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“Formal education is outdated because of the speed of new knowledge.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.

MALAYSIA should leverage on social technology, which is its true strength, … Tan Sri Andrew Sheng, who is a distinguished fellow at Asia Global Institute, … the new economy as it involves lifelong learning to adapt, innovate and create. … To enhance the skills of the civil service, he pointed out Singapore’s …

Andrew Sheng – Project Syndicate

Andrew Sheng, Distinguished Fellow of the Asia Global Institute at the University of Hong Kong and a member of the UNEP Advisory Council on Sustainable …

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Money game scourge


Easier option: Poor experience with regulated investment product providers may be the reason for investors to go for ‘alternative’

Poor wealth management experiences fuel money games

OVER the past 2 months, it was virtually impossible to pick up any newspaper and not read reports about the money game phenomenon that has taken the media by storm.

It is as if the Pandora’s Box had been suddenly flung open by the exposé of JJPTR, leading to other similar schemes coming to light.

The victim profile ranges from white-collared professionals and savvy businessmen to senior citizens and housewives. It would appear as if just about anyone from different walks of life could be susceptible to these money schemes.

It is easy for observers and bystanders to pin the blame on the investors for getting themselves in a sticky situation. After all, if we apply the caveat emptor (buyer beware) principle to other types of goods and services, the investors should have clearly known the risks of subscribing to these money games and therefore should have been aware of the possibility of losing their investments.

So, what caused groups of people to lose their common sense when it comes to money games?

Scams come in many shapes, sizes and forms but look closely and you will see that they all have many things in common in terms of the modus operandi and the people they seem to attract. From JJPTR and MBI International right at our doorstep to China’s Nanning investment scheme and the most notorious Ponzi scheme of all times – the Madoff scandal, all these scams preyed on innate human weaknesses and appealed to investors’ desire to grow their wealth.

Many would be quick to label these investors as greedy or gullible, but I beg to differ. I see nothing wrong with wanting to achieve financial freedom and get higher investment returns. The people who invested and lost in these scams are not multi-millionaires with ample financial resources. They are average Malaysians who have worked hard and saved their money for a rainy day, only to see their nest egg disappear into thin air. What drove them to place the precious results of their blood, sweat and tears into unregulated investment schemes?

I am convinced that the reason stems from the investors’ poor experience with regulated investment product providers.

The so-called ‘push’ factor

There is a mismatch of what consumers need and what financial institutions are trying to sell. Consumers want guidance on how to use regulated investments as a means to grow their wealth with high certainty and achieve financial freedom.

The general public sees banks as an easy, accessible channel to obtain advice on personal finance and investment matters via wealth management services. There is no issue with legitimacy as the array of financial products and services available through banks are duly approved by the regulatory authorities.

The problem arises when investors are not getting what they need, which is advisory support, from their current wealth management providers. More often than not, investors feel overwhelmed by the choices available in the market. Worse still, investors do not know what action to take when their investments lose money. It is not uncommon to find that the wealth management providers are very attentive and proactive in recommending options; but once the sales is concluded, the investor is basically left to his or her own devices.

As a result of the lack of hand-holding or after-sales service, some investors may find that rather than growing money, they end up losing 20%-30% of their capital. The sheer irony of it is that because of the experience of losing money, they now perceive regulated investments as highly volatile and uncertain, and ultimately lose faith. I have personally encountered clients who harbour such misgivings about unit trusts, that they would bluntly tell me right from the initial meeting, not to propose such options to them.

I realised then the extent to which poor experiences with wealth management providers can lead to misplaced biases against certain investment vehicles even though investors could benefit from the right ones. When disillusioned investors turn their heads elsewhere, this is when they discover “alternative” investment options. And many end up falling for money games because they are sold on the idea of fixed return investments perceived to be low risk, coupled with the promise of better returns.

In this instance, the “push” factor, i.e. the unmet financial needs of consumers, which contributed to investors subscribing to shady schemes, has equal bearing to the “pull” factor (attraction) of these money scams.

“I am like any other man. All I do is supply a demand.” – Al Capone, American mobster

As with most goods and services that are detrimental to our well-being (e.g. junk food, cigarettes, gambling, etc), it is consumers’ demand for them that drives their industry and makes them thrive. Without customers, these shady businesses would naturally die off.

