Court to rule on ‘violation’ motion ahead of CM corruption trial
GEORGE TOWN: The High Court here will rule on March 7 whether Section 62 of the Malaysian Anti-Corruption Commission Act 2009 is in violation of the Federal Constitution.
Chief Minister Lim Guan Eng and businesswoman Phang Li Khoon want Section 62 to be declared unconstitutional as they claim it is against the tenet of “considered innocent unless proven guilty.”
Penang High Court judge Datuk Hadhariah Syed Ismail set the date after the defence and prosecution made their arguments.
Lim and Phang are facing charges under the MACC Act in relation to the sale and purchase of a bungalow in 2014 and separately filed the motion to declare Section 62 a violation of the Federal Constitution in early January.
Phang’s counsel Datuk V. Sithambaram said Section 62 must be struck down as “it is contrary to a right to fair trial and is in violation of the fundamental rights of the accused.”
He argued that the section infringes the accused’s constitutional right under Article 5(1) and Article 8(1) of the Federal Constitution.
“Section 62 of the MACC Act requires the defence’s statement and documents, which would be tendered as evidence, to be delivered to the prosecution before the start of trial.
“However, the right of an accused to be presumed innocent and right to silence are encapsulated in the Federal Constitution.
“Article 5(1) declares that no person shall be deprived of life or liberty save in accordance with law and Article 8(1) dictates that all persons are equal before the law and entitled to the equal protection of the law.
“The court has not called for defence and yet the prosecution is asking for the statement of defence, even before the court decides. This is against the presumption of innocence,” he told the court yesterday.
Gobind Singh, acting for Lim, said the provision favours the prosecution and discriminates against the rights of the accused.
He argued that Section 62 restricted the defence of the accused person by excluding the right of an accused to expand his defence further and produce further documents at the trial.
“It is against the provisions of equality under Article 8 of the Federal Constitution.
He also said the accused could be subjected to criminal consequences under Section 68 of the MACC Act for failing to comply with the Act’s provisions and be penalised under Section 69 of the MACC Act.
DPP Masri Mohd Daud said Section 62 of the MACC Act is not discriminatory and is procedural and a general provision.
“The Act does not stop the defence from making further submissions other than those which had been submitted,” said Masry.
“The arguments that Section 62 contradicts Article 5 of the Con-stitution is far-fetched! Article 5 refers to, among others, the rights to consult a lawyer and the rights to be informed of the grounds for an arrest.”
On June 30, last year, Lim was charged with obtaining gratification for himself and his wife Betty Chew by approving the conversion of two lots of agricultural land belonging to Magnificent Emblem into residential development while chairing a state Planning Committee meeting on July 18, 2014.
The offence under Section 23 of the Malaysian Anti-Corruption Commission Act, carries a jail term of up to 20 years and a fine of at least five times the value of gratification or RM10,000, whichever is higher.
He faces another charge under Section 165 of the Penal Code for using his position to obtain gratification by purchasing his bungalow in Pinhorn Road from Phang at RM2.8mil, below the market value of RM4.27mil, on July 28, 2015. The offence is punishable by a maximum of two years in jail or a fine, or both.
Phang, who is charged with abetment, faces up to two years in jail or a fine, or both.
Both Lim and Phang have pleaded not guilty. Their cases will be jointly heard between March and July.
Phang is respresented by Sithambaram, Hisyam Teh Poh Teik and A. Ruebankumar, while Lim by Gobind, Ramkarpal Singh Deo, R.S.N Rayer and Terence Naidu.
By Chong Kah Yuan The Star/Asia News Network
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Stepping down: Dr Lim giving a speech at the council meeting at City Hall, Penang. Dr. Lim tells why he walked GEORGE TOWN: The only
GEORGE TOWN: Penang has acknowledged that nine out of 29 hill clearing cases on the island, as reported by Penang Forum , were illegal.
Penang Forum representative Rexy Prakash Chacko said state Local Government Committee chairman Chow Kon Yeow and Penang Island City Council (MBPP) had a discussion with them last week.
This came about after the forum’s first Penang Hills Watch (PHW) report on hill clearing cases was submitted to the state on Jan 2.
“They investigated the report and concluded that only nine were illegal clearing activities while the rest were legally permitted land works (14) and natural slope failure (one). The other five cases are still being investigated by the relevant departments.
“The illegal clearing cases have been issued with stop work orders or are being followed up by court action,” he said on Saturday.
Chacko commended Penang’s concern and transparency in responding to the PHW report.
He urged for close monitoring on the nine illegal clearing cases and for mitigation action to be taken to rehabilitate the areas if necessary.
“For those with permits, the forum hopes that the clearing will strictly adhere to the state laws on land works and drainage.”
Chow, when met at Datuk Keramat assemblyman Jagdeep Singh Deo’s CNY open house in Taman Free School, said he had discussed with Penang Forum members about the report and answered their queries.
The public can view the PHW report as well as the response from the state government at the Penang Hills Watch Facebook page (@PenangHillsWatch) or the Penang Forum website, and see them interactively on a map at the Penang Hills Watch page.
PHW, a citizen-oriented initiative to provide a platform to monitor activities affecting the hills of Penang, was launched in October last year by Penang Forum, a loose coalition of non-political civil society groups often critical of the state government’s plans and policies. – The Star
Jan 28, 2016 … PENANG’S drainage system is unable to cope with heavy rain falling within a
short ….. Penang Forum concerns over hill clearing and flood.
GEORGE TOWN: The only city councillor here who dared to go against the state government does not want to continue after his term ends on New Year’s Eve because he is disappointed with the Penang Island City Council (MBPP).
Dr Lim Mah Hui (pic) said he no longer wanted to serve because “the change in Penang that we want doesn’t seem to be happening”.
