Call to shed light on PDC’s huge debts owned to Penang govt


GEORGE TOWN: The state has been told to explain the financial status of Penang Development Corporation (PDC) over its alleged mounting debts.

Datuk Dr Muhamad Farid Saad (BN-Pulau Betong) said PDC received a RM600mil loan last year from Budget 2017, while in Budget 2018 the loan to PDC was approximately RM300mil.

Questioning if the debts indicate that PDC was not on stable financial ground, he asked if PDC would be able to pay back the huge sum to the state.

“Both loans are huge. How is PDC going to pay it all back?

“What has happened to the revenue of PDC in recent years? We would like some answers to the whereabouts of the expenditure on whether the sum was used for investment or loan to a third party.

“Is the PDC today not on stable financial ground until there were some who said that PDC has to take a bank loan to give out salaries,” he said when debating the Supply Bill and Budget 2018 at the state assembly sitting yesterday.

State Opposition Leader Datuk Jahara Hamid (BN-Telok Air Tawar) also raised her concern if PDC “was in the red”, considering that it was among the corporations in the past which had developed Bayan Baru and Seberang Jaya.

“PDC has also contributed to numerous state funds. But now, it is the opposite. PDC is borrowing money from the state government,” she said.

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Penang tables election budget for 2018: higher defict of RM740.5mil, paints rosy economic picture …



GEORGE TOWN: Penang has tabled a higher deficit state Budget of RM740.5million for the next fiscal year of 2018.

Chief Minister Lim Guan Eng when tabling the budget, stressed that it was an estimate and it can be reduced if the state records a higher revenue collection.

Among some of the initial highlights for the state was a free Rapid Penang bus service during peak rush hours in the mornings and evenings.

Allocations would also be given to aid the medical tourism and hi-tech manufacturing sectors.

Penang has tabled a projected budget deficit of RM748.5 million for next year, compared to a RM667 million deficit for this year as administration and living costs continue to escalate.

However, Chief Minister Lim Guan Eng stressed that the state has a unique distinction of tabling projected budget deficits every year yet recording actual surpluses.

Next year’s operating expenditure is RM1.25 billion, while the forecast revenue collection is RM503.7 million.

The cost savings come principally through the open tender system and an efficient administration, Lim told the state legislative assembly today.

After some 10 years of facing various external economic challenges, Lim said the state’s gross domestic product is projected to outstrip the national average growth of 5.2% for this year.

Penang is targeting a GDP growth of 6% this year with the main contribution coming from manufacturing and services, with farming also showing signs of promise through fish farming.

GDP per capita has increased from RM33,597 in 2010 to RM47,322 in 2016, a 30% increase. Penang’s GDP per capita is the second highest in the country, behind only Kuala Lumpur.

From 2015 to the first half of 2017, Penang attracted a total of RM13.8 billion in approved Foreign Direct Investment (FDI).

Tourism has also grown with the number of passengers at the Penang International Airport (PIA) hitting 6.7 million passengers in 2016, exceeding the airport’s capacity of 6.5 million passengers.

The success story in the last 10 years is reflected by annual budget surpluses since 2008, with accumulated budget surpluses over the eight year period between 2008 to 2015 reaching RM578 million.

Lim also announced a range of fresh initiatives, which pundits have described as a people-friendly fiscal plan designed to endear the state government to the voters with the next general election looming near.

> There is a “I Love Penang” card, which is a smartcard for all local residents that allows access to social amenities and benefits provided by the state. The public think tank Penang Institute will be the implementing agency for it, as they have been allocated a budget of RM4.5 million to produce and distribute the smartcards.

> A free public stage bus service was mooted during the daily peak hours in the mornings and evenings – it is aimed at reducing traffic congestion. The project is dependent on the cooperation of RapidPenang.

> Penang has allocated RM60 million to jumpstart a “Pinang Sihat” medical card programme for families whose combined household income is below RM5,000, where the state will subsidise treatment at private clinics.

A medical card will be issued to each recipient, who can only spend up to RM50 per visit to a panel of private clinics who are part of the Pinang Sihat scheme.

