Sime Darby Properties are Expensive Hot Cakes!

I have just come back from the Sime Darby Third Annual General Meeting. No, it is not wrong. It is called the Third Meeting to possibly refer to the revamped Sime Darby after 4 big plantation groups were merged into it.

They were generous to minority shareholders giving each member a RM50 voucher tenable at either of the two restaurants within the Sime Darby Convention Centre. They also provided breakfast and two cartoons of pink guava juice as token door gifts.

Anyway, I was reading its report particularly on the property division. From what I read,there seems to be no recession as far as the buyers are concerned for Sime Darby Properties. All the schemes launched were in the millions starting from 2 1/2 storeys super links. Even their condominiums and service suites were snapped up like hot cakes!

Looking at the trend,it looks like the new property developments that are going away from the Petaling Jaya-Subang Jaya connurbation are also attracting hot money. Even far away and remote Bukit Jelutong houses; starting beyond a million ringgit found more than willing financially capable buyers! The rate that Sime properties are being snapped up;it looks like the next stop will be around the Bukit Raja and Kapar and Meeru region and beyond to as far as Kuala Selangor.

Will people actually pay so much money for Sime Property projects in such far-away places.

Only time and the economy can tell.

China: The View from Fidelity International

'No, not yet,' said Anthony Bolton,Fidelity International's star fund manager. He has reversed his decision to retire citing that investments in China is too compelling for him to take the back seat right now.

Fidelity has just announced that Bolton will run a China equity fund; to be launched some time in the first quarter of 2010. Fidelity currently has three portfolio managers managing China funds with more than US$4 billion (RM13.57 billion) in assets.

Bolton says very few things would have persuaded him to come back — but China is one of them. “This year, or almost certainly next year, China will overtake Japan to become the second-largest economy in the world,” he says.

“I think in my lifetime, China will become the second-biggest stock market in the world. The center of gravity is shifting. That's why I want to play a part while I still have the chance.”

Over 28 years from 1979, Bolton ran Fidelity's Special Situations Fund, chalking up enviable annualized returns of 19.5 per cent, and easily beating the FTSE All Share Index return of 13.5 per cent. This means that £1,000 (RM5,551) invested over the period would have grown to £148,200.

Bolton announced his retirement in 2006 and the Special Situations Fund was split in half, partly to cushion the blow of his departure for investors. Over the past 18 months, he has been mentoring younger managers and analysts, first in the UK and more recently in Hong Kong. He and his wife will move to Hong Kong next year.

While details of the fund itself are sparse for now, Bolton aims to bring his value style to the table and tap on Fidelity's team of analysts for research. “I've invested for a long time. I can compare some things that are happening in China with what happened in developing markets in Europe,” he says. “Valuation has always been at the heart of my approach, but I'll also spend time evaluating franchises and looking for franchises that can grow in the long-term in China, and assessing management teams.”

The arguments in favour of China's ascent are familiar — low levels of government and consumer debt, and the emergence of consumers to drive the domestic economy.

“In September, I said I was worried about the West going forward,” Bolton says. “Once the recovery period runs out of steam, which I think will be in the first half of next year, the economies of the West will see slower growth than they saw before the crisis. It's because of the cost of solving the crisis.

“Governments have borrowed large amounts. It has succeeded in getting us out of the crisis, but I think it means that to some extent they have mortgaged the future.

“Faster growth will be seen in economies such as China, where growth is driven by domestic infrastructure and spending. You're going to see even more money flowing into the region.

“If you take the typical British investor with 15-20 per cent of his equity money in emerging markets and the majority in developed markets, for the next few years he should have the majority of his money in emerging markets and the minority in developed markets.”

Bolton has been following China since 2004 and has been investing there since 2005. Some 5 per cent of the Special Situations Fund was invested in Chinese stocks.

On the market cycle, he reckons the “bargain” stage is over. “I think we're still in the first part of the bull market, which will be multi-year,” he says.

“That applies as much in developed economies. But I think the faster growth and the best returns in the next few years will be in the developing world. It would have been lovely if we had launched this fund in the beginning of this year. I was optimistic about markets in the first part of the year. But I don't think valuations are as yet in the expensive phase when one should be more cautious. They're in line with long-term valuations. They can go further from here.”

Investors should note that Bolton famously called a bottom to the bear market in April.

On whether value investing works in China, where the stock market is often momentum-driven, he cites empirical research that valuation has been the biggest generator of 'alpha' or out-performance in emerging markets.

“My strong belief is that value works,” he says. “In general, I've been meeting a number of Chinese companies which I think are as good or very similar to (companies) in the UK or continental Europe.'

Bolton is expected to run the new fund independently from the three other Fidelity China portfolio managers, although he will tap into a common pool of analysts and infrastructure.

So, how do you like the insights and the analysis thus far.

It make sense, I think.

Worldly Ways: The Profound Truth

Ben Stein recited these remarks on CBS Sunday Morning. It is very profoundly written. Read on.

" My confession:

I am a Jew, and every single one of my ancestors was Jewish. And it does not bother me even a little bit when people call those beautiful lit up, bejeweled trees, Christmas trees. I don't feel threatened. I don't feel discriminated against. That's what they are, Christmas trees.

It doesn't bother me a bit when people say, 'Merry Christmas' to me. I don't think they are slighting me or getting ready to put me in a ghetto. In fact, I kind of like it.It shows that we are all brothers and sisters celebrating this happy time of year. It doesn't bother me at all that there is a manger scene on display at a key intersection near my beach house in Malibu . If people want a creche, it's just as fine with me as is the Menorah a few hundred yards away.

I don't like getting pushed around for being a Jew, and I don't think Christians like getting pushed around for being Christians. I think people who believe in God are sick and tired of getting pushed around, period. I have no idea where the concept came from, that America is an explicitly atheist country. I can't find it in the Constitution and I don't like it being shoved down my throat.

Or maybe I can put it another way: where did the idea come from that we should worship celebrities and we aren't allowed to worship God as we understand Him? I guess that's a sign that I'm getting old, too. But there are a lot of us who are wondering where these celebrities came from and where the America we knew went to.

In light of the many jokes we send to one another for a laugh, this is a little different: This is not intended to be a joke; it's not funny, it's intended to get you thinking.

Billy Graham's daughter was interviewed on the Early Show and Jane Clayson asked her 'How could God let something like this happen?' (regarding Hurricane Katrina).. Anne Graham gave an extremely profound and insightful response. She said, 'I believe God is deeply saddened by this, just as we are, but for years we've been telling God to get out of our schools, to get out of our government and to get out of our lives. And being the gentleman He is, I believe He has calmly backed out. How can we expect God to give us His blessing and His protection if we demand He leave us alone?'

In light of recent events... terrorists attack, school shootings, etc. I think it started when Madeleine Murray O'Hare (she was murdered, her body found a few years ago) complained she didn't want prayer in our schools, and we said OK. Then someone said you better not read the Bible in school. The Bible says thou shalt not kill; thou shalt not steal, and love your neighbor as yourself.. And we said OK.

Then Dr. Benjamin Spock said we shouldn't spank our children when they misbehave, because their little personalities would be warped and we might damage their self-esteem (Dr. Spock's son committed suicide). We said an expert should know what he's talking about. And we said okay.

Now we're asking ourselves why our children have no conscience, why they don't know right from wrong, and why it doesn't bother them to kill strangers, their classmates, and themselves.

Probably, if we think about it long and hard enough, we can figure it out. I think it has a great deal to do with 'WE REAP WHAT WE SOW.'