“I will remain active as a Penang Forum committee member. I will still speak up on public issues.
“I believe people in public offices should serve for limited terms. Perhaps it will take a fresher mind with new ideas and approaches to make things happen for the better,” he said.
Dr Lim, who has served as a councillor since 2011, also believed that the council should allow the public to observe council committee meetings.
“The committee meetings are where decisions are made. If people are watching the deliberations, then public scrutiny can help temper political interests,” he added.
The press and the public are allowed to witness full council meetings, but Dr Lim said these were formal meetings to confirm matters that had been decided upon.
Dr Lim is the sole city councillor out of 24 with no political ties. A former professor and international banker, he was nominated to MBPP by Penang Forum, a loose coalition of numerous NGOs in the state.
His appointment stemmed from the current government’s 2008 move to swear in councillors representing NGOs. Four such councillors were initially appointed but since 2012, although the official NGO councillors still stand at four, only Dr Lim is known to come strictly from civil society.
He made his maverick nature clear less than a year after being a councillor when he joined a group of 30 people to publicly protest against his own council outside City Hall months after being appointed.
In March this year, he was involved in a heated exchange with Chief Minister Lim Guan Eng during an NGO dialogue session over parking woes, road-widening projects and the council enforcement’s car-towing figures.
In July, Dr Lim criticised the state’s Penang Transport Master Plan (PTMP) and suggested an alternative better, cheaper, faster transport master plan.
A month before that, he sent a letter to Unesco expressing fears that the PTMP would jeopardise George Town’s World Heritage Site status.
Throughout his tenure in MBPP, Dr Lim has been called a liar, back-stabber and betrayer of the state government by local politicians. NGO members, however, hold him in high regard.
“Nobody can live up to Mah Hui’s standard as an example of integrity and representing public interest without fear or favour.
“He had been talking about stepping down for some time.
“Maybe he needs to take a break and we hope he will accept the post again,” said fellow Penang Forum member Khoo Salma Nasution, whom the group has nominated to take Dr Lim’s place.
Former DAP member Roger Teoh, who was initially at loggerheads with Dr Lim over the PTMP, said it was a shame that local politicians had painted him in a negative light.
“Something was not right about how the state was reacting to Dr Lim’s Unesco letter. I felt he was unfairly labelled as treasonous. If his concerns were heard internally, would he have needed to write to Unesco?” he asked.
Teoh had initially supported the PTMP and openly criticised Dr Lim.
He changed his stand after doing a Masters thesis research on car use in 100 cities around the world, which led him to resign from DAP recently.
Sources: Arnold Loh The Star/Asian News Network
“I have declined to be nominated for the reappointment as a councillor next year. I have served six years.
“I think I have served long enough and we need new blood and new people to take up the cause,” he said at the council’s monthly meeting yesterday.
He later told a press conference that Penang Forum suggested Khoo Salma Nasution, the forum’s steering committee member and Penang Heritage Trust vice-president, as his replacement.
“We have nominated Khoo as the representative for Penang Forum and NGOs. We will have to wait for the state executive council to decide on the nominations.
“Nobody told me to step down. It was my own decision. Penang Forum wanted me to continue but I told them I had done more than my share.
“I will remain in the Penang Transport Council,” he said.
Dr Lim, however, said he would continue to be vocal and speak out.
He urged the Penang Island City Council to open its meetings to the public to promote greater transparency and participation.
“Section 23 of the Local Govern-ment Act 1976 gives the local council the power to do so.
“Members of the public can also be invited to sit in, possibly as observers, at the council’s committee and sub-committee meetings where decisions are made.
“This is the challenge I put forward. If they are truly taking about change and a new type of government, then they should do that,” said Dr Lim.
Dr Lim has raised various concerns during his stint as a councillor and forum member on issues related to hill clearing, land reclamation, heritage conservation and the proposed Penang Transport Master Plan. – The Star
GEORGE TOWN, March 16 — Developers in Penang no longer fear flouting the law as the authorities seem to be “toothless” in taking punitive actions, an activist group claimed.
Referring to the latest hill-clearing incident on Bukit Gambir and similar past incidents, Penang Citizens Awareness Chant Group (CHANT) coordinator Yan Lee said the developers knew they could easily get away with illegal earthworks or structural demolitions.
This was because the state government and the municipal council were not prepared to take stern punitive action against them, he said in a text message yesterday.
The council has come under fire in the past few days after a developer defied a stop-work order to carry out earthworks on the hill slope of Bukit Gambir in Gelugor.
CHANT cited the demolition of the 19th century Khaw Sim Bee Mansion and illegal hilltop clearing of Bukit Relau, commonly referred to as “Botak Hill”, as examples of the developers’ fearlessness.
Yan Lee claimed that the developers were fearless because they knew a contribution to the state heritage fund (SHF) “can do magic”.
A check by Malay Mail yesterday showed the developer had stopped work for two days on the hill slope, located behind the Gambier Heights apartments.
The council had issued the stop-work order on Thursday.
The hill was cleared to build a temporary 500m-long access road and fencing for a housing project site on the hill slope.
Trees were chopped down to make way for the road, while a lorry and an excavator were parked at the construction site.
According to some residents, the earthworks began early this month.
The residents also complained of pollution caused by dust, and noise caused by the frequent movement of vehicles.
Traffic management and flood mitigation committee chairman Chow Kon Yeow called on the council to take stern action against the developer for “jumping the gun”.
He said the developer should have waited for the council to issue a commencement of work certificate.
Sahabat Alam Malaysia urged the state authorities to stop the developer from clearing the hill, and to implement firm policies to protect the hills and greenery in the state.
It warned against a repeat of the “Botak Hill” incident.
