Japan: The JAL Bailout

You could never imagine it happening. First JAL went under a heap of debts. Then the Japanese government bailed it out. When the world condemned Malaysia for bailing out some of its failed enterprises, there was uproar in the world. Look how times have changed. Today, even the West is doing that from Washington DC to London.

So what's new? Japan is just another player playing the same game.

So, the news has it today (6 December 2009) that the Japanese government plans to guarantee about 700 billion yen (RM27.3 billion) in loans and other funds provided by financial institutions to keep Japan Airlines afloat.

The plan will be funded through an extra budget for the current fiscal year to next March, which is expected to be compiled this week, Nikkei said today without citing sources.

The plan is aimed at keeping JAL from having to suspend scheduled flights due to a shortage of operating funds, Nikkei said.

Debt-laden JAL has warned it faces bankruptcy unless it undergoes a major restructuring to cut costs, and is seeking a capital injection from a state-backed fund on top of any capital from American Airlines or Delta Air Lines.

Nikkei said the loan-guarantee scheme will cover possible investments from financial institutions in the airline, and the support measure will enable them to provide necessary funding for JAL on short notice.

Standard & Poor's cut JAL's corporate credit rating to a "selective default" on Wednesday, citing a pact with creditors to freeze some loan payments under a mediated debt restructuring called Alternative Dispute Resolution.

The suspension of those debt payments has been agreed to by JAL's major creditors, giving it some breathing room while the state-backed Enterprise Initiative Turnaround Corp deliberates on whether to inject it with public funds.

The ETIC is expected to make a decision in January.

So if the world's second largest economy has to play the bailout game, is this becoming a global norm to salvage failed and inefficient enterprises? You tell me!

Amnesty: The Way Out

The Malaysian Trades Union Congress (MTUC) call to the government to declare an amnesty to allow the estimated 2.1 million illegal foreign workers to leave the country is a worthy suggestion that the government should seriously consider. I thinks the amnesty proposal has all plus points, given the current economic and crime situation and local unemployment.

The last amnesty provided to Indonesian workers was from July 1, 2004 to February 2005. It was very successful and some 230,000 such workers left the country voluntarily.

MTUC had received hundreds of requests from these workers, especially those whose visas had expired, that they wanted to return to their country of origin. However, the cost of getting the documentation was rather high and the workers could not afford it.

A spokesman of MTUC said it cost the workers a total of RM2,000 to get the papers to go back, and it included a fine of RM300 for overstaying, RM600 for airfare and RM1,100 for processing the application through specified agents.

Under an amnesty the workers need not pay anything as the cost of repatriation would be borne by their country.

He added an amnesty would benefit the country as it would provide employment opportunities for the locals, reduce the number of detention camps, redeploy enforcement officers, lower the risk of the spread of communicable diseases and assist foreign workers from being exploited by local errant employers.

Besides these, Malaysia would also be able to earn the goodwill of workers organizations both at home and in the workers' country of origin, he added.

Point Taken. Touche!

Like a siren, Hong Kong Beguiles!

This was written by an anonymous person. I think it makes sense why Hong Kong continues to attract the expatriates and not Malaysia. According to thsi unknown writer, these are the things you need to grow the expatriate.


1. Watch “The World of Suzie Wong” [ Tongue-in-cheek!]

2. Speak no Cantonese. If you do, use it sparingly. Remember, English is king (Tell that to a South-east Asian country!]

3. Avoid public transport

4. Avoid wet markets

5. Avoid cramped, noisy local eateries

Follow these steps closely, add plenty of sunshine and water and watch your expatriate population thrive.

Hong Kong is listed as the fifth most expensive Asian city to live in yet the fragrant harbour still attracts expatriates to its shores.

Hong Kong’s currency peg to the weakening US dollar means that the cost of living has decreased slightly, human resources company ECA International said in its cost of living report.

I can’t tell though. I hear that my regular bowl of fishcake hor fun still costs HK$18![What do you expect?Cooked food prices do not follow the law of gravity.Same here in Malaysia]

So expensive noodles aside, what is it that draws people from faraway lands to seek fortunes in Hong Kong?

Could it be the five-star lifestyle? The salary of a teacher in one of the many international schools here affords rent of a cosy apartment, a helper and a long summer holiday to start with.[In Malaysia-no way, Jose!]

With the cosy apartment comes a deck chair to work up a healthy tan by the pool overlooking the South China Sea. Taxi rides. Dinner at nice restaurants. The list goes on.

There’s more. Welcoming the expatriate is a support system so encompassing that it makes you never want to leave. Or have the need to learn a word of Cantonese.