The ability of the money games to proliferate boils down to the “smart” business acumen of the operators to “fill the gap” so to speak. By offering an alternative investment scheme at a time when the market is slow and when many investors are experiencing losses, these money games are seen as a sudden golden ticket towards becoming rich. However, as we have seen, the golden ticket eventually loses its shine and the investors are left holding nothing but a worthless scrap of paper.

Therefore, there would be fewer victims of money games if the wealth management industry as a whole were to step up and reinvent themselves into a genuine one-stop financial centre to help their clients address all financial and investment issues at various points of their lives.

When the grass on one side is always greener, the rest will not matter

In order to ensure that they are seen by clients as the “go-to” person for all financial and investment related concerns, wealth management providers will need to exceed expectations and to a certain degree, over-deliver on their current role.

Wealth managers could assist clients to evaluate various investment proposals to determine its suitability and guide clients to use regulated investment vehicles to invest in various asset classes such as equities, bonds, REITs and foreign investments to grow their money effectively. They could also play the role of a financial bodyguard to help investors fend off scams and illegitimate investments.

In an ideal world, wealth managers will set aside sufficient time and effort to understand the client’s financial position in a holistic manner. They will prepare a tailored and dynamic plan with milestones and checkpoints to help monitor and review progress.

To my peers in the wealth management industry, I would say, cut the lip service and let’s get serious about managing and growing wealth for our clients.

When more and more investors realise that they are able to count on their wealth management providers for all the required support they need to achieve their financial end game, then money games will no longer have room to take root.

Money & You Yap Ming Hui

Yap Ming Hui (ymh@whitman.com.my) is a bestselling author, TV personality, columnist, coach and host of Yap’s Money Live Show online. He feels that the financial world is getting too complicated for everyone, and initiated a weekly online show to address the issues.For more information, please visit his website at www.whitman.com.my
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Childcare centre fees set to go up


Child care centre fees will likely increase by 10 per cent next year. — Picture by Zuraneeza Zulkifli

Operators expect 10% hike next year

SUNGAI BULOH: The fees for childcare centres across the country are expected to increase by at least 10% next year, says the Association of Childcare Centres Selangor.

This was due to the revised minimum wage, said association president Mahanom Basri.

“The increase depends on the management of the centre. If the rent, salaries and other expenditures have gone up, it will increase by between 5% and 10%.

“It won’t be a lot, but there will definitely be an increase,” she said here yesterday.

For example, Mahanom said a 10% increase from the RM300 fee per child would result in a new fee of RM330.

Besides the minimum wage, she said childcare centre operators also had to install CCTVs for extra security.

“Quality facilities require money so I hope parents are ready to pay for them,” she added.

The Government introduced the minimum wage policy in 2013.

On July 1, the monthly minimum wage was increased from RM900 to RM1,000 for peninsular Malaysia and from RM800 to RM920 for Sabah, Sarawak and Labuan.

Mahanom, together with more than 300 childcare centre operators, attended a dialogue session with Deputy Women, Family and Community Minister Datin Paduka Chew Mei Fun yesterday.

One of the issues raised during the two-hour closed-door dialogue was the licensing fees charged by local councils.

“We have proposed to the local councils that they could treat childcare centres as community service instead of commercial business.

“By doing so, they can reduce the licensing fees,” Chew said.

She said the ministry was also looking into easing some regulations.

“We will be looking at the ratio; such as how many children should be cared by one minder without compromising on safety.

“Childcare service is important and the demand is big. Many families have both parents working so we need to have a strong childcare service,” she added.

By Nurbaiti Hamdan The Star/Asia News Network

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Tech Dome Penang Official Opening


https://www.youtube-nocookie.com/embed/NhYGqyW9Ke8

https://www.youtube-nocookie.com/embed/Imaf7Ibb5nQ

https://www.youtube-nocookie.com/embed/RH-IHut4S88

https://www.youtube-nocookie.com/embed/E_XrNA4KS54

The official opening of TECH DOME PENANG on July 16 marks the culmination of an arduous and challenging 5-year journey to set up the state’s very first Science Discovery Centre..TECH DOME PENANG has been modelled after the San Jose Tech Centre whereby the government provided the building and funds are raised from the corporate sector and the public. The Penang State Government has, however, taken this a step further by not only providing the use of the iconic Komtar Geodesic Dome to house the facility but also provided funding of RM5.15 million (through the Penang Development Corporation) to kick-start the project.

