20 January 2010: Genting's Red Letter Day

It was an auspicious day-a fantastically good day for Singapore when thousands of guests flocked to the Lion City on Jan 20.

When the United States issued a travel warning about possible terror threats in Sabah, Resorts World Sentosa, Singapore’s first casino-resort, opened four hotels at 8.18am and the over 5,000 rooms were fully booked on the first night. Its prosperity was conceivable.

After the opening of the casino and the Universal Studios theme park, Singapore is expected to attract 13 million tourists annually. In addition to Resorts World Sentosa, The Marina Bay Sands, built by Las Vegas Sands, will also be opened in April this year. After the opening of the two integrated resorts, Singapore may achieve the goal of attracting 17 million of tourists yearly in 2015.

When they have their own casinos, will Singaporean gamblers still travel along the way to Genting Highlands? Tourists from China are very likely to shift their targets, too. I’m afraid that businesses in Johor Bahru would as well be affected.

What countermeasures will Malaysia take to meet Singapore’s measures to attract tourists? Other than the theme parks, including Legoland Malaysia, in the Iskandar Special Economic Zone, Malaysia does not seem to have other new tourist attractions. Legoland is scheduled to be completed and opened to the public in April 2012 while the indoor theme park will be opened in 2013.

The Tourism Ministry should introduce new tourism packages in this two-year time before the theme parks are opened to the public to attract foreign tourists to come over on their way to Singapore’s casinos and theme parks.

The competition in the tourism industry will become more intense in the future. For example, South Korea recently announced to spend about US$3 billion (RM10.2 billion) to build the largest theme park in Asia, which covers 435 hectares. In addition to a Universal Studios theme park, there will be a water park, golf courses and resorts. It is expected to be opened in 2014 and it targets rich tourists from China. The Malaysia government should wake up from Rip Van Winkle mode now as it can no longer indulge in last year’s statistics, which indicated a 7.6 per cent increase of tourist arrivals.

From Singapore’s tourism strategy, we can see the determination and vision of the Singapore government to actively revive and diversify its economy, as well as to look for new growth areas. We cannot help but worry over the Malaysian economy that has turned into dead waters.

After it separated from Malaysia, Singapore developed into a port and subsequently, it developed its financial and services industries, pharmaceutical industry, casinos and integrated resorts. This has fully reflected its pragmatism and flexibility. Malaysia on the other hand has backpedaled and beset itself with her own socio-political problems, which they can do without in the first place.

Since independence, Malaysia has always been relying on petroleum and palm oil. It does not succeed in developing multimedia information technology while its services industry is not open enough. It loses talents and fails to attract more foreign investors. When would the economy be transformed?

Today, Genting Bhd has transferred its capital and talents to Singapore and at the same time, it aims for investment opportunities in the United States. But Malaysian politicians are still quarreling over the issue of selling sand to Singapore. Why can’t they sit down and study how should they face the challenges from Singapore?

Do you know why Malaysians failed? They do not feel with their heart;they do not think with their head.All they want is more! more and more. This 'beggar thy neighbour' approach must stop now!

Talent Search: Just Be Fair

Reading Lim Mun Fah's news article in mysinchew.comm today about talent flight is certainly worrisome. I will quote his ideas liberally.

It is about time we grab the bull by the horns and stop playing political pussyfooting. Talents are leaving by the drove. Once they leave, there is no turning back. Even for those who turned back out of sheer patriotism and slogged for awhile on the motherland, they leave again as the situation does not seem to improve. In fact things are getting too sensitive for comfort!

PM Najib has all his grand plan. The concept plan can be brilliant. The game plan? Not so. Yes, extol about the need to make Malaysia a shining example of a successful nation of the 21st century. Tell the citizens to change their mind-set. Appeal to them to create brands that are native to Malaysia.

Lim Mun Fah' search for talent of the Malaysian brand can unstuck after a brief search. Apart from squash and badminton where we can say Nicole David and Lee Chong Wei carried out national flag with national pride,there was nothing really there.

In reality, I’m sorry to say that I can’t even find a single Malaysian brand shining in the world.