Funny how simple it is for people to trash God and then wonder why the world's going to hell. Funny how we believe what the newspapers say, but question what the Bible says. Funny how you can send 'jokes' through e-mail and they spread like wildfire, but when you start sending messages regarding the Lord, people think twice about sharing. Funny how lewd, crude, vulgar and obscene articles pass freely through cyberspace, but public discussion of God is suppressed in the school and workplace.

Are you laughing yet?

Funny how when you forward this message, you will not send it to many on your address list because you're not sure what they believe, or what they will think of you for sending it.

Funny how we can be more worried about what other people think of us than what God thinks of us.

My Best Regards, Honestly and respectfully,

Ben Stein"

What a gem of a article!

Japan-Deflation and On set of Recession again?

Troubled signs are in the air once again for the Japanese economy.

Reuters reported on Nov 27 that Japanese consumer price index [excluding volatile food and energy prices] slid in the year to October at the fastest rate since 2001 with increasing signs that weak demand is weighing on prices, while a tumbling dollar adds to price pressures.

This data will put more government pressure for a Bank of Japan policy response to deflation and a possible return to recession.

“Deflation and yen strengthening could significantly damage Japan’s economy, so the government and the Bank of Japan would need to do something,” said Takeshi Minami, chief economist at Norinchukin Research Institute.

The so-called core-core consumer price index, similar to the core index used in the United States, fell 1.1 per cent and matched a record from 2001, the last time Japan slid into deflation, as companies slashed prices of electronics and package tours to lure households to spend.

“It’s hard to judge what the BOJ may do. One option would be for the central bank to announce a commitment to markets that it will keep low rates for some time. That way it can push down money market rates further,” Minami said.

The core consumer price index, which excludes volatile fresh fruit, vegetable and seafood prices but includes oil products, fell 2.2 per cent in October from a year earlier, sliding for an eighth straight month and matching a median market forecast.

The dollar slumped to a 14-year low of 84.82 yen today as investors shunned riskier assets due to concerns about Dubai’s debt problems.

The dollar’s fall may deepen Japan’s woes, hurting exports and deepening deflation by pushing down import prices.

“The yen rise is really picking up recently, and as a result it seems that core CPI prices are probably going to fall by at least 1 per cent on a year/year basis for a while,” said Yoshikiyo Shimamine, chief economist at Dai-ichi Life Research Institute.

In a rare positive sign, Japan’s jobless rate fell to 5.1 per cent from 5.3 per cent in October, lower than a median market forecast of 5.4 per cent.

Household spending rose 1.6 per cent in October from a year earlier, more than double the median market forecast for a 0.7 per cent rise.

Japan’s economy grew at the fastest pace in more than two years in the third quarter as stimulus lifted consumer spending and capital spending rose, but analysts say growth will slow as falling wages reduce the lure of subsidies on cars and electronics.

The government said last week the economy was back in deflation for the first time since 2006 in view of slides in consumer prices and nominal GDP, and huge slack in the economy as measured by the GDP gap.

The BOJ has forecast three years of deflation to March 2012 but raised its assessment on the economy to say it is picking up, despite grumbling of the government, which is worried about deflation and another recession in the world’s No.2 economy. — Reuters

Demise of Chan Hung Lieh

November 24th,2009 saw the sad passing of one of the greatest villain actor in Shaw Movies.

Chan Hung Lieh first started acting in " Come Drink with Me" in 1966 and scored international success.From then on, he got type-casted and was very successful in every dastardly role given to him by Shaw Brothers.

I have yet to see a villain in any Chinese movie who can exhibit such villainy as Chan. We will miss him dearly.

Bye Bye Dubai World!

Oh, how ambitious Dubai was. Its economic model? Debt financing through the concept of OPM(Others People's Money}. It was a wonderful concept those days, touted by most financiers.

Th country that could do no wrong by building anything, some of which even defy climatic constraints,finally buckled.

The fateful day was Nov 27. This is the report from the Straits Times of Singapore.

The Dubai Emirate government would not bail out its flagship, Dubai World of its US$59 billion debt. It was too massive for comfort. So, the Dubai Government asked for a six months' reprieve for its flagship holding company.It's called a 'standstill' for all repayments.

The payment standstill raised the spectre of the biggest sovereign default since Argentina in 2001.Global credit rating agency Standard & Poor's, which rules on a company's or government's ability to repay debts, said the announcement “may be considered a default”.

For the banks that financed the borrowing binge that fuelled Dubai's ascent — total debt is estimated at US$80 billion.

The reality check that landed on Wednesday was that Abu Dhabi, the oil-rich governing emirate of the United Arab Emirates, will not unconditionally bail out its reckless neighbour.

Instead, a genuine restructuring of Dubai's debt, with pain being shared equally between Dubai and its bankers, needs to take place.

The announcement shocked the markets and Dubai's bankers.

“It's shocking because for the past few months the news coming out has given investors comfort that Dubai would most probably be able to meet its debt obligations, and most analysts were of the view that Nakheel's commitments would be met,” said asset manager at SICO Investment Bank.

The bonds of Dubai World's property developer, Nakheel, dropped sharply and the cost of insuring against a Dubai government default soared.

To some extent the announcement of the standstill request was mitigated by earlier news on Wednesday that Dubai had raised US$5 billion from Abu Dhabi banks. Still, that figure was considerably less than the US$20 billion Dubai had been hoping to attract from investors in the region as well as abroad.

“What is interesting is the timing,” said Chris Davidson, an expert on the region at Britain's Durham University. “This indicates that the money from Abu Dhabi is not to be spent on Nakheel and Dubai World.”

The decision to take such a step comes just weeks before Nakheel, the developer of Dubai's famed palm-shaped islands, was due to make payment on its US$3.52 billion of Islamic bonds.

The conglomerate, which also owns Dubai's huge port operations and has taken stakes in glamorous overseas properties like Barneys and MGM Mirage in Las Vegas, has billions of dollars of payments due in the months that follow.

In 2006, its unit Dubai Ports World was locked in a Herculean tussle with Singapore's PSA International for British port operator P&O, which Dubai eventually clinched.

Earlier this year, Dubai raised US$10 billion in a bond issue that was taken up by the Abu Dhabi central bank.

It is clear now that these sums have not been enough — especially as many of the assets in Dubai World's diffuse portfolio have plunged in value over the last year.

Dubai World bosses have ruled out a firesale of any assets and say they are sure of a recovery in real estate prices, which have dropped by as much as 40per cent.

Dubai's economy was hit hard as the global credit crunch over the past year ended a six-year boom in the region and sent the emirate's once-flourishing property sector into decline.

The government said it had appointed a special support fund to manage the restructuring effort and that Deloitte had been hired as an adviser. “As a first step,” the statement said, “Dubai World intends to ask all providers of financing to Dubai World and Nakheel to 'standstill' and extend maturities until at least May 30, 2010.”

Dubai World is run by Sultan Ahmed Sulayem, a close adviser to Dubai's ruler, Sheik Mohammed Rashid al-Maktoum, who has insisted publicly that Dubai and Abu Dhabi will work together to reach a solution on the debt question.

But while Abu Dhabi may sit upon 9 per cent of the world's oil and manage the largest sovereign wealth fund, it is evident now that it is not willing to just write a blank cheque to cover all of Dubai's mounting debts — at least not right now.

The world exalted the magic that was Dubai World then. Today, it wants nothing to do with it no matter how fanciful its projects were. How sad.....

Britian: GDP Downgrade 2009

Things do not seems to look up for Great Britain. The Dubai meltdown has caused reverberations in the FTSE and now this.