“This will help the recipients, who fall ill to see a doctor without worrying too much about expensive charges or travelling to government clinics that are far away from their homes,” said Lim.

> The free mammogram examination scheme for women above 35 years shall continue. So far more than 10,000 women have benefited.

> The state will also be increasing the annual payouts for senior citizens and the disabled from RM100 to RM300 for next year.

> A maximum bonus payout of RM2,000 will be accorded to civil servants who have a good disciplinary record while those below par will only receive RM1,000.

> The state will also allocate RM10 million for hill slope protection efforts, as well as to conceive a study on climate change, and tackle illegal farming.

Later, there was a protest at Komtar, led by former Penang PAS Youth head Mohamed Hafiz Nordin, who urged the state government to rescind the alleged appointment of PKR secretary-general Datuk Saifuddin Nasution Ismail as the new Penang Islamic Religious Council president, replacing Permatang Pasir assemblyman Datuk Salleh Man.

Hafiz argued that Saifuddin was not a religious scholar, therefore he was not suitable for the post. Saifuddin’s replied that holding protests is normal in a democracy.

Source:  Ian McIntyre and Imran Hilmi newsdesk@thesundaily.com

Much ado about nothing

Penang govt also gave an election budget, says MCA leader

“Public housing shortage is serious in Penang. Badminton courts and
swimming pools can be added into low and low medium-cost housing
projects. Tang Heap Seng”

WHAT is wrong with an election budget?

“Election budgets are happy and beneficial things for the rakyat,” said party secretary Tang Heap Seng.

He, however, advised Pakatan Harapan politicians not to “criticise something but did the same themselves”.

“Many Pakatan politicians criticised the Federal Budget and the Penang government did exactly the same.

“They claimed the Federal Budget will help Barisan Nasional win the general election.

“But then, the Penang government also gave an election budget,” said Tang during a press conference at the Penang MCA headquarters in Transfer Road yesterday.

Among the Budget 2018 goodies were Childcare Aid of RM300 for Working Mothers, RM300 aid for each local vocational school students and one-year waiver of business licence for about 29,000 hawkers and traders.

On the state Budget for next year, Tang said while there were many benefits, he was puzzled by the allocation of RM275mil to build 82 badminton courts and four Olympic-sized swimming pools.

“While sports are crucial to a happy society, we wonder why the state paid little attention to Penang’s urgent problems.

“Public housing shortage is serious in Penang. If the government wants to provide badminton courts and swimming pools, these could be added into low and low medium-cost housing projects,” he said.

Penang Gerakan vice-chairman Oh Tong Keong and secretary Hng Chee Wey also issued statements yesterday, expressing bewilderment at the RM275mil allocation.

In contrast, the tabled development expenditure for state Drainage and Irrigation Department is RM12.3mil.

Penang Island City Council and Seberang Prai Municipal Council will spend RM20mil on flood mitigation and for hillslope protection, RM10mil was budgeted.

Tang also said the RM53mil budgeted for the development of Islam was commendable, but wondered why only RM1.1mil would be given to Penang Hindu Endowment Board next year.

He said Chief Minister Lim Guan Eng only mentioned that RM30mil was given to non-Islamic religious development since 2008 when he tabled the Budget.

He said it would be ideal to allocate RM30mil each for the development of Christianity, Hinduism, Taoism, Buddhism, Sikhism and other minor religions yearly.

In a statement as well, Penang Women’s Development Corporation applauded the RM300 yearly aid for each working mother under the age of 60 with children aged six and below through the state Budget.

Meanwhile, Lim clarified that the bonus for civil servants would come from the reserved funds of this year’s Budget.

Earlier, Pulau Betong assemblyman Datuk Dr Muhamad Farid Saad had expressed confusion, saying, “How could you give a bonus this year through a Budget for next year?”

Malaysia’s Budget 2018 Highlights


KUALA LUMPUR: Prime Minister Najib Razak has tabled the RM280 billion Budget for 2018, his last before the next general election which must be called by middle of next year.

Below are Salient points of the budget from Dewan Rakyat.