An MPPP councillor also said the developers had no respect for the authorities.
“Even if the council were to haul them up for violating the law, they know they will get away with a token fine,” the councillor, who asked not to be named, said.
He cited a previous case where a developer completed a housing project despite the case for carrying out illegal earthworks pending in court.
Sources: Athi Shanka, MalayMail online
“First of all, the Malaysian Anti-Corruption Commission (MACC) can only compel someone to declare his assets. Once the assets are d…
In a world facing challenges and uncertainties, embrace opportunities for success through innovation.
“I went looking for my dreams outside of myself and discovered, it’s not what the world holds for you, it’s what you bring to it. –Anne Shirley”
THE world is currently at a paradox. Tensions and uncertainty for the future are rising in times of prevailing peace and prosperity. While changes are taking place at an incredibly fast speed, such changes are presenting unprecedented opportunities to those who are willing to innovate.
Recently, most global currencies had weakened against the US dollar (USD). This may give rise to some concern, but it is worth placing in proper perspective that most countries would trade with a few countries instead of just one. Furthermore, we are living in a world with low economic growth, increased mobility and rapid urbanisation.
In such a global landscape, it is important to embrace change and innovation in a courageous way to shape a better future. In L.M. Montgomery’s Anne of Green Gables, Anne Shirley said, “I went looking for my dreams outside of myself and discovered, it’s not what the world holds for you, it’s what you bring to it.”
Paradox, change and opportunity
In the World Economic Forum Global Competitiveness Report 2016-2017, World Economic Forum head of the centre for the global agenda and member of the managing board Richard Samans stated that at a time of rising income inequality, mounting social and political tensions and a general feeling of uncertainty about the future, growth remains persistently low.
Commodity prices have fallen, as has trade; external imbalances are increasing and government finances are stressed.
However, it also comes during one of the most prosperous and peaceful times in recorded history, with less disease, poverty and violence than ever before. Against this backdrop of seeming contradictions, the Fourth Industrial Revolution brings both unprecedented opportunity and an accelerated speed of change.
Creating the conditions necessary to reignite growth could not be more urgent. Incentivising innovation is especially important for finding new growth engines, but laying the foundations for long-term, sustainable growth requires working on all factors and institutions identified in the Global Competitiveness Index.
Leveraging the opportunities of the Fourth Industrial Revolution will require not only businesses willing and able to innovate, but also sound institutions, both public and private; basic infrastructure, health and education, macroeconomic stability and well-functioning labour, financial and human capital markets.
World Economic Forum editor Klaus Schwab stated in The Fourth Industrial Revolution that we are at the beginning of a global transformation that is characterised by the convergence of digital, physical and biological technologies in ways that are changing both the world around us and our very idea of what it means to be human. The changes are historic in terms of their size, speed and scope.
This transformation – the Fourth Industrial Revolution – is not defined by any particular set of emerging technologies themselves, but by the transition to new systems that are being built on the infrastructure of the digital revolution. As these individual technologies become ubiquitous, they will fundamentally alter the way we produce, consume, communicate, move, generate energy and interact with one another.
Given the new powers in genetic engineering and neurotechnology, they may directly impact who we are, and how we think and behave. The fundamental and global nature of this revolution also pose new threats related to the disruptions it may cause, affecting labour markets and the future of work, income inequality and geopolitical security, as well as social value systems and ethical frameworks.
A dollar story
When set in a global landscape where there is uncertainty for the future, when compared to other countries, Malaysia’s economy is performing quite well.
ForexTime vice president of market research Jameel Ahmad said, “When you combine what is happening on a global level, the Malaysian economy is in quite an envious position.”
For 2016, the USD has moved to levels not seen in over 12 years. The dollar index is trading above 100. This was previously seen as a psychological top for USD.
The Malaysian ringgit (MYR) is not alone in the devaluation of its currency. All of the emerging market currencies have been affected in recent weeks.
Similarly, the British £(GBP) has lost 30% this year, falling from US$1.50 to US$1.25 per GBP. The Euro (EUR) has fallen from US$1.15 to US$1.05 in three weeks.
The China Yuan Renmenbi (CNY) is hitting repeated historic lows against the USD. The CNY is only down around 5%.
Jameel believes that the outlook for the USD will be further strengthened. While the dollar was already expected to maintain demand due to the consistent nature of US economic data, the levels of fiscal stimulus that US Presidentelect Donald Trump is aiming to deliver to the US economy will encourage borrowing rates to go up.
This means that it is now more likely than ever that the Federal Reserve will need to accelerate its cycle of monetary policy normalisation (interest rate rises).
Most were expecting higher interest rates in 2017. Trump has also publicly encouraged stronger interest rates. However, when considered that Trump is also promising heavy levels of fiscal stimulus, there is a justified need for higher interest rates, otherwise inflation in the United States will be at risk of getting out of control.
The probability for further gains in the USD due to the availability of higher yields from increased interest rates will mean further pressure to the emerging market currencies.
With populism resulting in victories in both the United States’ presidential election and the EU referendum in the United Kingdom in 2016, attention should be given to the real political issues in Europe and the upcoming political elections in 2017, such as those in Germany and France.
Jameel said, “Until recently, political instability was only associated with developing economies. We are now experiencing a strong emergence across the developed markets. This might lure investors towards keeping their capital within the emerging markets longer. Only time will tell.”
In Malaysia’s case, the economy is still performing at robust levels, despite slowing headline growth. Growth rates in Malaysia are still seen as significantly stronger than those in the developed world.
There are going to be challenges from a stronger USD and other risks such as slowing trade, but the emerging markets are still recording stronger growth rates than the developed world.