Reuters has this to report London, circa Nov 27,2009.

British Chancellor Alistair Darling will downgrade the 2009 economic outlook when he presents his pre-budget report next month but still point to growth resuming at the turn of the year as he predicted in April.

Treasury sources told Reuters yesterday that the unexpectedly rapid fall in output in the first quarter of the year meant that the economy would probably shrink by around 4.75 per cent, instead of the 3.5 per cent decline estimated at the time the budget was made.

The British economy has now declined for six successive quarters, marking the longest recession in at least 50 years and lagging behind many other major economies that have already started growing again.

But Treasury sources are cautiously confident that growth will resume around the turn of the year, pointing to recent survey evidence from the Confederation of British Industry and official retail sales data for October.

"The assumption is that the economy grew between 0.2 (per cent) and 0.4 per cent in Q4," one Treasury source said.

Darling appeared to lay the groundwork for a downgrade of the 2009 forecast in his pre-budget report on Dec 9 when he told Parliament earlier yesterday that his initial forecasts had been in line with most forecasters when it was made.

"Since then, new data has shown that most economies, ours included, suffered a severe shock in the first quarter of this year," he said.

Treasury sources indicated that Darling would likely stick to his forecast for economic growth of 1 per cent to 1.5 per cent in 2010 as most forecasters were somewhere in the middle of that range, having predicted much lower out-turns in April.

Has Great Britain become the Old Man of Europe?

Genting: Better Profits in Q3,2009

Genting Bhd reported today a profit in the third quarter as more people visited its casinos and flagged a satisfactory performance for the full year.

“Whilst the global economy continues to show signs of recovery, the group remains cautiously optimistic of its prospects,” Genting said in its results statement.

Genting, valued at US$7.8 billion (RM26.5 billion), posted July-September net profit of RM371 million against a loss of RM40 million a year ago.

Analysts do not provide quarterly earnings forecast for Malaysian companies, but Genting’s third-quarter net profit accounted for 38 per cent of analysts forecasts of RM967 million for the full year.

The group’s unit Genting Singapore is building Resorts World Sentosa (RWS), the city state’s second integrated resort, and it is also the largest casino operator in the United Kingdom.

The casino in Singapore, seen as one of the group’s key earnings drivers in the future, is on track for a January opening.

“We presume that Genting Singapore will command 45 per cent share of the S$4 billion (RM9.6 billion) gaming market,” Andrew Lee, head of research at Maybank Investment Bank said in a recent note.

Genting, Southeast Asia’s largest gaming company, also has substantial interests in oil palm plantations, power generation and property development which it deems as non-core businesses for sale at the right price.

Out of 22 analysts tracked by Thomson Reuters I/B/E/S, 18 had buy or strong buy recommendations on Genting, with only two rating it a sell or underperform.

Genting shares have nearly doubled this year, outperforming the 45 per cent rise in the broader market index.

The Carry Trade: Hot Bubble,Double Trouble!

The Asian Development Bank (ADB) circa Nov 25 has raised red flags that Southeast Asian countries may suffer asset bubbles if hot money continues to flow in.

The Business Times Singapore reported that Noritaka Akamatsu, senior adviser at ADB’s Office of Regional Economic Integration, has said that some regional governments are thinking of limiting capital inflows in the “short-term, liquid side of the market”. This could destabilise financial systems.

“They are clear about the benefits of long-term inflows such as foreign direct investments, but there is concern about the short-term money,” he said.

Last week, Indonesia’s central bank said that it was “studying” possible limits on foreign ownership of short-term debt but has no plans for controls on capital or the currency.

Meanwhile, within Asia, the South Korean government plans to hold talks on what can be done to handle inflows financed with cheap US-dollar loans — the so-called carry trades.

The strong inflows into the region result partly from the yield differential between Asian economies and Western markets. The US has slashed its benchmark rate to near zero, and it is not clear if there will be a rate rise soon.

As a result, global investors seeking higher returns on their money are parking capital in regional assets — and driving up regional currencies against the greenback.

Akamatsu warned that the stronger currencies may crimp Asian exports growth to the West, as most South-east Asian economies are still run on export-oriented growth models.

To sterilise the effect on currency values, central banks typically raise the supply of domestic units, but this can potentially fuel domestic inflation.

And if central banks mop up the added liquidity in their systems by selling government bonds, this may leave them with higher debt on their books, and raises concerns about whether central banks are sufficiently capitalised to take on higher interest expenses.

Akamatsu also said yesterday that the ADB was working with the Chinese authorities to issue a yuan-denominated “panda bond” — a second tranche since 2005.

The money would be used to finance development projects in China, but he declined to disclose the amount or the timing of the issue, citing price sensitivity.

According to ADB’s Asia Bond Monitor, East Asia’s local-currency bond markets grew 15 per cent in the third quarter of 2009 from a year earlier, as governments and corporations took advantage of lower interest rates to fund spending.

So will Malaysian assets and stocks go up soon on this "hot air" money?

Bank Negara.: The Rate Stays!

For the sixth time, Bank Negara Malaysia kept the interest rates steady at 2.0 per cent,saying inflation will remain modest in 2010 as the economy revives.

Analysts said that the central bank appeared in no hurry to hike rates, in sharp contrast with some other central banks in region, and the bank said current monetary policy was “appropriate” and would continue to support economic activity.

The decision comes as Asia’s third-most trade dependent economy is recovering from an economic slump triggered by the global financial crisis. A pick-up in domestic demand helped the economy to contract less-than-expected 1.2 per cent in the third quarter.

“If there are any rate hikes, we think it will be in the second half of next year in the small magnitude of 25 to 50 basis points,” said Julia Goh, an economist with CIMB in Kuala Lumpur.

The Malaysian government kicked in with a RM67 billion ringgit stimulus package to cushion the impact of global slowdown, which the central bank said was helping the recovery.

The central bank noted that the private consumption and public sector spending would lend support to the economic growth going forward. While that was expected to turn inflation positive in the coming months, the central bank was not alarmed about price pressures building up in the economy.

“In the absence of further unanticipated price adjustments and external influences, inflation is expected to remain modest in 2010,” the central bank said in a statement.

The central bank said it would only hold six rate setting meetings from 2010 onwards, down from eight up until now, in accordance with a new act.

“As price pressures and inflation expectations are expected to remain contained going forward, the assessment is that the current monetary policy stance is appropriate and will continue to provide support for economic activity,” the statement added.

A Reuters poll showed 15 economists saying rates would be held at 2 per cent with the earliest sign of a hike coming after the first half of next year.

The central bank has cut the benchmark OPR by a total of 150 basis points since November in an attempt to reduce the impact of the global downturn on the local economy.

It stopped easing in April and has repeatedly said that rates are “appropriate” and that rate cuts had been “frontloaded”.

Inflation is not a worry as consumer prices have turned negative. It was a negative 2 per cent in September and inflation is not expected to return until the fourth quarter.

Bilingualism in both English and Mandarin is Better

This is an interesting article. It may yet pave the way for Malaysia to be more serious about developing English language skills then be hung out to dry in a deeply globalised world of intense global economic competitiveness.

This mysinchew.com article is appended.

NOV 24 – Unlike their ancestors, young generations from Johor Baru and Singapore do not emphasise family ties. Even though they are still maintaining certain blood relations, the sense of alienation becomes greater and greater as time goes by.

Sometimes, these young people will look down on each other but inevitably, they also reveal their sense of inferiority in front of each other.

When young people from Johor Baru go to Singapore, they will find that their command of English is terrible and, thus, they dare not speak English.