Civil Servants

• 1.6 million civil servants to receive the following benefits:

– second round time-based promotions

– senior servants who retire due to health reasons will be accorded the same benefits as those who undergo mandatory retirement

– special leave for teachers increased to 10 days a year, up from seven

– seven days unrecorded leave for umrah pilgrimage

– women at least five months pregnant allowed to leave work an hour earlier while husbands accorded the same privilege if their work locations are in close proximity to each other

– maternity leave increased from 300 to 360 days throughout service with a maximum of 90 days a year

– RM1,000 set for minimum pension amount

Senior Citizens, Disabled, Children

• RM1.7 billion for the following areas:

– RM603 million to increase allowance of senior citizens from RM50 to RM350

– RM100 million to increase allowance for the disabled by RM50 a month

Digital Free Trade Zone

• RM83.5 million allocated for DFTZ in Aeropolis, KLIA.

• Increase minimum value for imports from RM500 – RM800.

Sustainable Development

• RM5 billion allocated under Green Technology Funding Scheme.

• RM1.4 billion to reduce non-revenue water programme.

• RM1.3 billion to build Off-River Storage as an alternative water source.

• RM517 million for flood mitigation plans nationwide.

Reduction in Income Tax Rates

• Reduction in individual income tax rates:

– RM20,001 – RM35,000: 5% to 3%

– RM35,001 – RM50,000: 10% to 8%

– RM50,001 – RM70,000: 16% to 14%

• Increase disposable income between RM300-RM1,000 while 261,000 do not have to pay tax

Foreign Domestic Helpers

• Allow employers to hire foreign domestic helpers directly without agent.

GST

• No change to Goods and Services Tax but government to propose either exemption or zerorising certain items and services.

– local councils

– reading materials

– cruise operators

– construction of schools and places of worship funded by approved donations

– oil and gas equipment imports under lease agreement

– import of big ticket items like planes and ships

– management and maintenance of homes with strata titles

Health

• RM27 billion for better quality health services.

• RM4.1 billion for medical supplies and consumables.

• RM1.4 billion to upgrade and maintain health facilities, equipment, ambulances and construction of operation theatres in three hospitals.

• RM100 million to upgrade hospitals and clinics.

• RM50 million to subsidise hemodialysis treatment; and RM40 million for medical assistance fund.

• RM10 million for treatment of rare diseases; RM30 million for health community programmes.

• RM50 million for voluntary health insurance scheme.

Housing

• RM2.2 billion allocated to boost home ownership.

BR1M

• 7 million benefited from RM6.8 billion in BR1M payouts and in 2018 the 7 million will continue to receive the same payout.

Orang Asli Benefits

• RM50 million for Orang Asli for economic development and quality of life enhancement.

• RM60 million for Orang Asli village development.

Indian and Chinese Benefits

• RM50 million for Chinese SME loans through KOJADI.

• RM30 million to be channelled to the 1Malaysia Hawkers and Petty Traders Foundation.

• RM65 million allocated for Chinese New Villages and RM10 million for house restoration.

• RM1.5 billion additional Amanah Saham units for Indians.

• Increase the intake of Indians to IPTA and public service (7%)

Bumiputera Benefits

• RM2.4 billion allocated to UiTM.

• RM3.5 billion for the following initiatives:

– RM2.5 billion for MARA higher education and training scholarships

– RM90 million for Program Peneraju Profesional, Skil dan Tunas

– RM200 million for MARA Graduate Employability Training Scheme or GETS

– RM555 million for Bumiputera Entrepreneurship Enhancement Programme (RM200 million for PUNB Entrepreneurship Programme and Business Premises; RM200 million for MARA Entrepreneurship; RM115 million for Vendor Capacity Programmes).

• RM150 million for Pelaburan Hartanah Berhad and RM150 million to EKUINAS.

Defence

• A total of RM14 billion for armed forces; RM9 billion for police force, RM900 million for Malaysian maritime.

• RM3 billion for purchase and maintenance of defence assets; RM720 million for the construction of 11 police headquarters and six police stations.

• RM490 million to MMEA for repair and maintenance of ships, boats, jetties and procurement of three patrol vessels.

• RM250 million to ESSCOM

• RM50 million to enhance weapon capability to combat terrorism.

