article for future reference.  Today, this post on trojan horses may perhaps serve as another lesson of how politics is being played.

I have seen people (committed party members) being labelled as “hak ser wui” (in Cantonese, meaning black society/secret society) when the crime that fellow may have done  was perhaps serving as a personal assistant  to a very rich taiko  3 decades ago.

I have seen a veteran senior leader who is a division chief and was once a state chairman labelling others of taking ang pows, when he himself applied for allocation of 30′ hawkers stalls’ and converted those into cash money for self interest..

The idea is, in politics, when you have ‘dirt’ on yourself, the best way not to let others notice is to make the first move and point fingers at others , who may become  a threat to you, and shout loudly ‘dirt, dirt, dirt’..  Nevermind that the person being accused is cleaner than you or is totally innocent. Nevermind that the person has only taken a few ang pows perhaps worth a few hundred dollars and you have taken tens of thousands of ‘stall-converted’ money .  And always talk about rules and regulations but when the occasion suits you,  you can always bend the same rules under the pretext of ‘ do not rock the boat’. You will become very creditable to the top leadership whom you must ‘bodek’ at all cost, but at the same time be prepared to  be a lallang and sway with the winds, and abandon the same leadership that you may have ‘bodek-ed’ when you sense that his influence is on the decline. All for the sake of ‘not rocking the boat’.

By doing so,  other members will not notice your dirt , but would follow the direction of your  finger pointing at those threats that you labelled as ‘dirt’.  By repeating this accusation repeatedly, you would have succeeded  in tarnishing the reputation of those who were in your bad book, and at the same time, because you talk so ‘saintly’, you would have created an image of being so righteous that you become untouchable. This is true story that i have seen with my eyes and this is how eunuch politics is being played.

So coming back to this post, the best way for a ‘thief’ not to be noticed by others would be to point at your enemy/potential enemy first and label him, loudly and clearly, “THIEF”. In that way, attention would be shifted and the real thief would become  ‘hero’ and the ‘hero’ would become thief.

This is how politics is played, how black can become white and white black—and I am talking from my personal observation..

From plastic bags to intelligent energy usage

I fully support the reduced plastic bag usage policy, even though it does cause some inconvenience to shoppers.  I think we should not let our convenience affect future generations and we need to start protecting our environment as much as we can.

When I was small, we hardly had any plastic bags. Whatever rubbish or even grocery was wrapped in newspapers. If people could survive then,and survived we have,  there is no reason why we cannot do away with using lesser plastic.

In the States, which is the biggest energy user, the use of paper bag is widespread.

Paper can be easily recycled. Not all plastic can. That is reason enough for us to use less plastic.

Speaking about energy conservation, perhaps energy producers should introduce a different way of charging energy usage. During peak hours, charge higher and during non peak hours, the rate should be cheaper, just like telecommunication companies.

Many people in the west, including the author of the World is Flat Thomas Frieldman, are advocating a better system of producing and charging the users. As it is, power producers have to produce more than what is necessary during peak hours just to cater for a reserve margin, and this reserve energyy is wasted.

If there is a more intelligent way of detecting the peak demand and thus producing just enough ( or just slightly more) so that there is always enough energy but at the same time not too excessive so that wastage is reduced, then there should be much lesser usage of energy and this will at least give the world a breathing space.

To the consumers, if energy rate is charged according to peak or off peak, then we can reduce our usage during peak hours (like day time when most offices turn on their air conditioning, and most factories functioning at top capacities), and turn on our washing machines, kettles, irons and so on during off peak ours. All these can actually be done by computer micro chip technology, and intelligent energy production and usage will probably be the next innovation that can keep economic growth progressing.

We really need to think out of the box now since energy sources like coal, petroleum and natural gas are depletable substances.

Black crows

Clinic computer is down  and fortunately all files are backed-up. Needs to send for repair, and thus may not be able to post next few days.