Adapting to creative destruction
In a world where changes are taking place rapidly, the ability to adapt to changes plays an important role in encouraging innovation and growth. Global cities are achieving rapid growth by attracting the talented, high value workers that all companies, across industries, want to recruit.
In an era where 490 million people around the world reside in countries with negative interest rates, over 60% of the world’s citizens now own a smartphone and an estimated four billion people live in cities, which is an increase of 23% compared to 10 years ago, these three key trends are shaping our times.
Knight Frank head of commercial John Snow and Newmark Grubb Knight Frank president James D. Kuhn shared that the era of low to negative interest rates has reduced investors’ expectations on what constitutes an acceptable return. The financial roller coaster ride that led to this situation has made safe haven assets highly sought after.
A volatile economy has not stopped an avalanche of technological innovation. Smartphones, tablets, Wi-Fi and 4G have revolutionised the spread of information, increased our ability to work on the move, and led to a flourishing of entrepreneurship.
Fast-growing cities are taking centre stage in the innovation economy and in most of the global cities, supply is not keeping pace with demand for both commercial and residential real estate.
Consequently, tech and creative firms are increasingly relying upon pre-let deals to accommodate growth, while their young workers struggle to find affordable homes.
As the urban economy becomes increasingly people-centric, regardless of a city being driven by finance, aerospace, commodities, defence or manufacturing, the most important asset is a large pool of educated and creative workers.
Consequently, real estate is increasingly a business that seeks to build an environment that attracts and retains such people.
Knight Frank chief economist and editor of global cities James Roberts said, “We are moving into an era where creative people are a highly prized commodity. Cities will thrive or sink on their ability to attract this key demographic.
“A characteristic of the global economy in the last decade has been the phenomenon of stagnation and indeed decline, occurring alongside innovation and success. If you were invested in the right places and technologies, the last decade has been a great time to make money; yet at the same time, some people have lost fortunes.
“The locations that have performed best in this unpredictable environment have generally hosted the creative and technology industries that lead the digital revolution, and disrupt established markets.” The rise of aeroplanes, automobiles and petroleum created economic booms in the cities that led the tech revolution of the 1920s and 30s. Yet elsewhere, recession descended on locations with the industries that lost market share to those new technologies like ship building, train manufacturing and coal mining.
In a world where abundant economic opportunities in one region live alongside stagnation elsewhere, it is not easy to reconcile the fact that countries that were booming just a few years ago on rising commodity prices are now adapting to slower growth.
Just as surprising are Western cities that are now thriving as innovation centres, when they were dismissed as busted flushes in 2009 due to their high exposure to financial centres.
Roberts said, “This is creative destruction at work in the modern context. The important lesson for today’s property investor or occupier of business space, is to ensure you are on-the ground where the ‘creation’ is occurring and have limited exposure to the ‘destruction’. This is not easy, as the pace of technological change is accelerating at a speed where the old finds itself overtaken by the new.
“However, real estate in the global cities arguably offers a hedged bet against this uncertainty due to the nature of the modern urban economy, where those facing destruction, quickly reposition towards the next wave of creation.”
The industries that drive the modern global city are not dependent upon machinery or commodities but people, who deliver economic flexibility.
A locomotive plant cannot easily retool to make electric cars, raising a shortcoming of the single industry factory town. Similarly, an oil field in Venezuela has limited value for any other commercial activity.
However, a modern office building in a global city like Paris can quickly move from accommodating bankers in rows of desks to techies in flexible work space. Therefore, there is adaptability in the people in a service economy city which is matched by the city’s real estate.
In the people-driven global cities, a new industry can redeploy the ‘infantry’ from a fading industry via recruitment. Similarly, the professional and business service companies that served the banks, now serve a new clientele of digital firms.
In contrast, manufacturing or commodity-driven economies face greater barriers when reinventing themselves.
Today, landlords across the world struggle with how to judge the covenants of firms who have not been in existence long enough to have three years of accounts, but are clearly the future.
Consequently, both landlord and tenant need to approach real estate deals with flexibility. Landlords will need to give ground on lease term and financial track record, and occupiers must compensate the landlord for the increased risk via a higher rent.
Another big challenge for the Western global cities will be competition from emerging market cities that succeed in repositioning themselves away from manufacturing, and towards creative services. The process has started, with Shanghai now seeing a rapid expansion of its tech and creative industries.
The big Western centres still lead in services, but the challenge from emerging markets cities did not end with the commodities rout. They are just experiencing creative destruction and will emerge stronger to present a new challenge to the West.
From Mak Kum Shi The Star/ANN
Mar 5, 2016 … Modern finance and money being managed like a Ponzi scheme! Economic Collapse soon? Ponzi schemes and modern finance. Andrew…
KUALA LUMPUR: Structural failure possibly caused the collapse of an under-construction pedestrian bridge at KL Eco City near Kampung Haji Abdullah Hukum here.
Department of Occupational Safety and Health (DOSH) director-general Datuk Mohtar Musri said the initial investigation suggested that a defective structure could have led to the disaster on Wednesday.
He said the department would refer to the Construction Industry Development Board (CIDB) and Kuala Lumpur City Hall regarding the quality of materials used in the construction of the bridge.
Works Minister Datuk Seri Fadillah Yusof said a task force has been set up to probe the incident.
He said the result of the investigation was expected to be made public in a month, and that tough action could be taken against the developer if it was found to have flouted safety regulations.
“We can bring them to court, not just under DOSH but CIDB too. Under the CIDB Malaysia Act 1994, they can face a RM500,000 fine or a two-year jail sentence,” he said.
The RM7mil pedestrian bridge linking the planned KL Eco City project to the Gardens Shopping Mall in Mid Valley, which was still under construction, collapsed and killed one worker and injured five others on Wednesday.