When the present State Government assumed office in 2008, it realizes the paramount need to not only maintain Penang’s position and status as a globally-renowned centre of technological excellence but with a mission to take it to the next level and beyond through innovation, research and development.

Chief Minister Lim Guan Eng was instrumental in providing the impetus and the push as he realized that the mission cannot be achieved merely through just the vision and support of the State Government and industry players but would require a very essential component which is a highly skilled and knowledgeable human capital. After all, human talent is the new oil of the 21st century and building human talent requires a PPP model of Public Private Partnership.

There has been increasing concerns about the declining interests in the pursuit of studies and also the continuous decline in standards of English, Mathematics and Science among students below 15 years of age as evidenced through studies conducted under the Program for International Student Assessment (PISA) conducted by the Organisation for Economic Co-operation and Development (OECD).

In their latest ranking released for 2015, Malaysia was ranked a lowly 52 out of 76 countries assessed, well below regional powerhouses like Singapore (1st), Hong Kong (2nd), South Korea (3rd), Taiwan and Japan (joint 4th). What was alarming was that even a comparatively new player like Vietnam was ranked 12th. If Malaysia cannot even surpass Vietnam, how then can we be a manufacturing powerhouse. The urgency to return Penang’s position as the Centre of Excellence (COE) for Science and Technology became critical.

Tech Dome Penang will showcase more than 120 international-standard exhibits targeted at sparking the interests of the younger generation to the exciting world of Science and Technology and providing the catalyst to inspire them to pursue studies and careers in these fields. The exhibits are laid out in 6 main galleries, namely Robotics, Information Technology, Forces & Motion, Electromagnetism, Life Tech and Optics. In addition, there is a Children’s Exploration Zone for pre-schoolers and also an Observatory housing the largest telescope in Penang.

The majority of the exhibits were designed and supplied by exhibits design fabricators from New Zealand, Germany and USA. The centre will also showcase exhibits from local manufacturing corporations and other locally-based Multi-National Corporations.

Besides showcasing exhibits, Tech Dome Penang will also house classrooms and a laboratory to conduct science classes, workshops and school holiday camps for students.

Industry players may also find Tech Dome Penang a suitable venue for carrying out their team-building programmes as a number of the exhibits are suitable for such purposes. There is also additional floor space in the annex for companies to hold public exhibitions to showcase their technology and products or to even hold simultaneous walk-in interviews.

There are also CSR opportunities for companies to sponsor visits by children from rural-based schools and also the under-privileged.

Entry charges for those with MyKad are RM12 for children from 5 years to below 12 years, RM16 for children with student cards, and RM20 for adults. Children below 5 years enter free while senior citizens pay RM12.

Tech Dome will be open daily from 10am – 6pm except for Tuesdays (unless Public Holidays) when it will be closed.

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China, next global hub for higher education


With its varsities gaining better rankings, the most populous nation is set to become the world’s leading learning destination.

 

HIGHER education in China can perhaps be traced to the establishment of a Taixue (the Imperial Academy) in the capital city of China during the Western Han Dynasty (206BC to 9AD).

Before this there were no formal organised institutions of higher learning. Only private education was available. Thus taixue became the highest educational institution in imperial China.

The earliest taixue education was based on legalist and Confucian ideals and philosophies, but later it evolved into one that was mainly Confucian-based when Emperor Wu (141BC to 87BC) decided to adopt Confucianism as the state doctrine. Imperial University was the first Confucian-based institution established in 124BC.

The taixue system later evolved into what was known as Gouzijian (Directorate of Education or National Central Institute of Learning). This occurred during the Western Jin Period (265 to 316).

Under the gouzijian system, higher education was stratified and segmented.

The system of admission and enrolment of students to these different levels and segments was based on social standing.

