Najib: My Testimony for 2009

I append a posting from Premier Najib. In his blog, he penned his thoughts on the past 12 months, 9 of which he held the helm of the nation.[My comments are in parantheses.]

On his blog (www.1malaysia.com.my), Najib posted a year-in-review piece yesterday (28 December 2009) that reflects on the hurdles the country has faced and overcome, while sounding upbeat about prospects for 2010.

“At the start of 2009, I forecast a year full of challenges for us all, which would require the collective efforts of all Malaysians to overcome,’ says Najib, who became Malaysia’s sixth prime minister in April.

On the “1 Malaysia — People First, Performance Now” concept he introduced, Najib says he is “happy” that Malaysians have responded to his efforts to explain the value of 1 Malaysia.[The purity of the essence may be there but the tangible picture is still blur.]

The concept was set up to strengthen relationships and cooperation among the multi-racial community and calls on people to contribute towards the peace, stability and development of the nation.[ Sounds very much like the early Merdeka years.]

“More significantly, as my work took me around the country, I witnessed many occasions that proved the 1 Malaysia concept is a long-standing practice, from the communities in Sarawak, to the people of Sabah,” Najib says. “These moments give me great comfort that we are on the right path towards greater unity and prosperity.” [ You may be right here but your followers all have different understanding just like the 6 Blind Man and the elephant.]

On the economy, he says the government “braced ourselves” for the impact of the global economic downturn at the start of the year. This led Najib to turn to the Internet to seek suggestions from Malaysians on a stimulus package that was eventually tabled in March.[Very wise of you. After all they are your collective brainpower!]

“In an effort to liberalise the economy and shift to a better national economic model, I announced some reforms in June, which included the deregulation of Foreign Investment Committee guidelines,” he says. “The new national budget occupied much of my attention in October. Again, I invited you to share Budget 2010 ideas. In response, I received more than 400 comments and emails.” [Another new dialogue has been put in place.]

The prime minister’s first year in office coincided with the 35th anniversary of Malaysia-China relations, the highlight of which was his inaugural visit to China as prime minister, retracing his father’s steps.[The nostalgia must be heart-moving!]

Najib traveled to France in October, and came to Singapore for the Asia-Pacific Economic Cooperation Summit in November. He also visited the US, Trinidad and Tobago, Thailand and Denmark.

Last month, Najib launched a Facebook fan page that has drawn such a great response that “the popularity of the page took me by surprise”.

“I was sufficiently motivated to produce a series of special Facebook messages, including a video address on the issue of climate change in December,” he says. “I look forward to meeting my Internet friends and fans in programmes scheduled for next year.

“The year has certainly brought its share of rewards and challenges, but I look forward to 2010, so we can continue to chart our path together towards realising the 1 Malaysia concept in spirit and in practice. I hope you continue to join me in this effort.”

My Take:

He has as yet to list down the top 5 problems besetting the Malaysian community from religion to corruption to the affirmative policy concerns. His KPRAs are great but now we want to see action and not mere slogans which we have seen and heard for the last 51 years.

Can 2010 be a year of corrective policy actions for the people?

MIER: 2010-A Year of Bitter Reckoning?

Crystal-balling and scenario building, here comes MIER again with its tales of fortune and tales of woe for 2010.

Dr Mohamed Ariff Abdul Kareem who will be saying his last good-byes to MIER expected Malaysia to face tougher and more challenging times following concerns that the United States may be heading for a double-dip [W-shaped] recession.According to him, all anecdotal evidence clearly showed that Malaysia was out of recession.[Which is good!]

The country would register positive growth in the fourth quarter of this year [2009],and this would probably continue into 2010, he said.

“Initially, we thought it’ll be something like minus three to minus four per cent growth for this year.

“Now, looking at the numbers of the third quarter and the subsequent monthly data, we think the growth for this year will be in the region of minus two to minus three per cent,” he said.

For 2010, he anticipated the growth to be closer to four per cent. However, he said, 2010 would be a challenging year. Although the global economy was moving out of the recession, it was not completely out of the woods, he added.

“There are worries that the growth momentum that we are seeing now — not only in Malaysia but everywhere else — is somewhat fragile because the growth that we are seeing in the United States and Europe and some other countries are very much driven by fiscal stimulus packages,” Mohamed Ariff said.

He said that to keep the momentum going, these countries would probably need another dosage of fiscal stimulus.

“But the question is, can these countries afford to have another round of fiscal stimulus?”

“Many also think that that may not work in the first place. There are concerns of that sort that suggest there may be double dip in the United States in the first half of next year,” he said.

If that were to happen, he said, obviously there would be a lot of knock-on effects on other countries which United States has a good trade and economic connection.

Other concerns, he said, were the possibility of asset bubbles especially in China and many countries in East Asia and rising inflation.

“These asset bubbles may really cause problem if they were to breed sometime this year,” he said. He said that another worrisome factor was that all these countries had been printing money this year to finance part of their deficits.

“This extra money printed actually has not translated into higher prices because of repressed demand conditions. But once economy starts to recover, demand will begin to recover, there is a strong possibility of inflation re-emerging.

“If inflation were to rise, countries like Australia and Europe which are very sensitive to inflation numbers, may jack up interest rates. And if they jack up interest rates, then I think it will scuttle the growth process,” he said. Mohamed Ariff said Malaysia would probably not raise interest rates even if Europe would do so and Australia had already done it.