The search-and-rescue operation at the site of the incident was halted after it was confirmed that there was no worker trapped underneath the mangled brick-and-iron structure.
City Fire and Rescue Department deputy operations chief Ruhisha Haris said K-9 teams had confirmed that there were no signs of a body.
However, the mystery of the missing construction worker remains.
“We first received information that a worker might have been trapped because a colleague saw him under the bridge minutes before it collapsed.
“A head count by the developer also revealed a missing worker, but they were unable to give us a name,” he said.
The dead victim has been identified as Tran Xuan Vang, 21, from Vietnam. Two other Vietnamese, Tran Van Hai and Luong Van Guyet, as well as Indonesian Nor Syamsi, Bangladeshi MD Jashim and Pakistan national Rais Aman Majid were injured and are currently being treated at Universiti Malaya Medical Centre.
Medical staff were forced to amputate Rais’ left leg on site to save his life.
In a statement issued on the day of the incident, SP Setia, the developer of the project, said it deeply regretted the incident and was working with the authorities in the investigation.
“The project team is still assessing the situation,” it said.
Work on the KL Eco City project – a mixed development comprising three residential towers, one serviced apartments tower, three corporate office towers, 12 boutique office blocks and one retail podium – started in 2011 and is scheduled to be fully completed by 2023.
Commenting on the incident, National Institute of Occupational Safety and Health chairman Tan Sri Lee Lam Thye said the time had come for players in the construction industry to practise their commitment to safety.
“All these accidents are preventable if the person in charge puts into practice good occupational and safety health measures and the site safety supervisor makes sure work is done properly,” he said.
By M. kumar and Nicholas Cheng The Star/Asian News Network
THE Consumers’ Association of Penang (CAP) is horrified with the news of the collapse of the incomplete pedestrian bridge meant to connect KL Eco City and Mid Valley Megamall in Bangsar, Kuala Lumpur.
Not even a month after a couple was crushed by a piling rig that fell on them at a construction site along Persiaran Astana, Klang, another tragic incident leading to serious injury and death has occurred.
If all the parties involved in the building industry – including the local councils, developers, contractors, architects, quantity surveyors, structural engineers, DOSH and all the others – had carried out their roles and functions efficiently, this could have been prevented.
Despite our repeated calls for the Government to conduct a full inquiry into the operations of the Department of Safety and Health (DOSH), it would seem like the relevant authorities are unable to comprehend the gravity of the situation.
When incidents like this happen, it becomes clear to us that DOSH and developers do not have their priorities right.
Instead of working on preventing such incidents, they wait until it happens before scrambling to take corrective measures to fix the problem.
The issue here is that there are no corrective measures that can be taken once a life is lost; that is not something that can be recovered.
Universiti Sains Malaysia’s (USM) Professor Datuk Dr Mahyuddin Ramli has been reported saying that incidents of this nature can happen when contractors do not comply with safety standards.
In this case, he said that concrete takes at least a week to dry and harden; the wet weather we have been experiencing means it will take even longer.
The USM professor also said that another way something like this can happen is if contractors do not use proper scaffolding during the construction process.
The distance between scaffolds and the size of the scaffolds used are very important as they will vary according to the structure they are meant to hold up.
DOSH’s director-general, Datuk Mohtar Musri, has stated that their initial investigation suggested that the incident happened because the structure was defective.
He said that they need to look into the quality of the materials that were used to construct the pedestrian bridge.
Whatever the cause, the relevant authorities and the public need to be aware that this is just history repeating itself.
If the incident did truly happen because of a structural defect, then it needs to be made clear that nobody can plead ignorance.
DOSH safety officers and onsite safety inspectors should have known about the structural defects if they did exist.
This begs the question of whether or not proper safety inspections were done at the appropriate stages by the relevant parties.
We ask that the results of the investigation into the latest incident be shared with the general public.
CAP would also like to know what happened to the findings from the investigation of previous incidents.
Why has this information not been shared with the public when their lives are also put in danger by the conduct of those at construction sites?
In view of this, CAP calls for penal action to be taken against all parties who have been involved in the project. They should all be held accountable even if they were not directly involved.
By S. M. MOHAMED IDRIS President Consumers Association of Penang
KUALA LUMPUR: A Vietnamese construction worker was killed and five others were injured when a 70m yet-to-be-completed bridge near Jalan Kampung Haji Abdullah Hukum and Mid Valley Megamall collapsed.
The victim was buried in the rubble of the collapsed pedestrian bridge.
As of press time, rescue workers were still searching for a Bangladeshi worker believed to be trapped in the rubble.
The authorities have since mobilised the K9 unit to locate him.
The firemen and paramedics were seen changing shift as the rescue mission continued into the night. Some were heard saying that locating the victim would be challenging.
However, all the rescuers were resolute in their attempt to find the last victim, never once giving up hope.
The five injured workers – two Vietnamese, two Bangladeshis and an Indonesian – were sent to the Universiti Malaya Medical Centre for treatment.
Brickfields OCPD Asst Comm Sharul Othman Mansor said the bridge was 80% completed when the incident occurred.
“We are still investigating the incident.
“We were alerted at about 4pm of the incident and quickly mobilised a search-and-rescue team,” he said at the scene.
Four roads were also affected by massive jams due to the incident.
According to Star Media Radio Traffic, the affected roads were the Federal Highway from the arch, the Kerinchi Link after the Pantai toll plaza, Kerinchi Intersection from Bangsar South or Pantai Medical Centre and Jalan Syed Putra from the Kuen Cheng School till the Robson Intersection.
While the main reason for the traffic congestion was due to certain road closures to make way for rescue workers, traffic was backed up near the mall due to many motorists slowing down to see the collapsed bridge.