• Government to build 40,000 houses in phases for families of armed forces personnel.

• RM40 million to upgrade five hospitals; build four polyclinics and one hospital for veteran armed forces personnel.

Rural Development

• RM200 million allocated for Felda for water supply and road upgrades.

• 112,ooo settlers will each receive windfall worth RM5,000.

• RM43 million allocation for Felda settlers and RM60 million for replanting of oil palm, RM164 million allocation to build 5,000 houses for second generation Felda settlers.

• RM1.1 billion for people-centric projects; RM1 billion to develop communication infrastructure; RM934 million for rural projects; RM672 million for electricity supply; RM420 million for clean water supply inclusive of RM300 million in Sabah and Sarawak covering 3,000 homes; RM500 million for public infrastructure maintenance; RM50 million for mapping and measuring of native customary land

– RM30 million for Sarawak, RM20 million for Sabah.

• RM6.5 billion for rural infrastructure which includes RM2 billion for the Pan Borneo Highway.

Education

• RM4.9 million allocated for 100 scholarships for TVET students.

• RM4.9 billion allocated for Technical and Vocational, Education and Training (TVET).

• RM200 million added to PTPTN fund for B40 families.

• Discount for repayment of PTPTN loans is extended to Dec 31, 2018 (20% for full repayment, 10% for 50% repayment, and 10% for direct debit salary deduction).

• RM100 for 3.2 million schoolchildren totalling RM328 million.

• RM2.9 billion for food aid, text books and minor federal scholarships.

• RM2.5 billion for maintenance of schools – RM500 million in Peninsula, RM1 billion in Sabah, RM1 billion in Sarawak, in addition to an existing special fund for maintenance.

• RM654 million for construction of four pre-schools; nine Permata schools; two centres for children with autism; 48 primary, secondary as well as vocational and matriculation centres.

• RM61.6 billion for development of education.

TN50

• RM20 million for Bukit Jalil sports school.

• RM112 million to construct 14 new sports complexes nationwide.

• RM1 billion to conduct sports initiatives to make country a sports powerhouse.

• RM50 million to fund social enterprise and NGOs to solve communities issues.

• RM40 million for open interview programme under the 1Malaysia training scheme (SL1M).

• All undergraduates and those in Form Six will continue to receive book vouchers.

• RM90 million for MyBrain programme for 10,600 students to further their studies at post-graduate level.

• RM400 million for research and development grants to public institutions of higher learning with a special allocation to Universiti Malaya to achieve status of Top 100 universities in the world.

• RM2.2 billion for JPA scholarships, the ministry of higher education and ministry of health.

• RM20 million for setting up of a Cultural Economy Development agency.

• RM190 million to upgrade 2,000 classes to become smart learning classrooms.

• To enhance present computer science module to include coding programme in primary and secondary school curriculums.

• RM250 million to build science, technology, engineering and mathematics centre.

• Special fund set up for children born between Jan 2018 to Jan 2022.

• Tax relief for employers who employ the disabled that include those involved in accidents and have critical illnesses.

• Local councils to make it mandatory for all new buildings to have childcare facilities, beginning in Kuala Lumpur.

Public Transport

• Government studying proposal for a new airport in Pulau Tioman.

• Government to build new airport for Mukah and expand airport for Kota Bahru and Sandakan.

• Government to upgrade Penang and Langkawi international airports.

• RM55 million transport subsidy for rural rail services from Tumpat to Gua Musang.

• RM45 million to create a biometric control system to monitor the movement of express bus services.

• RM95 million for the repair and construction of jetties as well as river mouth dredging.

• RM1 billion for public transport fund for start-up capital and procurement of assets like buses and taxis.

• RM3 billion for transport development fund for the purchase of maritime assets, aerospace technology development and rail.

Infrastructure

• Special border economic zone in Bukit Kayu Hitam to be developed.

• Pulau Pangkor to be declared a duty-free zone.

• RM230 million to continue central spine road project from Raub to Bentong.

• RM5 billion for the west coast coastal highway from Banting to Taiping.

• Government to expedite MRT3 project by two years from 2027 to 2025.