“The recovery that we see in Malaysia is very fragile. You are talking about four per cent growth only and this is way below Malaysia’s potential growth of 5.5 per cent

“So, the economy cannot afford to have a high interest rate regime at this point in time,” he said. Malaysia had to keep its interest rates relatively low to stimulate both consumption and investment, he added.

He said the country’s growth might reach its peak early and decelerate thereafter should the United States run into a double dip contraction in the first half of 2010, in which case Malaysia would have to put in some kind of stimulus package.

“There are already indications of the volatility,” he said, adding that Japan had shown some kind of deceleration after a positive growth in the third quarter.

Mohamed Ariff said Malaysia might need another RM8 billion to support what it had done before but introducing another stimulus would increase the government’s budget deficit since revenue was falling.

“In a way, this is a difficult time. I don’t think now is a cause for celebration. We are out of recession but we are going to be stuck in a slow, sluggish growth for at least two more years.

“We don’t really actually see the full growth trajectory until the year 2012. Until then, we will have to struggle or wrestle with this sluggish growth,” he lamented

Will he be right or will he be wrong?

That would be the 64,000 ringgit question to be answered in 2010.And Dr. Ariff may not be there to answer it!

AS1M-Flogging a Dead Horse

When something fails, there will be many theories flying around trying to put the finger on the causes and factors for it. And so today in the Malaysian Insider online newspaper, we have a take from Lee Wei Lian. The notations within parentheses are mine.]

"The undersubscription of the RM10 billion government-backed Amanah Saham 1Malaysia unit trust fund is likely due to the sheer volume of units available and wariness among some investors, according to analysts.

Only about a third of the fund has been subscribed so far and Permodalan Nasional Bhd (PNB), which manages the fund, has said that it will extend the subscription deadline for a third time since its launch in July.

This is in sharp contrast to PNB’s earlier funds such as Amanah Saham Malaysia and Amanah Saham Wawasan 2020, whose new units sold out quickly this year due to their track record of providing between six and eight per cent in returns.

Amanah Saham 1 Malaysia (AS1M) is PNB’s largest ever fund offering and getting the investing public to absorb all ten billion units would be more difficult than earlier funds, said market analysts canvassed by The Malaysian Insider.

Amanah Saham Malaysia, for example, was launched in 2000 with fewer than two billion units.

Investments in AS1M are also not capital guaranteed which affects its appeal.

Added to this is a perception among many investors that the size of the RM10 billion fund and its launch in the middle of the economic slowdown meant that the government is facing financial difficulties.

An analyst said that other investors might have held back as they were wary over what investments would be made with the AS1M fund because the information would only be disclosed in the annual report.

According to a recent news report, 85 per cent of the Chinese quota and 21 per cent of the Indian quota has been taken up.[This is good! What about the bumi portion?]

As 30 per cent of AS1M is set aside for Chinese investors and 15 per cent for Indian investors, and with only about 3 billion of the 10 billion available units taken up, this means an overwhelming portion of the unsubscribed units are those reserved for bumiputeras.

The low take up among bumiputeras could be due to a lack of familiarity with AS1M as it has to compete with other established PNB funds for attention.

One Malay investor in previous PNB funds such as Amanah Saham Bumiputera (ASB) and Amanah Saham Didik told The Malaysian Insider that there is some sceptism over AS1M.

“Funds such as ASB have been around a long time and people know what to expect,” she said. “People have other options. AS1M will have to differentiate itself.”

PNB has said it will have road shows nationwide to promote the AS1M starting with Perak and Sarawak in January followed by Sabah, Terengganu, Pahang and Melaka.

My Take:

The fund was way too large.

There was subscriber fatigue as the earlier Malaysian Bond and sukuk funds have taken out most of the available liquidity.

Also there was so much confusion on many issues. AS1M was perceived to be an inferior fund. There was that issue of costs which must be shouldered by unit-holders if they should sell off their units. PNB has been slow to allay all these fears.

Compared to the Malaysian Bond and sukuk funds,managed by Bank Negara, which guarantee a return of 5% whereby interest/dividend is paid quarterly, AS1M benchmarks itself to a miserly 3.75% rate of Malaysian Treasury Bond which was hardly appetizing enough to lure investors.

In parting, AS1M is a mockery to PM Najib's 1Malaysia concept. PNB should have thought through about the possible downside as perceived by the Malaysian citizens before convincing the PM to launch it. As usual, there is something wrong in PNB. What can you say about PNB after this failure. Will heads roll?

No, not in Bolehland Malaysia!

Malaysia: The Hotline that is Not On 24/7!

Ring yourself silly trying to get on the hotline to the Commercial Vehicles Licencing Board (CLVB)when you want to make a complaint against an errant taximan or a bus-driver. It will be akin to waiting for Godot! As usual these civil servants of today do not understand what is the concept of a 'hot-line'. To them it is just a recording and anything urgent cannot be urgent and can be resolved on the next working day!

Calls made to the Commercial Vehicles Licensing Board (CVLB) hotline at 1-800-88-9600 will be answered only during working hours between 9am and 5pm on weekdays.According the its Director,"Complaints made after office hours, on weekends and public holidays would be recorded and investigated on the next working day".

Do we need a 're-education programme" for civil servants in Malaysia? Looks like we do!