True, we have our champions but they are mostly domiciled elsewhere.Take for instance, we have founder, group chief executive officer, and President of the Singapore-based Hyflux Group Olivia Lum and pen drive inventor, president and co-founder of the Taiwan-based Phison Electronics Corp Pua Khein-Seng. They may have been Malaysian by birth but their upbringing and success were more the result of an accomodaing foreign nation.

According to the data provided by the Foreign Affairs Ministry, from Jan to Aug last year alone, a total of 210,000 Malaysians have migrated to foreign countries. These are alarming statistics. It is even more worrying that according to a global human resources survey, eight out of ten Malaysians indicated that they would consider emigration for better job opportunities. And it is estimated that as many as 900,000 Malaysian professionals and talents are currently working abroad.

The government has launched a program to attract Malaysian talents who are working abroad to return. But only about 50 applications are received every year and very few of people do really return. Anyhow they were not retainable and left again shortly for foreign shores.

Lim Mun Fah asked a very pertinent quastion in his article. "Is it because they do not love their motherland? Or their motherland does not appreciate them at all?"

The reason may be very complicated or it may also be very simple. But certainly, low income is not the biggest problem. Because if they really take income into account, they would not have returned in the first place only to be outward bound once more. Lim Mun Fah had in fact sort of answer his own question by saying obliquely that the more important factor is, "they could be disappointed and dissatisfied with the corrupt, unfair and closed system."

To Lim, the discrimination policy is the main factor that causes nearly a million of creative and ambitious talents to leave Malaysia.

His parting worlds speaks volume to all of us. "Talents do not need privileges but they are asking for fairness. If Malaysia really wants to be a shining example of a successful nation of the 21st century, it must first restore fairness!' How true!

From India With Love

PM Najib has high-tailed to New Delhi to conclude a key economic pact between Malaysia and India, possibly eyeing India’s “mind-boggling” infrastructure spending plans to help fuel growth in Malaysia. So, is that the new economic model to be brought home from the Indian sub-continent?

Kuala Lumpur mooted a Comprehensive Economic Cooperation Agreement (Ceca) with New Delhi some months after Singapore and India signed a Ceca in June 2005 — the most ambitious agreement of its kind attempted by India until then.

As usual while Singapore played the hare, Malaysia fumbled along the way tortiose- style owing to political inaction and difficulties on both sides.This is one time, Malaysia Tidak boleh!

Meanwhile, ASEAN and India clinched a free trade agreement (FTA) that came into effect three weeks ago. While Malaysia is one of the biggest beneficiaries of the FTA, Najib wants to do more to take bilateral trade beyond the current US$10 billion (RM34 billion) level.[Are you sure?]

“Our bilateral trade has been growing at an annual pace of 23 per cent over the past five years.It is time to take our collaboration to a higher level. The Ceca is vital for us to conclude and I would like to see it in place by the end of the year if possible.”

Najib, faced with extremely flagging growth at home, is looking for new engines to boost economic expansion, and India’s US$1.2 trillion economy, which some expect to clock double-digit expansion next year, is a huge lure.

Malaysian infrastructure companies have completed 51 projects in India worth US$2.3 billion in recent years, and are currently handling contracts worth a similar sum. These range from airports to highways and parking facilities.

India has emerged as the nation with the largest infrastructure plans, Najib explained.

“It is mind-boggling when you think that India is planning to spend half a trillion dollars on infrastructure over the next five years,” he said. “Malaysian companies have a good track record in infrastructure and they tell me that the Indian government is a good paymaster.”[Who isn't except Malaysia which is bucking up, I hope...]

He also made a strong pitch for Indian companies to consider listing their shares on the Malaysian board and to tap its capital markets.[How-lah? No momentum!]

“Our capital market is broad-based and our regulatory framework meets international standards,” he said. “Our bond market is the third largest in Asia on a GDP-adjusted basis, after Japan and South Korea. The World Bank and International Finance Corp have all generated funding through our bond market.”

Let us see the substance in action. Can Malaysia Boleh lagi?

Singapore: To Be a Free Economy

Hong Kong is the freest econmomy for a straight 16th year followed by Singapore.

Shrugging off the effects of the global crisis, Singapore kept its rank as the world’s second freest economy.