• RM32 billion for MRT2 project (Sg Buloh-Serdang-Putrajaya).

• RM110 million to provide alternative road to Port Klang.

Tourism

• RM30 million to be allocated to the Malaysian Healthcare Travel Council to boost medical tourism.

• RM500 million for the promotion and development of tourism.

• RM1 billion to tourism infrastructure development fund.

• RM2 billion fund for SMEs in tourism.

Agriculture

• RM200 monthly for a duration of 3 months for padi farmers while waiting to harvest their crops, which amounts to RM150 million.

• RM200 million for rubber replanting, RM140 million for development, re-planting and promotion of oil palm.

• Almost RM500 million to improve agriculture infrastructure.

• RM2.3 billion in incentives and assistance for the agriculture community.

• RM6.5 billion allocated to the smallholders, farming and fishing communities.

Other Highlights

• RM100 million with a 70% government-guaranteed loan for the furniture export industry.

• RM200 million allocated for training programmes, grants and SME easy loans under SME Corp; and close to RM82 million for halal products and industry development.

• RM2 billion set aside for 70% government-guaranteed loans.

• RM5 billion allocated for start-up capital for businesses.

• RM7 billion allocated to Skim Jaminan Pembiayaan Perniagaan.

• SMEs expected to contribute 41% of GDP by 2020.

• Private sector investment is expected to reach RM260 billion by 2018 and will be the engine of growth.

• Total investments in the country is expected to increase by 6.7% contributing to 25.5% to the GDP for 2018.

• RM26.34 billion for economic sector; RM11.72 billion for the social sector; RM5.22 billion for the security sector; RM2.72 billion for general administration sector.

• Administration budget is RM119.82 billion; other expenditure is RM1.08 billion; asset procurement is RM577 million.

• For 2018, federal government is expected to collect RM239.86 billion in revenue.

• Allocation for Budget 2018 is RM280.25 billion, an increase of over RM20 billion.

• B40 household income has increased to RM3,000 per month from RM2,629 for the period 2014-2016.

• Monthly median income has increased from RM4,585 in 2014 to RM5,288 in 2016.

• Current per capita income stands at RM40,713, expected to reach RM42,777 by 2018.

• Our international reserves now stand at US$101.4 billion.

• In August, exports hit a high of RM80 billion, recording double-digit growth.

• 69% or 2.26 million new jobs created so far from the target 3.3 million to be created by 2020.

• 3 international credit rating agencies have reaffirmed our A-rating with stable prospects.

• Looking at 2009, our fiscal deficit was at 6.7% of the GDP and is expected to decrease to 3% in 2017 and 2.8% in 2018.

• Actual private investment for 2016 is over RM211 billion.

• Government projection growth of between 5.2% to 5.7% for 2017, higher than the projection in March of between 4.3% and 4.8%.

• Projected GDP increase from 4.9% to 5.2% for 2017.

• The country has had a growth rate of 5.7% in the first half of 2017.

Source: Free Malaysia Today

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Malaysia’s Budget 2017 Highlights

Bloated civil sevice in Malaysia must cut down the size and salaries

Huge Civil Service Size, Attractive Emoluments and Benefits are costing Malaysia !

Call on the Government to downsize the country’s bloated civil service

Supersized and overweight civil servants

Political parties banking on votes from the civil servants, the sacrosanct!

Malaysia world’s No.1 highest civil servants-to-population ratio! Its tenure of
service legally vulnerable but notoriously difficult to dismiss!

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JPMorgan CEO warns he will fire any employee trading Bitcoin for being “stupid.”


 
Tough stand: Dimon has warned that he will fire JPMorgan traders who traded in bitcoin ‘in a second. For two reasons: It’s against our rules, and they’re stupid. And both are dangerous.’ — AFP

NEW YORK: JPMorgan Chase & Co chief executive officer Jamie Dimon said he will fire any employee trading bitcoin for being “stupid.”

The cryptocurrency “won’t end well,” he told an investor conference in New York on Tuesday, predicting it will eventually blow up. “It’s a fraud” and “worse than tulip bulbs.”