There are a host of companies, retailers, magazines and websites ready to make the newcomer feel right at home.

I just came across a taxi guide that simplifies what can be the most exasperating exchange: telling the taxi driver where you want to go in Cantonese.

A case in point: Ventris Road translates to Vun Day Lo. I would never have ventured a guess like that.

This book, and many more, are targeted at expats provides names of shopping malls, restaurants, schools and the like in English and Chinese with phonetics.[What a guide! Take note, Malaysian Tourism Council!]

There are websites like www.asiaexpat.com where one can go to buy and sell second-hand items ranging from a luxury yacht (yes!) to children’s toys.[Walla!]

New posts go up every hour of the day and popular items like furniture tend to go within hours alluding to the frequent comings and goings of the expatriates.

There are even property agencies and pet relocation companies that exist solely to serve the expatriate community.

International schools cater to the various foreign communities: American, Australian, Canadian, French, German, Korean, Norwegian and Singaporean.[Mana Malaysians?]

Perhaps aware that companies with deep pockets offer top level employees education allowances, some institutions require a debenture for a student’s enrollment (a certain kindergarten stipulates a HK$70,000 debenture).

There are also a growing number of supermarkets that target the well-traveled with imported goods far outnumbering local produce. Staff speak fluent English and are polite and helpful.[In Malaysia,wait for another generation as the education system currently behaves like a dog chasing its tail!]

One needn’t have to trouble one’s self with the local lingo or struggle with unfamiliar fish and vegetable at the wet market. You want rendang sauce? Chorizo? You got it.

Ironically, one of the great joys of living abroad is immersing in the local culture. Yet all this pampering is taking away the essence of the experience.

Last year’s vicious retrenchments saw an exodus of expats — yet not all have left for good.

A report in the Sunday Morning Post (“A Silver Lining in the Credit Crunch”; March 22, 2009) revealed that major relocation companies had seen a dramatic rise in calls and orders for storage facilities compared to calls and orders to ship belongings home.[Early reversal in the works!]

It seems the whiff of money is still strong for there are families who have simply moved on to cheaper locations like the Philippines for extended holidays while riding out the wave.

No matter what the economic climate, Hong Kong is still a magnet for those seeking greener pastures.

And something tells me that the evergreen Suzie Wong has had a hand in winning over more than one expatriate-to-be.

So, it's over to you, Minister of Tourism Malaysia? Apa boleh bikin?

GST-Adding Salt to the Wound

Mr Lau Beng from Subang Jaya wrote in the online STAR today (5 Dec 2009) that the potential GST will spell more financial worries for the average wage earner.

In his letter,"Taxing time for Malaysians" he gives his views. I append in full his letter on the subject.

'A 4% GST is still too much for many Malaysians in view of the small monthly salary we get for doing the same work compared to people working in Singapore.

Workers in Singapore are paid five times or more. Though they pay 7% GST, it’s negligible to them because they get paid “fat” salaries.

With costs of living escalating over the years, Malaysians are feeling the pinch harder and harder and, besides, getting only a 5%-10% annual salary increment is too little and insignificant. Thus it is difficult to accept any more new taxes like the GST.

That means the rakyat has to tighten their belt further when the 4% GST comes into effect, because unlike the existing 5% Government Service Tax which applies only to certain establishments whose yearly income exceeds RM2mil, we will soon have to pay a tax for everything we use, eat and drink.

When you buy an electrical item with your credit card, some merchants will bill you an extra 2% to cover the bank charges.

So the total amount for the item with 4% GST will come up to 106%. A 6% charge is a lot to pay for a high-end item. This is not good for business as it will drive away the less affluent customers.

Apparently that is why there are so many small restaurants mushrooming in recent years in major townships – to avoid having to pay the 10% service charge and 5% government tax as well as for tipping waiters.

We still have a long way to go to reach developed nation status, so why not exempt foodstuff, medical fees/charges and public transport from such taxes for now? Exemptions should also be given for school books, education materials, computers, reading glasses, equipment for handicapped and invalid people, and essential medicines.

These goods and services are needed by ordinary folks who usually cannot afford to pay for them with their small incomes. With the 4% GST, these items will be beyond their reach.

Of course the Government should also do something concrete to help Malaysians get higher pay. Start with keeping abreast of employees in Singapore before we jump on the bandwagon of developed nations.

For now there is no rationale for a 4% GST across the board, because the poorer Malaysians will become even poorer and find it more difficult to make ends meet.

We also need to know specifically where the new revenue is going to. Simply put, the majority of the rakyat is not ready to shoulder the 4% GST.

LAU BING,
Subang Jaya.'

I couldn't agree with him more.