Similarly, when Singaporean young people come to Johor Baru, they always say, shyly: “I’m sorry, my Chinese is not good.”

Young people in Johor Baru (more appropriately, Malaysia) speak broken English while young Singaporeans speak terrible Chinese. This is the inevitable result of different education policies in the two countries, as well as a fact that must be accepted by the two governments.

Interestingly, after a few decades of bilingual education policy, Singapore found that the English standard of its young generation is fine but the Chinese standard is poor.

It may even affect their competitiveness in the future. Its Minister Mentor Lee Kuan Yew admitted that Singapore was headed in the wrong direction and he vowed to spend the rest of his life correcting the mistake.

After neglecting English for over 30 years, former Prime Minister Tun Dr Mahathir Mohamad realised the reality that English is, after all, the international language. Therefore, he made a sharp about turn before his resignation and implemented the policy of teaching Science and Mathematics in English.

When Prime Minister Datuk Seri Najib Tun Razak took the office, he decided to gradually stop the policy that was hastily implemented in the past. However, it is still a major educational goal for the Malaysian government.

Malaysia and Singapore, with interrelated historical and cultural backgrounds, have to bear the consequences of educational deviations.

As Malaysia had neglected English, its young generation is not able to make good use of English in learning and communications. As a result, the country can only cultivate “kampung champions” who are unable to walk out from their local communities.

As Singapore had neglected Chinese, English has become the “mother tongue” of its younger generation (primary school first year students from English-speaking families have increased to the current 60% from the 10% in 1982). It does not conform to its national interests as Singapore has targeted China’s vast economic market.

In fact, we are committed to enhance our English standard while Singapore is committed to enhance its Chinese standard based on a common objective: a better integration with the world and compete in the international market.

It is going to become a bilingual world. It will be a greater advantage if we can master more languages. But when will our young people be no longer afraid to communicate in English and Singaporean young people, to speak Chinese? 10 years? 20 years? Or 30 years?

Malaysia: Maid Exporter?

This news article by Lee Wei Lian in the Malaysian Insider is worrisome.

With the current educational issues as yet unsettled and where runaway blind language nationalism seems to be winning all the way up to the tertiary level,your worse nightmare of not only a brain drain but now also a brawn drain is fast becoming imminent. Do not look down on the likes of Bangladeshis and Indonesians coming to work in Malaysia. Malaysian may soon be in the same situation if the current crop of politicians in power do not mend their ways!

Let us read Wei Lian's report circa November 24, 2009.

The nation’s mismanagement of talent could have serious repercussions not only on its ambitions to become a high income economy on par with that of developed nations but could also lead it to fall further behind even its counterparts in the region.

Head of research at Corston-Smith Asset Management, Lim Tze Cheng, recently did a tour of South East Asian countries and came away sufficiently impressed that he feels Malaysia may soon be found lagging behind its neighbours that it was once ahead of.

He cited a recent visit to the Philippines, a current major supplier of maids, where he visited a company, International Container Terminal Services Inc (ICTSI) and he drew comparisons to local port champions Westport and Port of Tanjung Pelepas.

He said that ICTS now draws 50 per cent of its revenue from eight profitable ports outside the Philippines, and noted that no Malaysian port company can boast of similar achievements.


“I give it a 70 per cent chance that Malaysia will be exporting maids in 20 years. I wouldn’t be surprised if that happens unless we get our act together,” he said.

Lim says that the issues plaguing Malaysia includes its “problematic” education system and distressingly low ability to retain talent.

“Whoever manages to excel in our education system will be courted by Singapore,” he points out.

Lim is not the only one who is worried about Malaysia’s talent issues and there has been warnings from other parties as well including the World Bank and the Malaysian Employers Federation (MEF).

MEF executive director Haji Shamsuddin Bardan says that Malaysia is currently a net exporter of talent with outflows exceeding inflows.

According to Haji Shamsuddin, Malaysia has only about 38,000 expatriates as compared with seventy to eighty thousand in the 1990s even while some 785,000 Malaysians are working abroad, two out of three of which are professionals.

“Our ability to attract expatriates is quite challenged,” he said.

If Malaysia falls further behind our neighbours in the next twenty years, it wil be a case of history repeating itself.

Lim points out that Malaysia in the 1970’s was once economically on par with Korea.

“Electronics will be dominated by Thailand and Philippines, plantations by Indonesia, financial services by Singapore and our oil could be depleted in 20 years,” Lim predicts.

[Malaysia’s future? Bangladeshi workers wait at an airport carpark turned immigration depot in KLIA. — Reuters pic]

Malaysia’s future? Bangladeshi workers wait at an airport carpark turned immigration depot in KLIA. — Reuters pic
“The (Malaysian) economy seems to be caught in a middle-income trap - unable to remain competitive as a high-volume, low-cost producer, yet unable to move up the value chain and achieve rapid growth by breaking into fast growing markets for knowledge and innovation-based products and services,” the World Bank said recently.

Prime Minister Datuk Seri Najib Razak appears aware of the problem and has been stressing the need for the country to embrace innovation to escape the “middle-income trap” as well as attract overseas talent, Malaysian or otherwise.

He noted recently as an anecdote that half of the medical specialists working at the Mt Elizabeth hospital in Singapore were Malaysians and two weeks ago hosted a dinner for about 100 Malaysians in Singapore and told them that the government would make Malaysia a better place to live and work in, to bring back its citizens who are residing overseas and also attract global talent to the country.

“We will create more opportunities, more excitement and more buzz in Malaysia to attract the Malaysian diaspora and expatriates to the country,” said Najib.

Lim says that revamping the education system could take years and one fast way to lure talent was to open the Malaysia My Second Home programme to talented individuals such as scientists and researchers instead of limiting it to just retirees.

Haji Shamsuddin says that the government needs to put in place the right policies and structures to retain local talent.

“Otherwise, we become a training ground for others,” he said.

Are those in power deaf, blind and brain dead?

Growth in 2010-A Citigroup Perspective

Citigroup Inc. upgraded its 2010 economic growth forecasts for several countries on Monday (23 November 2009), and said it expects a sustained but uneven global recovery next year.

The annual report, released by Citi's global research unit, said almost all major economies exited recession in the second and third fiscal quarters.

Central banks are unlikely to hike key interest rates through next year, and the threat of global inflation appears contained, according to the report.

Citi said a recovery looks to be even across major economies in the beginning of the year, while Asia - excluding Japan - will see sustained momentum.

While the U.S. will see fairly strong economic growth, Europe and Japan will experience a more gradual recovery.

Citi lifted its 2010 growth domestic product outlook for the U.S., Japan, Britain, Australia, New Zealand, Hong Kong, Korea, Argentina, Hungary, Poland, Czech Republic and Turkey.

However, it said credit availability will likely be limited for at least another year or two as banks seek to raise extra capital.

Michael Saunders, Citi's global head of developed markets economics, warned that countries will need to adjust some fiscal policies.

"Global economies need central banks and governments to successfully manage the exit strategies from extreme monetary accommodation, without creating further instabilities and denting future growth prospects," he said.

Saunders expects the rankings of global economies to change drastically in the next 15 years as resource-rich regions like the Middle East, Africa, Latin America, Russia and Brazil see growth.

Meanwhile, as emerging markets industrialize, consumer spending there is expected to fill the gap left by moderate spending in the U.S. and other industrial countries.

This is a broad stroke of the brush. Hope it is indicative of some sustained growth.