Mall patrons, construction workers and curious onlookers were seen crowding the area near the bridge, where it was cordoned off for safety precautions.
By Farik Zolkepli, Jastin Ahmad Tarmizi, and Austin Camoens The Star/ANN
KUALA LUMPUR: The Government would like to take over the job of monitoring safety at construction sites away from developers following a string of deaths as a result of mishaps in the last three months.
Those duties, said Works Minister Datuk Seri Fadillah Yusof, may be entrusted to third party organisations that will be given autonomy in the planning, execution and supervision of workplace safety at construction sites.
Usually, these jobs are handled by contractors hired by the project developers but Fadillah said that this would mean the monitoring process was not independent.
Speaking at the launch of the Sustainable Construction Excellence Centre (Mampan), the minister said the suggestion for independent monitoring was brought up by the experts at the centre.
Mampan is headed by the Construction Research Institute of Malaysia (Cream), a subsidiary of the Government’s Construction Industry Development Board (CIDB).
Fadillah said the proposal to appoint third party safety monitors would be implemented first in Government construction projects.
He added that he hoped the private sector construction industry would do the same.
Currently, the Department of Occupational and Safety Hazard (DOSH) monitors government projects but it is reportedly too understaffed to keep track of every project.
For now we will have to make do with existing laws. This is why we need a commitment from the industry players,” he told reporters after the launch.
For now we will have to make do with existing laws. This is why we need a commitment from the industry players. Datuk Seri Fadillah Yusof
He said that Mampan would be a key organisation under the Government’s environmental sustainability initiative for its Construction Industry Transformation Programme.
The centre will undertake research with Universiti Teknologi Malaysia, Universiti Kebangsaan Malaysia, Universiti Sains Malaysia and the Rehda Institute to instil better industry practices, certification and awareness in the construction industry.
“We don’t want to build bridges that have no resilience and collapse when there is a flood.
“Our short-term goal is to position Malaysia as a regional leader in sustainability in construction and to raise the perception of sustainability in construction here,” he said.
Fadillah witnessed the signing of a Memorandum of Understanding between Cream chairman Tan Sri Dr Ahmad Tajuddin Ali and academics from the four universities and research institutes which will be a part of the new centre.
By NICHOLAS CHENG The Star/ANN
Global debt has jumped alarmingly to RM631tril and as capital flows out from developing countries, some are facing new debt crises.
DEBT worldwide has grown to unprecedentedly high levels and has to be brought down to prevent another financial crisis.
This was highlighted by the International Monetary Fund at its annual meeting in Washington last week.
Other problems facing the global economy include the stagnation in world trade, a decline in commodity prices and the reversal of capital flows to developing countries.
A recently released United Nations report has analysed the situation as a third phase in the global crisis that began with the United States in 2008, then spread in a second wave to Europe, and is now moving on to the developing countries.
The IMF said that world debt had reached US$152tril (RM631tril), a record level. It was 200% of the value of global gross domestic product in 2002, but has risen to 225% in 2015. The private sector holds two thirds of the total, but government debt has also risen fast, and the IMF warned about the risk of another financial crisis.
“Excessive private debt is a major headwind against global recovery and a risk to financial stability,” said Vitor Gaspar, IMF director of fiscal affairs. “Rapid increases in private debt often end up in financial crises.”
Most of this global debt is concentrated in developed countries. The huge jump there has been due to policies of easy money and low, zero or even negative interest rates, and especially to quantitative easing in which Central Banks bought bonds and pumped trillions of dollars into the banking system.
It was hoped that this massive infusion would cause the banks to increase lending to consumers and businesses and thus stimulate economic growth.
However, the real economy did not benefit much. Instead, most of the money went into the equity markets, boosting prices, and to the developing economies as investors searched for higher yield, and this helped to fuel the growth of their debt.
The debt of non-financial corporations in emerging economies jumped from US$9tril (RM37tril) at end-2008 to over US$25tril (RM104tril) by end-2015, or from 57% to 104% of their GDP.
Foreigners now own unprecedentedly high shares of bonds and equities in developing countries, which have become vulnerable to investor-mood swings and funds, resulting in financial crises.
When market sentiment or conditions change, the massive inflows can turn into equally large outflows. Indeed, the boom-bust cycle of capital flows has gone through many turns through the years.
Huge amounts left developing countries in the fourth quarter of 2015, and for that year as a whole there was a net outflow of US$656bil (RM2.7tril) or 2.7% of their Gross Domestic Product, according to the UN Conference on Trade and Development (UNCTAD).
This was a big change from a net inflow of 1.3% of GDP in 2013. This turnaround of 4.4% is much larger than the reversals of capital flows in 1981-83, 1996-98 and 2007-08.
But in recent months the cycle turned again, with the return of fund investors to emerging economies. For example, in Malaysia, after suffering large outflows in 2015, there have been net inflows of funds into the equity and bond markets in the past few months.
Going through these cycles, the debt of developing countries has grown. “Easy access to cheap credit in boom times has led to growing debt levels across the developing world,” says UNCTAD’s Trade and Development Report 2016.
Developing countries’ external debt rose from US$2.1tril (RM9tril) in 2000 to US$6.8tril (RM28tril) in 2015. Overall debt (foreign and domestic) jumped by over US$31tril (RM129tril) with total debt-to-GDP ratios reaching over 120% in many countries and over 200% in some others.
Now a nightmare scenario is emerging. For many countries, the tide is turning and access to cheap credit has begun to dry up. Says UNCTAD: “Against the backdrop of falling commodity prices and weakening growth in developed economies, borrowing costs have been driven up very quickly, turning what seemed reasonable debt burdens under favourable conditions into largely unsustainable debt.”