This traditional system of higher education was in place for the next 2,000 years before it underwent structural reforms into “modern universities” that we know of today.

In the late 19th century, several traditional institutions of higher learning sought permission from the Emperor to “modernise”.

However, Peking University is generally regarded as the first “modern university” in the country.

This was in 1898 and the term daxue for such institutions was adopted.

The university was first known as the Imperial Univer-sity of Peking before it became the present Peking University.

The reformation came about when events that took place in China in the mid-1800s opened up the country to the rest of the world.

Varsities closed

Even so, these new centres of learning experienced a period of great turmoil during China’s Cultural Revolution of 1966 to 1969.

In the early months of the revolution, schools and universities were closed.

Though the revolution was officially over by 1969, its activities however continued until 1971 and most universities did not reopen until 1972.

From the 1980s onwards, higher education in China underwent further reforms.

In 1995, Project 211 was initiated to raise research standards of about 100 universities by the 21st Century, hence the term Project 211.

Project 985 launched in May 1998 by President Jiang Zemin, initially targeted 10 universities. They were given the necessary support to make them all world-class institutions. The number of such universities has now gone up to 39.

The project has also resulted in the creation of what is known as the C9 League of universities. The aim is to create a league that is equivalent to the Ivy League of the United States.

The C9 universities are Fudan University, Harbin Institute of Technology, Nanjing University, Beijing University, Shanghai Jiao Tong University, Tsinghua University, University of Science and Technology of China, Xi’an Jiaotong University and Zhejiang University.

China spends about 4% of her GDP on education and currently spends about US$250bil (RM1.03tril) a year on human capital development.

There are about 2,900 universities and colleges in China with a total enrolment of some 37 million students. Close to 380,000 international students from 203 countries studied in China in 2014.

The bulk of them were from South Korea, the US, Thailand, Russia, Vietnam, India, Indonesia, France and Pakistan.

Currently only about 10% of foreign students receive Chinese government scholarships and the rest are mainly self-funded.

However this is expected to change as China aims to attract 500,000 international students by 2020 and providing more scholarships is a way to support the target.

The 2016 Higher Education System Strength Rankings (by Quacquarelli Symonds – QS), placed China at eighth worldwide with China’s strongest score being in the economy metric.

The eighth place ranking is the highest for Asia with South Korea and Japan placed at the ninth and 10th position respectively.

The first seven places were taken by the US, UK, Germany, Australia, Canada, France and the Netherlands respectively. Malaysia is placed 27th, behind Taiwan, Hong Kong and Singapore.

This ranking is an assessment of the overall education system strength and flagship university performance, alongside factors relating to access and funding.

Also, according to the QS World University Rankings of 2015/16, of the world’s top 800 universities, four of the top 100 are in China.

They are Tsinghua University (ranked 25), Peking University (ranked 41), Fudan University (ranked 51) and Shanghai Jiao Tong University (ranked 70) with Tsinghua being third in Asia after the National University of Singapore and the Nanyang Technological University of Singapore (ranked 12th and 13th respectively).

Tsinghua is even ahead of universities in South Korea, Japan, Hong Kong and Taiwan. Xiamen University, placed 17th in China, fell in the 401-410 band.

For Malaysian public universities, Universiti Malaya (UM) is placed 146 while Universiti Sains Malaysia (USM) is ranked 289. Universiti Teknologi Malaysia (UTM) is at 303 while Universiti Kebangsaan Malaysia, 312 and Universiti Putra Malaysia, 331. None of Malaysia’s private universities appeared in the list.

According to the Times Higher Education World University Rankings of 2015-2016, two universities in China made it to the world’s top 100 out of the 800 listed.

The two were Peking University (ranked 42) and Tsinghua University (ranked 47), with Peking being ahead of universities in Japan, Hong Kong and South Korea.

Tsinghua was ahead of even the best in South Korea.

The best Malaysian university listed was UTM, placed in the number 401-500 band, similar to that of Xiamen University which has a branch campus in Sepang, Selangor.

Most of the British universities with branch campuses in Malaysia are within the world’s top 200.