Pornthip: Forensic Crusader

Nov 21,2009 is a day of much significance to the family of the late Teoh Beng Hock. This day the dead 30-year-old political aide buried in July, will be exhumed for another autopsy.

A new autopsy team will reassess if he really did die from jumping off a high building unaided or was pushed out a window after being beaten up to the point of passing out.

Thai pathologist Dr Pornthip Rojanasunand engaged by the Selangor state government had testified in an inquest last month that there was a 80 per cent probability that his death was a homicide rather than a suicide, which was the finding of the first autopsy by two local pathologists.

The coroner’s court has agreed to let Dr Pornthip and one other British forensic expert — hired by the Malaysian Anti-Corruption Commission (MACC) — observe the second autopsy, which under Malaysian laws, must be performed by local doctors.

It is only Dr Pornthip’s second time advising a case outside of her native country.

Her first consultation outside Thailand was three years ago, in Muslim-majority Aceh.

Like Malaysia, Indonesia’s laws limit a foreign forensic expert’s role in an autopsy.

She had been called in to assist a second and independent post-mortem on an opposition member who was thought to have been killed by the country’s powerful military.

“It was more than six months after his death. He was also Muslim. The body was not in good shape,” Dr Pornthip said.

Unlike a Christian burial where the body is encased in a coffin, a Muslim body is wrapped up in a shroud and laid directly into the earth.

Dr Pornthip had previously testified that a post-mortem is best done within the first six months of burial as the natural decaying process holds a higher risk of eating up evidence in suspicious deaths.


Even so, in Aceh, the second autopsy confirmed the public sentiment that foul play was involved in the victim’s death.

What happened next to the case?

Dr Pornthip shrugged her thin shoulders, sending her multi-coloured lion’s mane fluffing sideways.

She does not know. She was specifically engaged for her scientific knowledge only.

In Thailand though, things are slightly different for her.

As the director-general of the Bangkok-based Central Institute of Forensic Science Institute (CIFS), she reports directly to the chief secretary in the Ministry of Justice, and is granted greater clout in the investigation process.

She explained that there was an attempt in Thailand a few years, to bring the various investigative and prosecution divisions under the same roof, namely the Ministry of Justice, to better co-ordinate the entire justice system.

But it failed. She blamed it on politics, noting that then Prime Minister, Thaksin Shinawatra — who she says once worked as a police constable — refused to push the Bill in Parliament.

The police itself, said Dr Pornthip, reports directly to the prime minister, again unlike Malaysia where its powers lies with the home minister.

Then, as now, the police force decides what cases go to court for prosecution, unlike Malaysia where it is the Attorney-General who decides.

Apart from these outward divisions of power, the two countries are bound by a common public perception that the authorities — the police especially — frequently abuse their power and have a deeply entrenched practice of selective prosecution.

These two points were critically highlighted in the Corruptions Perceptions Index launched worldwide earlier this week by global corruption watchdog Transparency International.

Dr Pornthip is often at odds with the chief of police in public over her institute’s findings, which more often than not, contradict the findings of the police investigation teams, and this has put her personal and professional life at risk.

Strident critics in Thailand have labelled her an “egomaniac”, a fact she is well aware of, but was surprised to learn that those hateful comments have also started springing up in Malaysia in the wake of the Teoh Beng Hock case.

“I don’t want to be something like a heroine. When they want to find the truth, I don’t want my name to be first,” she added, and explained that it was because of high-profile cases that received a lot of media attention that she became famous.

Dr Pornthip remarked that it had started when a member of the Thai Parliament was involved in a case.

The MP’s brother was found dead. Police investigators claimed he had shot himself but she carried out an independent investigation and found that it was impossible for him to have shot himself and backed it up with her scientific findings.

“For me, I don’t care about politics or sensitive issues. I just try to help the victims find the truth,” she said.

The forensic science institute she now leads was established seven years ago, she said, to give “a choice for the people to come in and ask for help in investigation” when the main door for justice through the police had slammed in their faces.

She related that anyone can walk in to CIFS from the street and request their help for a second opinion.

Dr Pornthip explained that CIFS aimed to boost the standard of investigation practices in Thailand, to make it more accountable and transparent.

Dr Pornthip suspects people dismiss her because of her looks.

The work they do is a combination of forensic science, which deals with death investigations, and forensic medicine, which deals with living patients, she added.

“We are trying to train crime scene investigators to be specialists,” she summarised.

Currently, the CIFS is manned by 300 people, with 85 per cent made out of scientists who hold great knowledge but little field work experience.

It gets five cases a week involving unnatural death where foul play is suspected. Thirty per cent of their investigations confirm those suspicions.

But mainly CIFS is kept busy with work in rural areas to help identify anonymous bodies. This amounts to 1,000 missing people reported a year.

Those jobs, though, she delegates to the rest of the staff. For now, she has thrown herself into investigating a series of “organised crime” in southern Thailand, which has been put under martial law.

Leading her 15-man team — few of her colleagues want to head south to work and she doesn’t want to force them — Dr Pornthip collaborates with the local military force to collect evidence and trains the soldiers on how to conserve, collect, secure and handle crime scene investigations.

That consumes most of her time and energy. She related that the serial killings are highly organised hate crimes and take many forms, from beheadings, which are the most difficult to piece together — because the heads are often missing from the crime scene — to bombs.

Dr Pornthip noted with concern that the use of explosives was on the rise and foresees a trend for them in strife-torn regions across Asia.

Smiling brightly, she added that Malaysia was lucky to be spared such forms of terrorism.

So,in this second Teoh Beng Hock autopsy, will it confirm Portips's contention? Time will tell.

Meanwhile,let us now wait for the new findings on the Teoh Beng Hock case.

Malaysia: Smaller Contraction in Q2

KUALA LUMPUR, Nov 20 — Malaysia is still inching its way out of recession as the economy experienced a smaller contraction of 1.2 per cent from 3.9 per cent in the second quarter this year due to stronger domestic demand and “stabilisation of external demand.”

But while the country appeared to be heading out of recession, foreign direct investments in the third quarter fell to RM6.2 billion from RM9.1 billion in the previous quarter.

Bank Negara Governor Tan Sri Dr. Zeti Akhtar Aziz said today that the increase in domestic demand is due to stronger private consumption and higher public sector spending.

All of the country’s economic sectors also recorded an improved performance except for agriculture.

“The service sector expanded further by 3.4 per cent supported mainly by improvements in the wholesale and retail trade, finance and insurance, and real estate and business services sub sectors,” she told reporters when announcing the GDP figures today.

The growth in the construction sector was higher at 7.9 per cent from 4.9 per cent due to the implementation of construction projects under the stimulus packages while the manufacturing sector declined “at a slower pace” of 8.6 per cent.

The inflation rate has also declined by 2.3 per cent.

“Headline inflation rate, as measured by the change in the Consumer Price Index (CPI) declined by 2.3 per cent on an annual basis in the third quarter. The decline in consumer prices was largely due to the effect of the cumulative downward adjustment to retail fuel prices since the June 2008 price increase,” she explained.

The country’s trade surplus remained at RM26.7 billion as both gross exports and imports contracted.

“Gross exports declined by 22.3 per cent. A gradual recovery in demand from manufactured products and increased exports of LNG contributed to a smaller decline in commodity exports.

“A smaller decline in gross imports of 18.3 per cent was contributed by slower contraction in imports of intermediate and consumer goods which were in line with the improved manufactured exports and higher private consumption spending,” she said.

But there was some sobering news on the foreign direct investment (FDI) front.