If a JPMorgan trader began trading in bitcoin, he said: “I’d fire them in a second. For two reasons: It’s against our rules, and they’re stupid. And both are dangerous.”

Bitcoin has soared in recent months, spurred by greater acceptance of the blockchain technology that underpins the exchange method and optimism that faster transaction times will encourage broader use of the cryptocurrency.

Prices have climbed more than four-fold this year – a run that has drawn debate over whether that’s a bubble.

Bitcoin initially slipped after Dimon’s remarks. It was down as much as 2.7% before recovering.

Last week, it slumped after reports that China plans to ban trading of virtual currencies on domestic exchanges, dealing another blow to the US$150bil cryptocurrency market.

Tulips are a reference to the mania that swept Holland in the 17th century, with speculators driving up prices of virtually worthless tulip bulbs to exorbitant levels.

That didn’t end well.

In bitcoin’s case, Dimon said he’s sceptical authorities will allow a currency to exist without state oversight, especially if something goes wrong.

“Someone’s going to get killed and then the government’s going to come down,” he said.

“You just saw in China, governments like to control their money supply.”

Dimon differentiated between the bitcoin currency and the underlying blockchain technology, which he said can be useful.

Still, he said banks’ application of blockchain “won’t be overnight.”

The bank chief said he wouldn’t short bitcoin because there’s no telling how high it will go before it collapses.

The best argument he’s heard, he said, is that it can be useful to people in places with no other options – so long as the supply of coins doesn’t surge.

“If you were in Venezuela or Ecuador or North Korea or a bunch of parts like that, or if you were a drug dealer, a murderer, stuff like that, you are better off doing it in bitcoin than US dollars,” he said.

“So there may be a market for that, but it’d be a limited market.”— Bloomberg

 

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Too good to be true? Think twice


 

HAVE you ever grabbed an offer without any hesitation, simply because the price is too cheap to resist?

Many of us have this experience especially during sales or promotional campaigns. We tend to spend more at the end or buy things which we are uncertain of their quality when the deal seems too good to say no.

It may be harmless if the amount involved is insignificant. However, when we apply the same approach to big ticket items, it can cause vast implications.

Recently, I heard a case which reinforces this belief.

A friend shared that a property project which was selling for RM300,000 a few years ago is now stuck. Although the whole project was sold out, the developer has problem delivering the units on time.

The developer is calling all purchasers to renegotiate the liquidated and ascertained damages (LAD), a compensation for late delivery.

One of the homeowners said he is owed RM50,000 of LAD, which means the project is 1½ years late. When we chatted, we found that he purchased the unit solely due to its cheap pricing without doing much research in the first place.

The incident is a real-life example of paying too low for an item which can leave us as losers, especially when it involves huge sum of investment, such as property.

To many, buying a house maybe a once-in-a-lifetime experience, a decision made can make or break the happiness of a family.

A good decision ensures a roof over the head and a great living environment, while an imprudent move may incur long-term financial woes if the house is left uncompleted.

Nowadays, it is common to see people do research when they plan to buy a phone, household item, or other smaller ticket items.

Looking at the amount involved and implication of buying a house, we should apply the same discretion if not more.

It is always important for house buyers to study the background of a developer and project, consult experienced homeowners regarding the good and bad of a project before committing.

I have seen many people buy a house merely based on price consideration.

In fact, there are more to be deliberated when we commit for a roof over our heads. The location, project type, reputation of a developer, the workmanship, the future maintenance of the property etc, are all important factors for a good decision as they would affect the future value of a project.

Beware when a discount or a rebate sounds too good to be true, it may be just too good to be true and never materialised. If the collection or revenue of a housing project is not sufficient to fund the building cost, the developer may not be able to complete the project or deliver the house as per promised terms. At the end of the day, the “price” paid by homeowners would be far more expensive.

In general, the same principle applies elsewhere. It is a known fact that when we pay a premium for a quality product from a reliable producer, we have a peace of mind that the product could last longer and end up saving us money. Some lucky ones will end up gaining much more.

For instance, when we purchase a car, we should consider its resale value as some cars hold up well, while others collapse after a short period. Other determining factors include the specifications of the car, the after sales service, and the availability of spare parts.