The United States dropped from sixth to eighth place in the wake of more interventionist policies, as economic freedoms fell across the globe last year on massive spending and bailouts during the crisis. This was announced by the Index of Economic Freedom yesterday.

Hong Kong recorded an overall economic freedom score of 89.7, with Singapore at 86.1 — one point lower than last year after faring worse in monetary and investment freedom.

The index, published by The Wall Street Journal and The Heritage Foundation, a conservative American think-tank, downgraded the country “for policies that distort domestic prices”.

But local economists were not concerned about the judgment.

DBS economist Irvin Seah said that it was probably referring to the Monetary Authority of Singapore’s control of the exchange rate as its monetary policy tool, which has kept the local currency from appreciating too much amid an uncertain recovery.

“We are a small and open economy dependent on imports, which highlights the importance of relying on exchange rate policies to control domestic prices,” he said.

The report praised economic strategy here, saying “flexibility and openness have been the foundation of Singapore’s transformation into one of the most competitive and prosperous economies in the world”.

Although growth here has slowed significantly due to the crisis, noted the report, “with strong fundamentals in place, the economy is likely to rebound quickly”.

Things were less rosy for the US, which responded to the downturn in ways that “have significantly undermined economic freedom and long-term prospects for economic growth”.

The report said measures such as fiscal stimulus spending, regulatory changes and bank bailouts have lowered entrepreneurship and job creation and enlarged deficits. The report also blamed the US for retreating on free trade.

But David Cohen of Action Economics said it was a little over-critical as “most people would agree that the US economy was depressed and fiscal stimulus was appropriate”.

The index ranks 179 economies based on 10 measures of economic openness, regulatory efficiency, the rule of law and competitiveness.

Where do you think is Malaysia?

RWS: Head Start and a Boon for Singapore

SINGAPORE (AP): Singapore's first casino-resort partially opened Wednesday, a key part of a government plan to reduce reliance on manufacturing and brand the tightly controlled city-state as a cosmopolitan Asian capital.

Resorts World Sentosa, built by Malaysia's Genting Bhd for 6.6 billion Singapore dollars ($5 billion), opened 1,340 rooms in four hotels, including a Hard Rock hotel and a property designed by architect Michael Graves. Its 7,300-seat ballroom, one of Asia's largest, will host its first event at the end of this month.

A Universal Studios theme park is expected to open in the coming weeks on the sprawling 49-hectare complex on Sentosa, an island a quarter of a mile off Singapore's coast. No firm date has been set, said Genting chairman Lim Kok Thay, contradicting reports it would open next week.

The resort's casino, the first of two planned for the city-state, is expected to open in March following delays in getting its license approved.

Genting is still likely to steal a march on rival Las Vegas Sands, which is looking at a May launch for its $5.5 billion Marina Bay Sands casino-resort.

Both casino operators are eyeing Asia's high-roller market - an endeavor Singapore facilitates with its 12 percent tax on net revenue from big-money gamblers, compared with Macau's 39 percent. Genting expects tourists to make up 60 percent of visitors to its casino with up to a quarter of those tourists to come from China.

Singapore - known for its ban on chewing gum sales and canings for crimes some countries would rule as minor - strictly controls public speech and assembly though has become socially more liberal and allowed greater artistic freedom in recent years. The decision to allow casinos followed a rare national debate though the government's desired outcome was never in doubt.

The government expects the two casino-resorts to increase the country's gross domestic product growth by up to 1 percentage point, boost tourist arrivals and add 35,000 jobs.

With a well-educated population that speaks English, Chinese and Malay, Singapore is increasingly focusing on finance and tourism, said Irvin Seah, an economist with DBS Bank in Singapore.

"Services are really a green pasture going forward for Singapore," Seah said. "It's the area which we really want to fully exploit and it's where we have a comparative advantage in the region." Manufacturing, which has long dominated the economy, has been slowly leaving the country as companies seek cheaper labor costs in regional neighbors such as China and Vietnam.

"Competitors are catching up very quickly," Seah said. "In some segments of the manufacturing sector, we are certainly fighting a losing battle."

MCCI: Take My Advice!