The gross inflows of foreign direct investment (FDI) has decreased to RM6.2 billion from RM9.1 billion in the second quarter while the net FDI amounted to RM2.1 billion from RM6.5 billion.

“The bulk of the FDIs was directed mainly into the manufacturing and services sectors. Overseas investment by Malaysian companies recorded a large net outflow of RM3.4 billion mostly for investment in the services sector.

“Meanwhile, portfolio investment registered a net inflow of RM8.8 billion due largely to the proceeds of bonds issued abroad by a non-financial public enterprise in the oil and gas sector during the quarter to finance its future capital expenditure,” she said.

Zeti was confident that the economy is set to register positive growth due to the improvements in international economic and financial conditions.

“Economy activity in the advanced economies continued to stabilise while several regional economies have recorded positive growth in the third quarter.

This positive trend is expected to continue into 2010,” she said.

However Zeti still remained cautious because she believes that the global economic recovery is “likely to be gradual and uneven and the outlook remains uncertain.”

Iskandar: Red Flags on the Horizon

It is telling. All is not well in Iskandar Malaysia, the country's showpiece economic corridor project.

Two chief executive officers of the Iskandar Regional Development Authority (IRDA) have not lasted two years on the job and there are now rumblings over the slow pace of progress from Middle East investors.

Apart from that, the relationship between some of the main players — the Johor Civil Service (JCS), Khazanah Nasional, Iskandar Investment Board (IIB) — leaves much to be desired.

Unwilling for the situation to unravel further, Johor Mentri Besar Datuk Abdul Ghani Othman is signalling his intention to Putrajaya for the state government to take more control of the mammoth project billed as Malaysia's Shenzen to the developed Singapore across the Johor Straits.

He wants IRDA to come directly under the purview of the state government, and rely less on instructions from Khazanah Nasional, the federal sovereign wealth fund tasked with developing the economic zone named after the state Ruler.

The IRDA board is now jointly chaired by the Prime Minister and the MB but The Malaysian Insider understands that the Johor MB could be assigned full chairmanship, giving him control of the regional authority.

Ghani has already started exerting his authority, much to the chagrin of the top brass in Khazanah Nasional. Late last month, he demanded the resignation of the incumbent CEO Harun Johari.

Officials at Khazanah Nasional wanted Harun to be given six more months on the job but last week, the IRDA board quickly accepted Harun's resignation. He will leave in January 2010 for IRDA to have another fresh start.

Harun, an ex-Shell stalwart, was hand-picked by Khazanah Nasional for the top position. He quickly brought in several of his former Shell colleagues to fill senior executive positions, and the organisation ballooned to over 150 staff under his charge.

His critics charged that he lacked charisma but his supporters argued that he is a process-driven individual who was effective behind the scenes. Harun replaced Datuk Ikmal Hijaz, the former Pos Malaysia CEO.

The latter was also hand-picked by Khazanah Nasional to drive IRDA and make it a world-class, one-stop centre for investors.

After being appointed, Ikmal also surrounded himself with several former colleagues from Pos Malaysia or the now defunct Renong Group, in which he oversaw the construction of the Gelang Patah crossing and massive land acquisition in Nusajaya.

The Malaysian Insider has learnt the new CEO of IRDA is Ismail Ibrahim. He is currently director of the National Physical Planning Division under the Urban and Rural Planning Department.

The Muar-born career public servant, who is a British-trained town planner, was among the pioneers assembled by Khazanah Nasional back in 2006 to draw up the Comprehensive Development Plan for the south Johor Economic Region (now known as Iskandar).

He later served as senior vice-president (Planning & Compliance) and became Johor's Federal Commissioner, but quit suddenly to return to the Housing and Local Government Ministry.

Ghani has already told Ismail that he expects an overhaul of the top management of IRDA, wanting him to rid the authority of deadwood.

At least four senior personnel are expected to be removed.

The JCS — a body whose support is necessary if any project is to take off in the southern state — has welcomed the appointment of Ismail.

Relations between the JCS and Khazanah Nasional have been uneasy since the inception of the project in 2006, with Johor civil servants complaining of being sidelined from the decision-making process. They have resented the fact that important decisions regarding Iskandar were being made in Kuala Lumpur.

The shortcomings in IRDA, and to a lesser extend IIB, come at a time when several of the Middle East investors are exhibiting signs of restlessness at the pace of the project.

Government officials told The Malaysian Insider that Khazanah Nasional was forced to buy back some land in Node 1 of Iskandar which it sold to a consortium of Middle East investors. This happened after some disagreement over responsibilities and obligations.

So is Iskandar reeling from unresolved Federal-State relationship issues or more so because of lack of political will? This is a rhetorical question.

Endgame: Curtains for Oprah

It's official.

Oprah Winfrey will end her top-rated daytime talk show that has featured newsmakers from President Barack Obama to movie star Tom Cruise, in September 2011.

“I can confirm that she’s planning to make an announcement that she will end ‘The Oprah Winfrey Show’ at the completion of the 25th season, in September 2011,” said the representative for Harpo Inc.

The announcement is expected on today’s programme where Winfrey is expected to detail the reasons behind her decision.


Industry watchers believe Winfrey will move to cable network OWN, a Los Angeles-based joint venture she has with Discovery Communications Inc, where she will air another talk programme similar to the current show.

OWN had been expected to launch as early as 2009, but that date has been delayed. When the network is up and running, it will be available in more than 70 million homes.

“The Oprah Winfrey Show,” broadcast from Chicago on ABC stations across the United States and in some 145 countries worldwide, is one of the TV industry’s biggest money-makers and the top-rated US daytime talk show, averaging 7.1 million viewers this year.

Winfrey, 55, is regarded as one of the most influential opinion-makers in the United States, and just this year was No. 45 on Forbes magazine’s list of the world’s most powerful people.

The programme has made her among the world’s wealthiest individuals, with a net worth estimated at US$2.3 billion (RM7.81 billion), according to financial magazine Forbes, and she regularly ranks at the top of the list of the most powerful women in media.

Ending her current show will hit CBS Corp’s CBS Television Distribution arm, which syndicates the show, and Walt Disney Co’s ABC’s owned and operated TV stations that broadcast the show.

Malaysia: Worse is over in April 2009?

I like the show of sheer bravado. I certainly love the optimism. Let us read what Mustafa Mansur,FMM's president has to say.

"There are signs of recovery in the country’s exports with regional trade picking up the slack from traditional export markets," he says.

"Nevertheless, the overall picture for exports is still unstable," he added.

“It’s slowly picking up, we’ve seen some improvement in the third quarter compared to the second quarter this year,” Mustafa told a media briefing at the launch of the National Shippers’ Conference 2009.

“I think we’ve reached rock-bottom and for Malaysia, the worst month for exports was April,” he further added.

He noted that regional trade with the Asean nations, China and India had been instrumental in mitigating the impact of the economic slowdown, adding that “the pharmaceuticals, food and furniture industries have seen improvement in overseas demand.

However he cautioned that the overall picture for exports was still not stable with those in the electrical and electronics industry seeing a rise in demand due to seasonal adjustments for year-end holidays.

He reckoned that based on the more positive economic data currently available, the global economic recession would not continue into next year.

Some economists have warned that the recession would extend to next year if the effects of pump-priming measures wear off or if governments started to withdraw stimulus initiatives.

The Statistics Department’s updated report for the September external trade showed exports declined 1.1% to RM47.2bil month-on-month while year-on-year, they fell 24.2%.

Morgan Stanley Research analysts in a Nov 13 report stated that “exports will show second-order derivative improvement but nonetheless declining by double-digit as Malaysian exports have lagged the region.