Anyway, there is nothing to write about nowadays, since Malaysian politics is now so murky both sides of the divides. It is really a Hobson’s choice, a choice between the devil and the deep blue sea which is also full of devil inside.

With Zaid Ibrahim gone from PKR amidst allegations that there were irregularities in PKR’s ongoing elections, many people are feeling so fed up that PR really needs to buck up.. Ask anyone now on the street the answer is the same.. All the crows are of the same colour. The rare white crow has no place at all among the black..

The support given to PR in 308 was more because of the disgust towards the Big Brother. But once that support is given, it must show that it can live up to the voters’ expectations and the next round, it has to earn it on its own merits. With its own people shooting at its own feet, this support will slowly but surely be eroded. Until something is done to overhaul its own backyard, the 2 party system that many dream about may not materialise the next round. And if it wins less than one third the next election, gerrymandering will make it even harder for the much awaited 2 party system to be realised.


PKR was the first to let its members, rather than delegates, to choose its leaders. SO it positions itself as a more democratic party than all others, which is of course good if only the de facto leader himself is chosen by the members too. Ironically, this was not done, and as de facto leader who yields tremendous power over other elected leaders, this is something like what is in Iran. The parliament chosen by the people is not the highest authority but rather the Council of the Guardians and the Supreme leader who is chosen by the council consisting of the clerics. The Supreme leader is higher than the president but he,like an emperor, needs not face the electorates. What kind of system is this?

It is like a Prime Minister chosen by the people who has no power but has to refer all decision to a higher leader who is not elected. SO is this still democratic?

While on the one hand, PKR wants to practice grassroot democracy, on the other hand, its supreme leader does not need be chosen by popular votes ( even though he can win any contest hands down).

I find that this is contradictory, and i cannot understand why is this so. Perhaps some one out there can enlighten me on this?

Glittering gold

The question many investors are asking, will gold price move up further?  I have not written about economic issues for a long time, but i think the probability of gold moving up higher is quite high, as long as US dollar is trending low.

Many economists have voiced out against the present floating system of exchange rate and many have also advocated going back to the gold standard.

I will post an excellent article from the Forbes magazine here about this.

Time To Reform The International Monetary System

Charles W Kadlec

Restoring gold’s role in currency markets should be at the top of the G-20’s agenda.

A funny thing happened on the way to the G-20 meeting in Seoul, South Korea, this week: The world’s growing dissatisfaction with U.S. policy toward the dollar has derailed the Obama administration’s proposal to elevate trade balances as the reference point for currency values. Instead of asserting America’s traditional leadership role, President Barack Obama is confronting calls to replace the U.S.–and the dollar–as the center of the international monetary system.

The no-confidence vote led by China, Japan and Germany and supported by Brazil is the direct consequence of the Obama administration’s embrace of a Nixonian, weak-dollar policy as it struggles to resuscitate the U.S. economy. Blaming the Chinese renminbi-dollar exchange rate for high U.S. unemployment is eerily similar to the claims made by President Richard Nixon when, in 1971, he promised that suspending dollar/gold convertibility and an 8.5% devaluation of the dollar would make American labor more competitive.

Like President Nixon, Treasury Secretary Timothy Geithner claims that the U.S. supports a strong dollar. But just as in the early 1970s, the U.S. is unabashedly following an easy-money policy at home while letting the dollar fall on international currency markets.

With the world’s monetary system tethered to the dollar, this mix of U.S. policies led to the great, global inflation of the 1970s. No wonder the scramble is on to find a permanent replacement for the dollar.

The surprising answer may turn out to be a gold standard designed to reflect the realities of a 21st-century global economy.

World Bank President Robert Zoellick, writing in last Sunday’s Financial Times, broke a sound barrier among the leadership of the Group of Eight industrial countries with regards to restoring gold to a central role in a new, international monetary system. Such a system, he wrote, “is likely to need to involve the dollar, the euro, the yen, the pound and the renminbi. … The system should also consider employing gold as an international reference point of market expectations about inflation, deflation and future currency values. Although textbooks may view gold as the old money, markets are using gold as an alternative monetary asset today.”