In some countries, the problem is compounded by currency devaluation (which increases the value of external debt) and lower commodity prices.
These countries are thus hit by multiple whammies – lower commodity prices and export earnings, net outflow of funds, devaluation (which causes their foreign debt to increase), a higher cost of servicing debt, and economic slowdown.
More and more low-income countries are in a downward economic spiral that has led them into a new debt crisis. They have had to turn to institutions like the IMF and World Bank for bailouts. UNCTAD lists Angola, Azerbaijan, Ghana, Kenya, Mozambique, Nigeria, Zambia and Zimbabwe as countries that have already asked for financial assistance or are in talks to do so.
This points to a shortfall in the international financial system – the lack of an orderly and fair debt mechanism which countries facing a debt crisis can have recourse to.
At the national level, the developed countries and some developing countries have corporate bankruptcy laws, aimed at helping companies to recover from a debt crisis through an orderly debt workout.
But there is no such debt workout mechanism, with fair burden sharing between debtor and creditors, when countries fall into a debt crisis.
In its absence, indebted countries often face many years of austerity and recessionary conditions imposed by the creditors and rescuing agencies, and with no guarantee that their debt level will even decrease.
With the present level of worldwide debt and the emergence of a new debt crisis in several countries, especially poor ones, it is time to consider smarter policies that prevent debt crises, and to manage them properly when they happen.
Martin Khor (email@example.com) is executive director of the South Centre. The views expressed here are entirely his own.
INTEREST rate is the price of money.
It sets the benchmark as it serves to oil the financial system’s engine, helping capital to flow freely and effectively in the global economy. Rates have been positive for the past three centuries despite world wars and the Great Depression. The system is not designed for a world of ultra-low, let alone negative rates.
The traditional business of banking, as we know it, is to take money from savers (in the form of deposits – representing banks’ liabilities) and lend it, at higher rates and over longer periods, to borrowers (investors, whose loans become their assets). Essentially, banks borrow short and lend long.
So the shape of the yield curve (chart of interest rates reflecting their term structure) is critical as it drives profits. The smaller the margin (gap) between short and long-term rates (i.e. the flatter the yield curve in economists’ jargon), the tighter banks’ profits are squeezed. The problem becomes even more difficult as interest rates or bond yields move near or to zero or worse, get negative.
Negative rates invert the norms of banking. Strangely, borrowers are paid for taking money, while savers pay to hand over their deposits. Banks already face resistance from depositors who won’t pay to save with them. Even as the return on their assets falls, banks find it hard to reduce the cost of their liabilities. When central banks impose rates on the reserves kept by banks with them – as is done at the European Central Bank (ECB) and Bank of Japan (BoJ) – it’s difficult for the banks to pass on this cost.
Indeed, negative rates act as a tax on bank profits. Banks also own government bonds, partly because regulators require them to keep a portfolio of liquid assets. Revenue here is a handy source of income. But as the older, high-yielding bonds mature, their replacements are now much lower yielding, thus eating into banks’ profits.
So banks look for other ways to re-coup, resorting to fees for services. Indeed, wealthy clients of private banking are starting to wake up to the impact of fees.
Insurance companies are also badly affected. They buy bonds to match assets with their long liabilities. But insurance companies in Germany and Switzerland are stuck with savings products they had sold in happier times, which guarantee returns well above current yields. A similar problem hit Japan in the 1990s and 2000s. Those with asset management arms have some protection, where returns are linked to the markets. But the impact of low returns is slowly but surely squeezing them too.
The underlying economic problem today remains inadequate global demand. In response, ECB has since stepped up its stimulus activities, joining BoJ and others in breaching the “zero lower bound” (inability of interest rates to get negative). So far, the impact on growth and employment has been dismal – simply because there is so much excess capacity worldwide.
Lower rates (even going negative) don’t appear to work. Lending has become more risky and banks today, as I see it, have neither the appetite nor enthusiasm to lend. Negative interest rates (NIRs) hurt banks’ balance sheets.
Other problems: NIRs (i) encourage investment in capital-intensive and disruptive technologies; (ii) perversely encourage savings – as fixed, interest-dependent income earners dampen consumption; (iii) curb a bank’s ability to lend; (iv) distort financial markets; and (v) shift portfolios to riskier assets in search of higher yields. In the longer run, NIRs compel businesses and individuals to disengage from a financial system that now taxes their saving.
Short-term rate and government bond yields represent the risk-free rate that forms the basis of return in finance. The expected return on equities comprises this risk-free rate plus a premium to allow for stock volatility and risk of capital loss. A good chunk of income of service providers is the “cut” they take. Today, there is simply much less return to go around.
Global trading in government bonds had exceeded US$10 trillion, a testament to just how hard central bankers are pushing yields down to spur households and businesses to spend. US 10-year Treasury now yields below 1.7%. Returns on comparable bonds in Germany and Japan are negative. Falling rates promise limited relief for consumers and businesses because inflation is falling too. For many in Europe and Japan, even record low rates don’t translate into easier borrowing terms on a real, or inflation adjusted, basis. For example, 10-year Japanese bonds return a -0.07%; but consumer prices fell 0.3%, yielding a +0.23% at 10 years, a key rate for most Japanese. NIRs don’t appear to have helped boost inflation in Europe either. The real case against NIRs is the folly of relying on monetary policy alone to rescue economies from depressed conditions.
Among Scandinavian nations, Denmark already has four years of NIRs. Its central bank benchmark rate now stands at -0.65% (mortgage rate, excluding fees, being at negative 0.0562%). Neighbour Sweden’s is -0.5% (below zero for 14 months). In Norway, rates can go negative to prop-up an economy hard hit by low oil prices. ECB and BoJ are using sub-zero rates to stimulate growth with little success.