Quality products always come with a higher price tag due to the research, effort, materials and services involved.

In addition to buying a house or big ticket items, other incidents that can tantamount to losing huge sums are like money games, get-rich-quick scheme, or the purchase of stolen cars or houses with caveats.

When an offer or a rebate sounds dodgy, the “good deal” can be a scam.

Years of experience tells me that when what is too good to be true, we should think twice. I always remind myself with a quote from John Ruskin (1819-1900) who was an art critic, an artist, an architect and a philosopher. “It’s unwise to pay too much, but it’s worse to pay too little. When you pay too much, you lose a little money – that’s all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing it was bought to do.

“The common law of business balance prohibits paying a little and getting a lot – it can’t be done. If you deal with the lowest bidder, it is well to add something for the risk you run, and if you do that you will have enough to pay for something better.”

Food for thought by Alan Tong

Datuk Alan Tong has over 50 years of experience in property development. He was the world president of FIABCI International for 2005/2006 and awarded the Property Man of the Year 2010 at FIABCI Malaysia Property Award. He is also the group chairman of Bukit Kiara Properties. For feedback, please email feedback@fiabci-asiapacific.com.

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Cars are more expensive than houses? A house can buy how many cars?
Our cars are costing us our homes!
Leaving a legacy by buying a house first before a luxury car … 
Malaysian income: bread and butter, affordability of owing a house
A challenging year ahead 
Can Malaysia’s household debt at 87.9% in 2014 be reduced to 54% ?
Rising tides of currencies globally cause inflation, money worthless! 
Bankers and lawyers should know better
8 million more houses needed in Malaysia 
Is having a car still a symbol of freedom? 
Malaysia needs to produce more houses to achieve 20/20 by 2020 

Malaysia must retool education, skills to adapt to knowledge economy


KUALA LUMPUR: Malaysia needs to reinvent its education system to adapt to the knowledge economy, which has led to a sharp reduction in unskilled jobs and spike in demand for data analysts.

Tan Sri Andrew Sheng, Distinguished Fellow of Asia Global Institute, University of Hong Kong, said Malaysia needs to retool its education and skills, and experiment across the spectrum, in positioning itself in the new economy.

“Formal education is outdated because of the speed of new knowledge. Companies do not spend on ‘on the job’ training, because of cost cuts and staff turnover,” he said during his presentation at the NCCIM Economic Forum 2017 yesterday.

Between 2007 and 2015, the loss of unskilled jobs was 55% relative to other jobs while demand for data analysts over the last five years has increased 372%.

In the global supply chain, old economy companies are quickly losing their edge as digitisation moves faster than physical goods while unskilled jobs will be quickly replaced by robotics due to the fast adoption of artificial intelligence (AI).

“Moving up the global value chain is about moving up knowledge intensity. If you don’t get smarter you won’t get the business.

“We are already plugged into the global value chain. We are very successful in that area but we cannot stay where we are. Remaining still is no longer an option. We need to move from tasks to value added growth to high value added production. In order to do that, we need to learn to learn.”

Sheng said the Malaysian economy is doing well but faces many challenges, including subdued energy prices, growing trade protectionism, geopolitical tensions and is still very reliant on foreign labour.

“Are we ready for the new economy? The way trade is growing is phenomenal but the new economy’s challenges are great and very complicated politically because technology is great for us as it gives us whatever we want but at the cost of our jobs,” he said.

When education fails to keep pace with technology, the result is inequality, populism and major political upheaval.

“What the new economy tells us is that robotics or AI (artificial intelligence) calls for Education 4.0, which means that we have to learn for life,” he said.

Sheng noted that Malaysia has successfully moved quietly into education services, medical tourism, higher quality foods, all through upgrading skills, branding and marketing.

“But formal education has become bureaucratised, whereas we are not spending enough on upgrading our labour force, prefering to hire imported labour,” he said.

Although Malaysia cannot compete in terms of scale and speed, especially against giants such as China, it can compete in terms of scope with strength in diversity, soft skills and adaptability.

“We are winners … but have we got the mindset?” Sheng questioned.