Zoellick’s proposal should be considered for several reasons.

First, the leading alternatives to gold would represent a grand new experiment in operating the international monetary system, introducing yet more uncertainty into a developed world struggling to recover from financial crisis, and a developing world attempting to cope with an unstable dollar and hot money flows.

No single currency has the credibility or liquidity to displace the dollar. The sovereign debt crisis among E.U. countries limits the euro’s role, while lack of infrastructure and liquidity–and political risks–rule out the renminbi. And the central banks of Britain and Japan have not shown themselves to be particularly skillful in providing a stable currency within their own economies.

A basket of currencies, codified in an elevated role for the IMF’s Special Drawing Rights as an international medium of exchange, would face an extraordinary number of technical and pragmatic obstacles. Who would be empowered to decide the appropriate quantity of SDRs in the world? What agency would conduct the equivalent of open market operations? Empowering a new panel of men and women to manage the world’s currency system would raise more questions than it would answer, potentially triggering yet another currency crisis.

Patching up the current system of floating exchange rates will not provide a solution. Floating exchange rates have simply failed to fulfill their promise of addressing global trade imbalances. For example, since 1967 the dollar has been devalued by 72% against the euro and 75% against the yen. Yet net exports have gone from a modest surplus in 1967 to a $390 billion deficit–equivalent to 2.7% of GDP–in 2009. Given this history, the claim that greater currency flexibility can be used to reduce trade imbalances, or that if the Chinese would allow the dollar to fall by 20% or 40% against the renminbi the U.S. economy would be stronger and the unemployment rate lower, is simply not credible.

Finally, the longer the floating exchange rate system has been around, the more frequent and more intense the international crises. The 1970s were marked by oil shocks of 1973 and 1979, the 1980s by the Latin American debt crisis and the stock market crash of 1987, the 1990s by the Mexican peso crisis and the Asian currency crisis, and now the 2008 international financial crisis, the European sovereign debt crisis and the threat of a currency war.

During the Bretton Woods era of the 1950s and 1960s, the dollar was a reliable means of exchange. It delivered stable prices, facilitated the post World War II economic “miracles” of Western Europe and Japan, and helped a 20-year period of 4% growth in the U.S. The different results between that era, in which the dollar was linked to gold, and the growing uncertainty and instability of the past 40 years, show it was gold, not the dollar, that provided the vital ingredient for a growing world economy, price stability and modest trade imbalances. Restoring gold’s role as the key reference point therefore should be at the top of the G-20’s agenda for reforming the international monetary system.

Suu Kyi to be released soon?

I have written 2 articles on Myanmar or Burma as was formerly known. One, The Burmese way to Facism, was written in 2007, and the other, Help the Burmese, was written in 2008.

The first article was reposted in some o f the Burmese blog’s and i have received emails from Burmese thanking me for highlighting their problems.

In Myanmar, the army is the BIg Brother. They control everything, from freedom (or rather making sure that there is none) of speech, businesses and even food. Those in the army were well rewarded with luxuries and money, like some of the warlords here.

In many African countries , the same thing happens. BUt Myanmar people they are luckier because they have a freedom fighter in Aung San Suu Kyi. Any lesser person would have crumpled under the continued harrassment of the military junta and she has been detained under house arrest for more than 15 years in the last 2 decades. Just imagine, if we are sick and stay at home for a week, we would feel so bored and would have gone out at the slightest excuse. Imagine a person who was kept in the same house on and off for 2 decades. Most people would have given up their own ideals long ago and would be properly rewarded with riches and land and so on.

SHe fully deserves her NObel prize, and she is one person who, despite her small and thin physique, is actually larger than most of us..

There is now news that she would be released soon.