Recovery in Asia’s exports-reliant economies such as Malaysia, South Korea, Taiwan and Singapore is largely premised on a better outlook for external trade, which has fallen drastically in 2009.

Singapore’s trade ministry said in a statement yesterday that the recovery of the island-republic’s economy in 2010 was closely linked to global conditions and a slower recovery in demand for exports would moderate growth prospects.

Arent'we all hopeful? I hope the optimism is not misplaced.

Malaysia: Cross- Border Con

What has become of Malaysia? Is this the kind of things that are allowed to happen here? Is there lax enforcement at the border or by the local police and immigration authorities?

These are rhetorical questions. No answers required.

Such news item are are a bane for Malaysia.Let us read one of the happenings.

November 19,2009:
City police today rescued 14 Thai women and a 15-year-old Thai girl who were forced to work as “hostesses” after being lured into the country on the promise of lucrative jobs.

A team of 11 police officers found the victims, aged between 20 and 30, in four different locations around Cheras — four at the Awana Puri Condos, three at the Taman Yulik Apartments and eight in two town-houses in Taman Midah, here.

DSP Razali Abu Samah, an officer with the Secret Societies, Vice and Gambling Unit at the Kuala Lumpur Police Headquarters, said the women came to the country legally but had overstayed as most of their visas and passports had expired, and that they were kept like prisoners at the locations.

“We believe these women were tricked into coming to the country by their ‘agents’ on the promise of getting decent jobs, but instead, they were forced into selling their bodies,” Razali told reporters at the raid scene in Taman Midah.

A 37-year-old local man, believed to be pimp, was also arrested outside the Awana Puri Condos.

“It took us three days to observe their movements. And finally today, we could only arrest one of two suspects. We managed to grab him while he was taking the girls to see the clients,” he said.

During the four-hour operation, which started at 1.30pm, police seized a car with several packets of condoms and lingerie inside. Investigation revealed that the girls were locked up in the houses and were fed once every three days.

Apart from that, there was electricity but no water supply in the houses and the women were only permitted to come out during night when they were taken to see the clients, he added.

Such inhumanity. Have we descended to the level of animals?

Get Them and Hang 'em High

The order is out.

It's disciplinary action,police action or investigation by the MACC if you are found wanting in your duties that cause misappropriation and wastage of public funds in the 2008 Auditor-General's Report. The same goes for power abuse.

The job of taking immediate action on officers in ministries, departments, agencies or government-linked companies is given to the secretaries-general of ministries, department heads and chief executives of government agencies.

In issuing the order, Chief Secretary to the Government Sidek Hassan said the Special Task Force headed by him to study the report had agreed that the Audit-General Ambrin Buang write in to the ministry secretaries-general, department heads and chief executives of government agencies concerned asking them to take prompt action. The actions are:

* Conduct further investigations into power abuse cases, misappropriation and wastage of public funds that have been identified and take appropriate action against those involved either disciplinary action under Public Officers (Conduct and Discipline) Regulations 1993 or recommend surcharge under the Financial Procedure Act 1957. If it was proven the offence committed was a criminal case, a report has to be lodged either with the police or with the Malaysian Anti-Corruption Commission.

* Inform findings of investigations and action taken to the Auditor-General within one working week. The Auditor-General will then table the report received at the Special Task Force meeting; and

* Disciplinary action can be taken against secretaries-general, department heads and chief executives for failing to take action within the stipulated period.

Sidek said in a statement today that the line of action has been agreed upon by the Special Task Force at its second meeting on Nov 12. The meeting also agreed that the Attorney-General’s Department would prepare the procedural guidelines to serve as a guide to ministry secretaries-general, department heads and chief executives of government agencies.

The procedures are necessary to ensure actions taken on the people implicated are not challenged in court, he said. On cases involving ministry secretaries-general or department heads, he said the letter (from the Auditor-General) will be sent directly to the Public Service Department director-general.

Sidek said cases involving contractors or consultants will be reported to the professional body concerned and a copy of the report will be sent to the Finance Ministry and the Contractor Services Centre in the Works Ministry to be blacklisted.

“The government agencies involved has been asked to step up enforcement to ensure the blacklisted companies are not awarded government contracts,” he added.

For the public who has heard all of this before,is it for real this time?

Singapore: Inflation Watch

Singapore’s central bank lifted its 2010 inflation forecast to between 2.5 and 3.5 per cent today and said it was carefully watching property and asset prices, though it saw no significant change in underlying price pressures.(Reuters;18 November 2009)

The Monetary Authority of Singapore also said the behaviour of the Singapore dollar’s exchange rate band, which it uses to set monetary policy, was consistent with its policy for zero appreciation in the currency.

The central bank, which decided against encouraging currency appreciation in October, is expected by economists to potentially tighten policy when it next meets in April, after the trade-dependent city-state emerged from its worst ever recession.

“The Monetary Authority of Singapore might be watching inflation more carefully but I think they will still be keeping the exchange rate band steady till April,” said David Cohen of consultancy Action Economics.

“The global economic situation is still uncertain. An awful lot can happen between now and April.”

Singapore said today that the upward revision in its forecast for the consumer price index in 2010 was due to a pending increase in property tax rather than any broader increase in underlying inflation.

The previous forecast was for CPI to rise 1 to 2 per cent next year.

“There has not been any significant change in our assessment of underlying cost and price pressures in the economy from the time of the monetary policy statement release in October,” Monetary Authority of Singapore Deputy Managing Director Ong Chong Tee said at a briefing.

The higher inflation view came after Singapore’s economy grew 14.2 per cent in the third quarter on a seasonally adjusted annualised basis, revised slightly down from an earlier estimate of 14.9 per cent growth but in line with forecasts.

Singapore gave its first forecast for 2010 growth at between 3 and 5 per cent, but cautioned that a recovery in advanced economies remained fragile with a boost from stimulus measures and inventory cycle adjustments likely to taper off in the second half of 2010.

The Singapore dollar was little changed at 1.3847/62 versus the US dollar by 0810 Malaysian time, versus 1.3842 before the GDP data. The stock market edged up 0.6 per cent.

Economists were more bullish than the government.

“The risk is on the upside for both inflation and growth. Crude oil prices have risen from US$35 (RM118) to US$80 (RM270) a barrel, there’s higher commodity prices, and China, India and many non-OECD countries are recovering quicker-than-expected which will push up prices,” said Selena Ling, head of treasury research at Oversea-Chinese Banking Corp.

“People tend to look in the rear-view mirror and see Lehman, deflation, etc, but if you look forward, the risks are more on the upside in many Asian countries.”

Japan’s economy expanded at its fastest pace in more than two years in the third quarter as government stimulus helped domestic demand produce its first contribution to growth in six quarters.

China, South Korea and Indonesia also have reported a pick up in annual economic growth in the September quarter compared with the previous quarter.

An economic rebound in Asia’s major Western export markets, however, has been far more tepid amid weak consumer sentiment.

Medical Tourism: Potential Coffer?

So, it looks like the Malaysian government is finally getting more serious about medical tourism after playing with it like a kitten with a ball of wool.

And so a Minister is now jumping on the bandwagon to try to identify and reduce the so called "irritants" impeding its growth. He said concrete measures will also be taken to stem the brain drain of highly skilled doctors. Haven't we heard of this tune before?

According to the Singapore Business Times,the establishment of the brand new Malaysia Health Travel Council — helmed by Ooi Say Chuan, the former deputy secretary-general of the International Trade Ministry — seeks to advance the sector which earned an estimated RM400 million last year, by acting as a one-stop centre and serving as a platform for the private sector and government to iron out problems.