Research performance

The Academic Ranking of World Universities (ARWU), also known as the Shanghai Jiao Tong World University Ranking, ranked 500 universities worldwide based mainly on their research performance.

For 2015, four universities in Japan did better than those in China.

The top university in Japan was the University of Tokyo (ranked 21) while the top four in China, according to alphabetical order, were Peking University, Shanghai Jiao Tong, Tsinghua and Zhejiang University. They were placed in the number 101-150 band.

Malaysia’s top university, according to ARWU, was UM, placed in the number 301-400 band, while USM, the next best, was placed in the number 401-500 band. Xiamen University was placed in the same band as UM.

In a span of about 120 years, from having only one “modern” university, there are now about 2,900 universities and colleges in China. Several are world-class and are ready to compete with the best in the US and the UK.

Within the next decade, two universities in China may be ranked among the world’s top 10.

To achieve this, the government is going to great lengths to attract leading scholars, especially overseas Chinese scholars, to take up academic appointments at its leading universities.

Many universities in China are not only focusing on developing technologies that are competitive, but are doing so in areas like business education. Improvements have been by leaps and bounds.

Under such a scenario, what effects would the above have on world higher education in general and the trend of higher education pursuits by the global Chinese diaspora in particular?

It is an open secret that China encourages successful overseas Chinese to return to China to help in its development.

Even though the country is now the world’s second largest economy, there are still many spheres that need to be developed before China can claim to be at par with developed nations of the West.

One strategy would be to attract the best foreign students to study in China.

Upon graduation, these students can then be enticed to stay on to help develop the country.

Even if the graduates decide to return to their home country, their positive experiences while in China and the local Chinese network of friendship (guanxi) that the students have established are assets that will to some extent, influence their home countriesfavourably in their dealings with China.

Having foreign students on campus also has the added benefit of excha-nge and enrichment of experiences and ideas between local students and those from different parts of the world.

Such a strategy is not new as it has been practised by countries of the West even though these countries have their own bright students.

That is one reason why the West is now so strong and advanced, especially in the area of science and technology.

This approach of attracting the best foreign students can only be successful if an excellent system of higher education is in place, and China is doing just that.

As a start, China is also increasing the number of scholarships for foreign students.

For example during the 18th ASEAN-China Summit held in Kuala Lumpur last November, China’s Premier Li Keqiang made a commitment that China will increase the number of government scholarships for Asean countries by a thousand over the next three years.

Incentives

On a global scale such efforts may not seem much, but China might introduce innovative incentives to attract the best foreign students to its shores.

The country might just be waiting for the right moment to do so.

Like all other projects launched, once a decision is made and the time is right, China would go all out to implement the idea in a big way.

The soft power strategy outlined above, if introduced, would have a greater impact in countries with a large overseas Chinese population – especially in countries where these students are marginalised with limited access to higher education.

Together there are close to 27 million overseas Chinese living in the Asean region. This is about half the total number of overseas Chinese worldwide.

China may have the edge over the West in attracting these overseas Chinese students as many of these students would be familiar with China’s culture and language.

However it must also be highlighted that presently in China, some university courses are already being taught in English.

From the economic perspective, the cost of higher education in China is relatively cheap compared to those in the West.

Depending on the programme of study, the location of the institution, the type of accommodation sought, and the food consumed, the cost can be as low as US$4,000 (RM16,000) per year.

However it can also be at US$10,000 (RM40,000) per year, making it less affordable to those from poorer nations.

Nonetheless, even now, , studying in China is already a good option.

Doing so not only allows one to receive a world-class education at an affordable cost, it also provides the opportunity for one to establish vast professional and business networks.

These networks are certainly beneficial in a world that has predicted that China would be the largest global economy and a superpower in the not too distant future.

By Dr Lim Koon Ong

The writer is a former Universiti Sains Malaysia deputy vice-chancellor, and is presently an emeritus professor there.

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If it’s too good to be true, something’s wrong



DURING a recent shopping session with my family, I saw an interesting promotion for a television set at a big retail store.

The retail price for the said television set was RM4,999. A 22% discount was offered for cash purchasers which brought the price down to RM3,899.