Lee Wei Lian reports this from the Malaysian Insider today (21 January 2010).

The country’s oldest business association,the Malaysian International Chambers of Commerce and Industry (MICCI)has given its 5 sen advice to the government.

What are these?

PAY ATTENTION to foreign equity limits, environment and security standards, and infrastructure particularly broadband communications if you want to boost you flagging foreign direct investment. Harsh,don't you think?


Stewart Forbes, executive director MICCI did not mince his words. Make a choice then take big bold strides to a new economy or be left behind to remain a middle income country by more aggressive emerging economies. In other words, be a thorough-breed horse at Ascot or be a poor donkey in the backwaters,by and by.

Let us look at his priority pickings.

i) Broadband-target a 50 per cent penetration rate by this year.

It must be international standards. Currently, the ICT infrastructure is a limiting factor and doesn’t meet the needs of high tech industries.

Malaysia way way up front when it began its Information Communication Technology (ICT) drive in the 1990s viz the launching of the Multimedia Super Corridor that stretched from Kuala Lumpur’s business district to the new administrative capital Putrajaya and Cyberjaya, its centre for the IT sector. But like the proverbial hare, it slept while other countries in the region leapfrogged Malaysia to provide better broadband and other IT facilities.

ii) Stop protecting local industries. continue this protection and you cannot reform the economy, much less open it up to foreign investors.

Malaysia is currently struggling to move up the economic value chain but the government has traditionally dragged its feet when faced with making difficult decisions such as the introduction of minimum wages, removal of subsidies, the phasing out of uncompetitive industries and the implementation of meritocracy partly to avoid upsetting its voter base and partly due to its aversion to risk.

This tendency to avoid reforms in the past could also explain why Malaysia’s development remains relatively stunted when compared with regional economies like Singapore, Taiwan and South Korea despite having a head start in education and infrastructure and the added bonus of plentiful natural resources.

The whole world is sceptically watching out for the new economic model to be unveiled in February 2010. This model is expected apparently to address some of the structural issues plaguing the country. Will the current government have a will of steel politically to see it through?

“If you want 100 per cent protection, you cannot do major changes but can only do tiny changes,” says Forbes.The time to take baby steps is well nigh over,Mr. PM. Baby, you need BIG STEPS here and now!

“Everyone is moving fast now,” he added “If you move too slow, you will be overtaken.”

iii) Talent Search. Forbes also suggested that the country look to importing the talent it needs in order to scale up its skills capacity and highlighted the difference in the number of expatriates in Malaysia and its neighbours.

He said it is easier now than before to bring in expatriates but the number, currently about 38,000, is still “critically low.”

He added that he heard of a case where the Singapore government declined to give one expatriate a work permit but offered a permanent residency instead.

“Singapore is saying: ‘Let’s lock talent into our gene pool’,” said Forbes.

So, Malaysians-take heed and start running doubly fast as you need to be the quickest hare to win this game now!

RWS versus Marina Bay Sands

So,it looks like Resorts world Sentosa (RWS)has had its soft opening yesterday, much to the chagrin of the bosses at Marina Bay Sands. While the RWS has 4 hotels opened for guests yesterday who will dine at 10 spanking new retaurants, work is going on feverishly at the Marina Sand site to beat the new April dead-line.

The Singapore government is desirous that these two IRs can start on time.They estimate the full-year contribution to gross domestic product from the two resorts at 1.6 percentage points. This year though, the contribution is likely to be between 0.5 and one percentage point.

Most analysts and economists say they expect the resorts to be successful, with 70 to 80 per cent of revenues coming from gaming this year, The expect revenue of between 50 or 60 per cent as retail, entertainment and conference facilities are phased in over the next 12 months.

RWS, owned by Genting Singapore expects to open Universal Studios Theme Park anytime soon as to operate the casino tables before Chinese New Yearin February.

Getting the gambling tables open before Marina Bay Sands will stand RWS i ngood stead as they can sign up regular local gamblers before they have a chance to try the Sands.

Singaporens has imposed a charge of S$100 a day or S$2,000 a year for residents to visit the tables.

So,let us see how the RWS opening will unfold in the last couple of weeks.