I hope this is true, and I hope that with her release, she would continue her journey and succeed in bringing freedom to her people one day.

children  begging for food

A tale of two nations

Posting an artilce from Bloomberg news Nov. 11 2010. The gap is in fact widening between these 2 brother nations .

Bloomberg News
Nov 11, 2010

Singapore Seen Overtaking Malaysia 45 Years After Lee’s Tears
By Shamim Adam

Forty-five years after Singapore’s expulsion from a union with
Malaysia left Lee Kuan Yew in tears on national television, the
economy of the city-state he led to independence is poised to overtake
its neighbor.

Singapore’s gross domestic product will cap its fastest annual growth
this year since independence, rising as much as 15 percent to about
$210 billion, while the economy of Malaysia, a country 478 times its
size, will expand 7 percent to $205 billion, government forecasts
show. The nations are scheduled to release their 2010 data by

The island that former economic adviser Albert Winsemius once said was
considered a “poor little market in a dark corner of Asia” is now
ranked by the World Bank as the easiest place to do business, has the
world’s second-busiest container port, and boasts the highest
proportion of millionaire households, according to the Boston
Consulting Group.

“Singapore kept on moving to the next level as the world economy
evolved and adjusted to market demands and investors’ interests,” said
Lee Hock Guan, senior fellow at the Singapore- based Institute of
Southeast Asian Studies. “Malaysia was struck by the curse of
resource-rich countries: It didn’t optimize its human capital.”

From a low-cost manufacturing center for companies such as Texas
Instruments Inc. in the 1960s, Singapore has become the world’s
fourth-largest foreign-exchange center with a S$1.2 trillion ($932
billion) asset-management industry.

Rising Wealth

Smaller than New York City and the only Southeast Asian nation without
natural resources, Singapore has grown 189-fold since independence in
1965, helping boost GDP per capita to $36,537 last year from $512.
Malaysia’s economy expanded at one- third the pace during the same
period and had a GDP per capita of $6,975 in 2009, up from $335 in

Malaysia’s growth fell to an average 4.7 percent a year in the past
decade, from 7.2 percent in the 1990s, when former prime minister
Mahathir Mohamad wooed overseas manufacturers, built highways and
erected the world’s tallest twin towers.

“Development is like a marathon and all policies geared toward it must
be sustainable and continuous,” said Thomas Lam, chief economist at
OSK-DMG, a venture between Malaysian securities firm OSK Holdings Bhd.
and Deutsche Bank AG. “Malaysia runs the marathon like a 100 meter
event, so you see the initial spurt but not continuous progress in the

Lam, 35, is one of 386,000 Malaysians who have become permanent
residents or citizens of Singapore, a list that includes Health
Minister Khaw Boon Wan and Oversea-Chinese Banking Corp. Chairman
Cheong Choong Kong.

‘Greater’ Opportunity

“Singapore seems to offer greater career opportunity and mobility in
my field,” said Lam, the second-most-accurate U.S. economic forecaster
for 2008 to 2009 in Bloomberg surveys.

After more than 140 years under British rule, Singapore joined the
Federation of Malaysia in September 1963 as Lee and his colleagues
sought a bigger common market to cut unemployment and curb communism.
The merger survived less than two years amid ideological differences
and worsening relations between the United Malays National
Organisation, which dominated the ruling Barisan Nasional coalition,
and Lee’s People’s Action Party.

“For me, it is a moment of anguish,” Lee said on Aug. 9, 1965, the day
Singapore became a sovereign state. “My whole adult life, I believed
in Malaysian merger and unity of the two territories.” Lee, 87, was
Singapore’s prime minister from 1959 to 1990.

‘Loss of Time’

Winsemius, the country’s economic adviser from 1961 to 1984, said he
thought the merger was a “loss of time.” Credited with helping
formulate Singapore’s industrial strategy, Winsemius, who died in
1996, said the general opinion of Singapore in the early 1960s was a
country “going down the drain.”