“With medical tourism, we cannot go wrong as we have very good doctors,” Minister in the Prime Minister's Office Tan Sri Nor Mohamed Yakcop said at a seminar on healthcare tourism here yesterday.

“Unfortunately some of our doctors are attracted to neighbouring countries to work, but we will get them back. We must look at what the irritants are and remove them,” he added, noting these could include mutual recognition of overseas accreditation and certification.

His comments on addressing the issues driving away skilled professionals echoes recent comments by Prime Minister Datuk Seri Najib Razak that more needs to be done to reverse the serious brain drain if Malaysia hopes to have the talent to innovate so that the country can transform into a high-income economy.

To promote medical tourism, the income tax exemption on the value of increased exports was raised to 100 per cent from 50 per cent in the last budget, Nor Mohamed said, adding more incentives would be revealed later.

Despite having the ingredients to be a big player in the booming sector, estimated to be worth US$40 billion (RM140 billion) globally, Malaysia has been slow to leverage on the advantages, a number of participants lamented, pointing to the lack of focus over the past decade even though the potential had already been identified after the Asian financial crisis in the late 1990s.

The various initiatives submitted had gotten nowhere in the tangle of government agencies and, as a result, “we have muddled our way through”, one participant observed.

Another noted the renewed focus on healthcare and medical tourism notwithstanding, Malaysia needs to find its niche to stand out in the region against more established markets such as India, Singapore and Thailand.

Over the past decade, the brain drain has also intensified and in the medical line, Malaysia now faces a dire shortage of doctors — especially specialists — in public hospitals. At the same time, doctors in private practice are drawn to better-equipped hospitals and fatter salaries and prospects overseas, many of them moving over to Singapore.

However, some entrepreneurial doctors have also been quick to exploit the demand for private healthcare and medical tourism, and according to Association of Private Hospitals of Malaysia (APHM) president Jacob Thomas, a number have returned, in part due to improving facilities.

The APHM, however, does not have statistics on the numbers of Malaysian doctors practising overseas or those that have returned.

Ooi told participants they ought to capitalise on the new “phenomena” of patients from developed nations travelling to less-developed ones for medical procedures.

A medical procedure in Malaysia would cost about one-tenth of that in the United States, he said, and provided the example of a heart by-pass, which costs US$9,000 locally versus US$11,000 in Thailand and US$18,500 in Singapore.

Given the sector was worth only RM59 million in 2003 and about RM400 million now — indicative figures only because not all hospitals give details — the potential is vast, with Penang and Malacca the leading states in the country.

Malaysia:Neither Here nor There

Malaysia risks missing its goal of becoming a high-income nation as it has lost its edge as a low-cost producer and lacks the investment to compete in more advanced industries, .

In its first country report on Malaysia, the Washington-based body also said that as a trade-dependent country, Malaysia should not unwind its RM67 billion in economic stimulus as that could choke off a nascent recovery.

“The economy seems to be caught in a middle-income trap - unable to remain competitive as a high-volume, low-cost producer, yet unable to move up the value chain and achieve rapid growth by breaking into fast growing markets for knowledge and innovation-based products and services,” it said.

Private investment in Malaysia, which famously spurned advice and cash from the International Monetary Fund in 1998, is below that of virtually every other Asian country and has fallen dramatically since the Asian financial crisis.

According to World Bank data, private investment in Malaysia fell to 12 per cent of gross domestic product in 2008 compared with 30 per cent prior to the Asian crisis.

The government that has ruled this country for 52 years has announced a series of economic reforms aimed at winning back foreign investment that increasingly finds a home in neighbouring Thailand and Indonesia.

However, portfolio and direct investment flows have been negative since the second quarter of 2008 and there have been few signs that investment has picked up in response to the government measures.

The World Bank noted that while Malaysia has a high proportion of high tech exports it served as a low-skilled assembler of imported parts “rather than a creator of technological and product innovations”.

One major limitation on moving up the economic value chain is Malaysia’s education system, which churns out tens of thousands of graduates who are ill-equipped for the kind of high-value work such as biotechnology that the government has identified as growth areas.

Education in Malaysia has become mired in a deep political row as the government recently switched to Malay language instruction for math and science from English, a move critics said was designed to appease its ethnic Malay voter base.

While private investment has plummeted, the government’s spending has risen sharply. Malaysia expects to rack up its biggest budget deficit in 20 years at 7.4 per cent of gross domestic product this year.

The government expects the economy to shrink 3 per cent this year and to grow by 3 per cent next year, although the World Bank was more optimistic.

“With East Asia leading the recovery and advanced economies showing progressive improvement, the Malaysian economy is projected to grow at 4.1 per cent in 2010, following a contraction of 2.3 per cent in 2009,” it said.

The bank was, however, less optimistic on the government’s plans to slash the budget deficit in 2010 to 5.6 per cent of GDP, forecasting that it would be 6.4 per cent of GDP.

World Bank: Don't Exit Too Quickly!

The World Bank warned today that Malaysia should not exit its fiscal pump priming as it could choke off the country's economic recovery.

However, the bank also cautioned that extending fiscal support for too long "may hamper the credibility of medium-term fiscal consolidation, reduce room for future stimulus, increase the risk of asset price bubbles and constrain the private sector once demand picks up," the World Bank said in a country report on Malaysia.

Malaysia is expected to rack up a budget deficit of 7.4 per cent of gross domestic product this year, its biggest in over 20 years, in part due to two fiscal stimulus packages worth a total of RM67 billion.

The extra spending was aimed at offsetting a slump in global demand that has hit Asia's third-most export dependent economy hard.

The government expects the Southeast Asian country's economy to shrink 3 per cent this year and to grow by 3 per cent next year, although the World Bank was more optimistic.

"With East Asia leading the recovery and advanced economies showing progressive improvement, the Malaysian economy is projected to grow at 4.1 per cent in 2010, following a contraction of 2.3 per cent in 2009," the World Bank said. —

MCA: Feel the Force of Incumbency

The Malaysians have a word for this. It's called 'pusing-pusing'. One day they are enemies. The next day,they are friends. Such strange bedfellows these politicians really are, particularly in MCA.

Throughout the first 9 months of 2009, the Presidential Council and the Central Committee had nothing on their minds but on how to get rid of Dr. Chua, their Deputy President. To them, Dr. Chua was one huge liability because of his notorious sex scandal which was conveniently filmed on DVD and readily available on the Internet.They sacked him as Deputy President and terminated his MCA membership which they later converted to a suspension.

At the infamous Double Tenth EGM on 10 October, to the dismay of many, Dr. Chua got back his membership in MCA. To make matters worse, the Registrar of Society subsequently decided thet Dr. Chua was still the Deputy.

In the face of an impending revolt from other members wanting his blood, party president Ong Tee Kiat, conveniently reinstated Dr. Chua back to his original position.

As expected more fall-out took place. That is what I called 'pusing-pusing'. Liow Tiong Lai (Vice President and also Deputy President for a brief moment), Wee Ka Siong (Youth chief)and Chew Mei Fun (Women Wing chief) got caught in the middle as they showed their hands 'too early' for wanting to get rid of Ong Tee Kiat.


Today at a Central Committee sitting, Wee Ka Siong and Chew Mei Fun, among others were booted out unceremoniously from the Presdiential Council. Wee and Chew weeped unabashedly.



Such is the MCA wayang at this stage. We shall see some more on 28th November when the so-called illegal EGM takes place.