Meanwhile, Switzerland, Sweden and Denmark are trying NIRs to keep their currencies in line with the struggling euro. Their experience points to concerns about undesirable side-effects, including: (i) savers pay the price of getting no interest; even so, bank profitability is squeezed; (ii) excessive investment in real estate; (iii) households gorging up mortgages they can’t afford to repay when rates rise or real estate values fall.
Sweden’s household debt to disposable income ratio is at an unsustainable 175% (90% in mid-1990s); and (iv) run to physical cash by savers. The flip-side points to success in keeping the currency in check, holding steady against the euro to protect euro-trade and competitiveness.
In Denmark, despite NIRs, private saving is rising (26% of GDP, against 21% before 2012 when rates were positive) to protect future purchasing power. But, investments fell (16% of GDP against 18.1% in 1990-2012). So, NIRs appear to be counterproductive. This chorus of discontent is spreading to other parts of Europe.
NIRs have pushed up savings and done little for corporate investment, while eviscerating pension plans. Politically, in Europe’s sclerotic economy, in the face of high unemployment (double the US rate) and an uncertain outlook, NIRs can be even more toxic, driving voters to support populist causes.
BoJ took radical measures for 3½ years to reflate the country’s sagging economy, resorting this January to NIRs. Yet growth and inflation remain elusive. Core-inflation is at minus 0.5%, far below BoJ’s 2% target. Prices today are still lower than they were in 1997. BoJ’s primary method to raise consumer expectations has been buying assets, mostly government bonds but also real estate and equities.
As a result, Japan’s monetary base tripled to US$4 trillion (80% of GDP). Investors’ patience is fraying. In a bold move to deepen the yield curve, BoJ on Sept 21: (i) capped the 10-year government bond rate at 0%, vowing to overshoot its 2% inflation target; and (ii) maintained its existing policy to purchase 80 trillion yen (US$78bil) of assets a year. Both these goals are incompatible. They pose a dilemma – in the event demand for government bonds collapses, BoJ will need to buy more and more to keep yields at zero. Similarly, strong demand may even make it unnecessary to buy any.
As I see it, the new approach is a sensible response to market realities. BoJ had conceded real difficulties in shifting price expectations towards the inflation target. Besides, the flattening yield curve is eating into banks’ profits.
By targeting its future purchases at the shorter-end (rather than buy longer bonds as now), BoJ is expected to tolerate a steeper yield curve. The yield cap should make NIRs more effective. Indeed, it allows BoJ to further test the bounds of its NIRs policy. In essence, the new approach shifts focus to interest rates, a retreat from the unpopular quantitative easing (QE). For investors, there is no longer a willing buyer. Instead, a price setter – adding uncertainty. Its pledge to overshoot the inflation target as soon as possible is designed to raise future price expectations more forcefully.
Whether BoJ can shake off deflation depends on whether domestic demand can revive to rekindle the still elusive price expectations. QE needs to be accompanied by more purposeful fiscal stimulus – including even a last ditch effort to issue “helicopter money” – to directly underwrite government spending by BoJ.
In search of yields
With NIRs, some of the world’s un-venturesome investors – the Japanese – are going abroad at an unprecedented rate this year: up to US$500bil being invested so far in foreign securities. For the risk taker, Venezuela bonds earned as much as 27% return over the past year. However, most prefer to just take “duration” risk: measured on when the investor gets his money back.
Longer bonds have higher duration risk – as do bonds with low coupons (more waiting time). Rule of thumb: 1 percentage point change in the rate changes the bond price equal to the duration. The price of 25-year bonds will jump 25% if rates fell by 1 percentage point; and falls 25% if rates rose 1 percentage point. As duration gets longer, risk mounts. For example: last year, 40-year Japanese bonds carried a 1.4% coupon. Rates have since turned negative; so the price rose by as much as 34%.
What then, are we to do
It is startling that the total volume of sovereign and corporate bonds with NIRs now exceeds one-half of all western debt. It’s equally amazing how investors continue to gobble up these bonds even though they are likely to get back less than what was invested.
Just as astonishing is the rising demand for cash – the world’s largest asset managers now hold 5.8% of their assets in cash! Why? Points to investors and fund managers being downbeat on the ability of central bankers to raise inflation in the face of growing pessimism about growth prospects (17% of them expect a global recession, and as many as 39% expect “helicopter money” to be handed out). Most fear the policy landscape will become weirder.
QE appears broken. This playbook has limited success in US and is patchy at best in Europe and Japan. Frankly, US bankers and economists are growing increasingly uncomfortable with the cycle of QE infinity and more aware of its collateral effects, including keeping US dollar cheap.
But consumers and businesses have been saving rather than spending, with stagnant unemployment overshadowing the windfall from rising asset prices. European banks have been hit by low interest rates, tighter regulation and rising non-performing loans that have hurt profitability. Policymakers are today rethinking strategies. Mario Draghi is, and Haruhiko Kuroda has had a recent relook. The key question remains: how to regain policy effectiveness. That’s where the focus should be – adopt pro-growth structural reforms to make the economies more competitive, and to enhance fiscal creditability.
Sure, BoJ has to make people believe in inflation. Inflationary expectations won’t materialise until BoJ is credible. Credibility – that’s what makes our world in 2016. In the US, both presidential candidates have pledged fiscal stimulus. Hopefully, by next year (after elections in Spain, Germany and France), a more balanced application of softer QE and aggressive fiscal stimulus can turn Europe from a good trade into a good investment.
By Lin See Yan
Former banker, Harvard educated economist and British Chartered Scientist, Tan Sri Lin See-Yan is the author of The Global Economy in Turbulent Times (Wiley, 2015). Feedback is most welcome; email: firstname.lastname@example.org.