He said Malaysia must upgrade its physical technology through research and development, harness its unique social technology and digitise its business model in order to create wealth.

While the government can help, he added, true success comes from community self-help irrespective of race or creed, and retired baby boomers who have wealth of experience must mentor the youth to start thinking about the new economy.

Eva Yeong, sunbiz@thesundaily.com
Related Links:

 Andrew Sheng – Institute for New Economic Thinking

Andrew Sheng
is a distinguished fellow at Fung Global Institute, chief adviser …
member of Khazanah Nasional Berhad, the sovereign wealth fund of Malaysia.

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Bitcoin must not in your retirement financial planning portfolio


Bitcoin investments have undeniably become a trend among savvy investors in search of the golden goose, but one financial planner is against the use of it as part of the financial planning portfolio for retirement.

Max Growth Wealth Education Sdn Bhd managing director Nicholas Chu said one should not use bitcoin as part of the retirement portfolio and the public must be well aware of the risk in bitcoin trading before getting in.

“It is not asset-backed, it is very unsecure. It is, basically, you want to participate in the future changes. It’s not a proper financial planning way. It is just an experimental thing that you want to go through in this era, but it is not a proper investment product,” he told SunBiz.

“I definitely don’t agree if they use this for their financial planning. But for those who are able to try new ventures, they can go ahead provided they have extra money. If this doesn’t affect their existing financial planning, then I’ll leave it to them. We need to tell them the pros and cons of this investment. It’s up to the clients to do the final decision,” he said.

Chu cautioned on the uncertainties of bitcoin trading, which is driven by market forces.
“It is beyond anybody’s control, all the participants contribute to the bitcoin value. From that, I can say that there are a lot of uncertainties in the future,” he said.

Nonetheless, with the setting up of a few bitcoin exchanges, Chu noted that there will be demand and supply with tradeable markets available.

Bitcoin was the best-performing currency in 2015 and 2016, with a rise of 35.8% and 126.2% respectively.

Year to date, bitcoin prices have leaped more than three times. It stood at US$2,840 (RM12,140) as at 5pm last Friday.

Bitcoins are by the far the most popular cryptocurrency, which exists almost wholly in the digital realm and has no asset backing it. Bitcoin generation, known as mining, while open to anyone with a “mining application” on their computer, needs a great deal of computing power to solve complex algorithms which are later verified with the entire bitcoin network.

Colbert Low, founder of bitcoinmalaysia.com, said the recent spike in bitcoin prices could be partly due to the legalisation of bitcoin by the Japanese government.

He is unsure if the sharp rise in bitcoin prices will create a price bubble, but stressed that one cannot judge its price movement based on the “old economic theory”.

“This is a new economy based on a different model. It’s very hard to say,” Low opined, noting that there has been a growing number of retail outlets that accept bitcoin.

He foresees the usage of bitcoin propagating, especially in different types of payment methods.

However, Low opined that there will not be any “big movement” in the local market if the regulators do not regulate bitcoin.

“Our new Bank Negara governor is forward thinking and he is very much into fintech, technology and innovation. So there would definitely be improvement,” Low said.

The positive development of blockchain will be a catalyst for the growth of bitcoin, he added.

“Blockchain is a real thing that will change the way the IP system is architectured. We need to go down to a deeper level to see how blockchain can change the current problem and solve it.

“There are a lot of projects right now, over 500 companies are looking at this (blockchain) right now. Even IBM, HP and Microsoft are looking at it.”

Blockchain refers to distributed database that maintains a continuously growing list of records, called blocks, secure from tampering and revision. Bitcoin is just an application or software that runs on blockchain technology.

“If you look at blockchain technology, government agencies like the United Nations, the World Bank and the International Monetary Fund are looking at it. This is the best way to secure your data,” Low said, noting that the usage of bitcoin will help reduce operating cost.

Currently, there are about 16 million bitcoins in the market and the number is capped at 21 million.

Bank Negara has said that it does not regulate the cryptocurrency and advised the public to be cautious of the risks associated with the usage of such digital currency.

Source: By Lee Weng Khuen sunbiz@thesundaily.com

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