The government acted by investing in export-based industries. It built
new container terminals for Singapore’s port, the genesis of the
country’s development; reclaimed land offshore to attract companies
such as Exxon Mobil Corp. and Royal Dutch/Shell Group for a S$30
billion oil refining complex; and moved into high-tech industries like
electronics and drugs.

“Economic development does not occur naturally,” said Ravi Menon, a
senior official at Singapore’s Ministry of Trade and Industry. “This
is where free marketers are disenchanted with Singapore. The
government has never hesitated from guiding the development process or
intervening in markets where it believes such intervention will lead
to superior outcomes.”

Biomedical Research

The government invested about S$500 million in its Biopolis biomedical
research hub after attracting drugmakers including Pfizer Inc. and
Novartis AG. It cut corporate tax rates by nine percentage points
since 2000 to 17 percent, compared with 25 percent in Malaysia.

BNP Paribas has a “buy” recommendation on Keppel Corp. and SembCorp
Marine Ltd., the world’s biggest builders of oil rigs and two of the
companies the government backed to propagate its industrial policy.
Singapore Technologies Engineering Ltd., Asia’s biggest
aircraft-maintenance company, was rated a “buy” by Deutsche Bank AG.

Singapore was kicked out of the union partly because Lee opposed
Malaysia’s affirmative-action policy, which provides special rights to
the ethnic Malay majority. While Malaysian Prime Minister Najib Razak
has pledged to roll back key policies of ethnic favoritism, he told
UMNO’s 61st General Assembly last month that the “social contract”
that gives benefits to the Malays cannot be repealed.

Najib’s Plan

“Singapore will overtake Malaysia because its focus is just on
economic growth,” Mahathir, Malaysia’s prime minister from 1981 to
2003, said in an e-mailed response to questions. “There is no social
restructuring goal such as fair distribution of wealth between races
as we have in Malaysia.”

Najib is trying to return the Malaysian economy to the levels of
growth that boosted stock prices almost fivefold in the decade through
1996. He set a goal of tripling gross national income to 1.7 trillion
ringgit ($550 billion) in 2020, from 600 billion ringgit in 2009 and
creating 3.3 million jobs.

His government unveiled an economic transformation program in
September aimed at attracting investment, including $444 billion of
programs this decade ranging from mass rail to nuclear power, led by
private and government-linked companies. Najib is also taking steps to
bolster the talent base, including plans for a teaching hospital with
courses by Baltimore-based Johns Hopkins University and a new
corporation tasked with luring back skilled Malaysians from overseas.

About 350,000 to 400,000 Malaysian citizens work in Singapore,
including 150,000 who commute daily via buses and motorcycles to jobs
in the city-state’s factories, kitchens and offices.

Export Model

“Singapore followed the export-led industrialization model to become a
base for foreign manufacturers,” said Lee of the Institute of
Southeast Asian Studies. “The main model for Malaysia for a number of
years was import-substitution where it protected certain industries.
That created inertia.”

Lee, a 52-year-old Malaysian who studied and lived overseas for more
than 30 years, said he plans to return to live in Malaysia only when
he retires.

Singapore beat 182 economies to take first place in the World Bank’s
annual ranking of business conditions, which looks at property rights,
taxes, access to credit, labor laws and regulations on customs and
licenses. Malaysia climbed two steps to 21st, according to the Nov. 4

Mercer Consulting ranked Singapore as Asia’s most livable city in May,
even as it lags behind Hong Kong on measurements of personal freedom
and media censorship. The government says restrictions on public
assembly and speeches are necessary to maintain social and religious
harmony among its 5 million people. The city was wracked by violence
between ethnic Malays and Chinese in the 1960s.

The country must keep innovating to stay ahead, said Tomo Kinoshita,
deputy head of Asia economics research at Nomura Holdings Inc. in Hong

“Singapore must keep searching for new markets,” Kinoshita said. “Less
developed Asian countries are all growing quickly and trying to catch

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