While the price seemed attractive enough, I saw another sweetener for the deal, stating that the special price under its flexible payment plan was RM2,729.30, apparently a massive 45% discount from the retail price!

At first glance, the flexible payment plan was the best deal. As the deal seemed too good to be true, I decided to do some calculation to see the rationale behind it.

Under the flexible payment plan, the weekly installment was RM26.72 for a total of 5 years.

The price of the television set would end up to be RM6,947 instead of RM2,729 upon the last payment.

I was surprised with the huge difference between a cash purchase and the flexible payment plan. This incident has also highlighted some blind spots we have in our spending.

Many a time, there are instalment plans that offer seemingly low interest rates as their marketing strategy.

As consumers, we may end up spending more than we thought if the effective interest rate and other financial concerns are not taken into account.

Taking the television set as an example, the total amount paid for the instalment plan is 78% higher than the cash purchase.

The effective interest rate per year for the financing of 5 years is about 45%, which is way higher than our fixed deposit rate of only 4%.

Bear in mind the high amount that we pay is for a depreciating item. With more advanced technology introduced year after year, the television set we buy today would not have much value left.

Thus, what looks like an attractive deal initially does not ring true anymore after factoring in high effective interest rates and accelerated depreciation in values.

Looking at the high premium charged for the instalment plan, it would be better to go for a cash purchase if the situation permits.

Often, it is better to evaluate our needs before making the decision to purchase depreciating items.

I always encourage prudent spending especially in testing times when we are faced with uncertainty in the economic environment.

Imagine if we can channel the money spent on depreciating items to assets such as investments or properties for the same period of 5 years.

Our money would have grown and helped to improve our financial position, or at least to hedge against inflation.

Other than potential value appreciation, the interest we pay for a housing loan is lower compared to other loans such as personal, credit card and car loans.

The effective rate for a housing loan is as advertised, and the rate is calculated based on the reducing balance (only pay interest on the remaining loan balance).

On the other hand, for car loans and flexible payment plans like the one mentioned above, their interest rates are calculated based on the full loan amount throughout the term, which makes the actual interest rate higher than the advertised rate.

For instance, the interest rate for credit cards is calculated based on 1.5% per month, hence the effective rate per year is 18% (1.5% times 12 months).

On the other hand, for a RM100,000 car loan with a 2.5% interest rate and a 7-year loan tenure, the interest amount would be RM17,500, making the total amount for the car RM117,500.

As a result, the effective interest rate for this car loan is 4.7% instead of 2.5%.

On many occasions, we tend to be drawn in by the “attractiveness” of easy payment plans without weighing the hidden financial commitments.

Though it helps us to obtain an item immediately, we may overlook the true value of the item and the potential financial burden it brings.

Therefore, if a deal is too good to be true, most of the time, it is just too good to be true and worth a second thought.

By Alan Tong food for thought

Datuk Alan Tong 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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The Corruption case in the Youth & Sports Ministry Malaysia is a reflection of broken systems in country


The brazen embezzlement of RM100mil from the Youth and Sports Ministry exposes stark weaknesses in the management of public funds.

 

 

THE case of the mid-level civil ser­vant who embezzled more than RM100mil undetected from the Youth and Sports Ministry for years should rightly boggle the mind.

But when it comes to corruption and fraud in the country, most Malaysians aren’t easily baffled anymore. There are more outrageous scandals in our midst, including one best described as the proverbial jumbo in the room.

Still, the misappropriation of RM107mil of public funds by the official is yet another appalling reflection of what has gone wrong in the system.

It does not make sense that the 56-year-old division secretary who was arrested with eight others, including a woman, last Friday, could brazenly make payments to 14 companies for non-existent work without the knowledge of those above or below him.

According to the Malaysian Anti-Corruption Commission (MACC), he pocketed at least RM20mil in kickbacks from the procurement fraud operation which began in 2010 and perhaps even earlier than that.

The money from the National Sports Council was channelled directly to the companies and to his bank accounts – all 69 of them.

Surely he could not have done this all by himself. Under the ministry’s standard operating procedures, who were the others responsible for super­­­vising and approving the payments? The perception is they were either grossly negligent or in cahoots with him. And what about the internal auditors? Were they caught napping too?

As Transparency International-Malaysia president Datuk Akhbar Satar has pointed out, the ministry’s internal auditors should have spotted the stealing.

Let’s not forget that this ministry endorsed the Corporate Integrity Pledge under the Anti-Corruption National Key Results Area initiatives with much fanfare in 2014.

The pledge was made two years after allegations on questionable spending by the media and a Public Accounts Committee hearing in Parliament.

Among the issues raised was a bill amounting to more than RM10mil for the 2012 Hari Belia Negara event.

It was for supplies and services supposedly provided by an events management company for rental of tents, booths, stage, lighting and sound systems and performances by local entertainers and three K-pop groups – Dal Shabet, Teen Pop and U-KISS.

The investigations into the embezzled RM107mil are still at the initial stages. The MACC is now following the money trail and questioning more people, including those in the ministry and former senior officials, under Section 17(a) of the Malaysian Anti-Corruption Commission Act 2009 and the Anti-Money Laundering Act. As for the main suspect, who is under remand for a week along with the eight others, he was clearly living beyond his means.

His audacious showiness and extravagant lifestyle blew his cover.

Among the things seized from his house and office in Putrajaya were 12 luxury cars, a wide assortment of jewellery, including a RM600,000 Cartier ring, paintings, luxury watches and 40 designer handbags.

The MACC has also seized RM8.33mil from the 69 bank ac­­counts. The officer is also believed to have received other kickbacks from the companies in the form of houses, trust fund payments worth millions and supplementary credit cards.

Apparently, he withdrew RM500,000 from one of his bank accounts a day before he was nabbed and used RM200,000 to pay his cre­dit card bills and sent RM40,000 to his son’s bank account in Australia.

Investigations also showed that man and his family had been travelling first class to Australia, Europe and the US at least once a month.

As always, pledges of impro­ving the system are made each time a new financial scandal is unco­vered.

Chief Secretary to the Government Tan Sri Dr Ali Hamsa said the Auditor-General’s Depart­ment would conduct a check on the Youth and Sports Ministry and its agencies.

He said it would cover financial and procurement processes and identify weaknesses.

But, as Dr Ali said, the secreta­ries-general of ministries should have been aware of all expenditure in the first place, as they were effectively chief financial officers.

According to him, there should not be any case where an officer could approve funds without autho­risation from the secretary-general, adding that a circular on this had been issued for some time now.

So why was this not followed in the case of the Youth and Sports Ministry, where there have been se­veral secretaries-general since 2010? The simple answer is the rules are there but they are not being followed, even at the highest levels.

Our system is broken and this is the main reason why corruption is so rampant in the country and the trust deficit in the Government is growing by the day.

Earlier this month, the Sultan of Perak, Sultan Nazrin Muizzuddin Shah, called for corruption to be fought with more determination.

“It must be tackled without bias, without fear and without favouri­tism because corruption is corruption no matter who commits it,” the Perak Ruler said in his speech at the Utusan Business Awards presentation on March 1.

Likening corruption to termites eating into the main pillars of the country, he warned that failure to address the scourge would lead to Malaysia’s certain downfall with citi­zens undergoing suffering like that being experienced in under-deve­loped countries.

“The public must be inculcated with a culture to hate corruption and to reject leaders involved in corrupt practices,” said the Perak Ruler, describing Malaysia’s poor score in Transparency International’s corruption perception index as a cause for alarm.

Malaysia’s current 50th spot is be­­hind Saudi Arabia (48), Jordan (45), Namibia (45), Mauritius (45) and even Rwanda (44). It only scored 50 points in 2015, two less than in 2014.

Last week, Time magazine deli­vered another damning blow on the level of corruption in the country.

In outlining specifics explaining the state of global corruption, it named five countries led by Brazil. Malaysia was second, followed by South Africa, China and Russia.

Along The Watchtower By M. Veera Pandiyan The Star

Associate Editor M. Veera Pandiyan likes this observation by 4th century Chinese philosopher Zhuangzi who said: “The petty thief is imprisoned but the big thief becomes a feudal lord.”

Related post:

Malaysia slides in global Corruption perception index

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