A question of faith, the corridors of power in Malaysia


Family dynasty: Malaysians are familiar with related politicians, but we should create a racket if Anwar is PM and Nurul Izzah becomes a Minister while Dr Wan Azizah still remains Deputy Prime Minister

The deal was sealed, yet, for inexplicable reasons, PKR president Datuk Seri Anwar Ibrahim’s route to the top is being challenged …

THE Port Dickson by-election has unexpectedly become a controversy for some PKR leaders and the party’s supporters.

Suddenly, Datuk Seri Anwar Ibrahim has found himself being openly challenged by some of the top brass for his purported failure to consult them on the selection of the coastal town for a by-election, and why his wife or daughter weren’t asked to vacate their seats, instead.

For sure, this is unfamiliar ground to any leader – to be openly challenged. Call it democracy, but it looks more like an open rebel.

Anwar is now being accused of nepotism and those who have defiantly questioned this move include prominent lawyer S. Ambiga, who is closely linked to Pakatan Harapan.

Even the issue of race has cropped up in social media, with some, hiding behind anonymity, demanding why an Indian MP had to be sacrificed for the PKR president.

Others have suggested that Anwar is an impatient man, and that he should wait until the next general election in five years’ time for his turn. Perhaps he could be named senator, first, and save the big bucks needed for a by-election.

However, some of these politicians have suddenly developed amnesia, it seems, now that they hold positions in government.

They seem to have forgotten the pledge made to Malaysians was for Anwar to be pardoned and released from his incarceration.

In fact, that’s the basis of the PKR struggle – to free Anwar, who had to live with the unofficial title of de facto PKR leader. He was the party boss, even while languishing behind bars for 11 years.

Love him or loath him, only Anwar can glue the PH government in Tun Dr Mahathir Mohamad’s absence.

Not any PH leader, including Datuk Seri Dr Wan Azizah Wan Ismail, Mohamed Sabu, Lim Guan Eng, or, for the time being, Datuk Seri Azmin Ali, could manage it.

It’s not about competence or ability, but about holding a government together. All his harshest critics, including those who questioned his trustworthiness, would admit it, even if reluctantly.

Anwar is also the only one who can man the fort against opponents like Umno, PAS and the right wingers who wield race and religion like weapons.

He was the man who issued press statements from jail, as we wondered how he did it.

And, of course, we remember all those street protests under different names and colours, all essentially for a singular purpose – to free him. So, it must be surprising to Anwar, who would probably feel slighted, to learn about the rebellious remarks made by some self-important key personalities for his need to first earn their approval and then consult them to contest in a by-election.

Suggestions of deceit abound, and no wonder, what with decisions shrouded in secrecy and lacking transparency.

And there we were thinking it was clear that Anwar would contest a by-election, get into Parliament and wait for his turn to be Prime Minister. Even premier Dr Mahathir has proclaimed unequivocally that he would hand the torch to Anwar and honour the agreement by the four partners of the Pakatan Harapan alliance to step down after two years.

So, the question is, how can Anwar be the successor if he is not an MP?

It’s pointless being the PM-in-waiting if one isn’t elected. We could not give two hoots about the charade and antics of politicians, who have the audacity to tell us they dislike politicking. We want certainty, stability and succession planning.

Dr Mahathir is already 93 years old, and it is just biologically and physically impossible to expect him to be PM until the next general election. We can’t allow the rigours of the job to take their toll on him.

A video of him walking wobbly recently circulated, so surely, we want him to remain healthy. However, he is still a mere mortal.

Anwar being named successor and elected into Parliament will provide better comfort because otherwise, an ugly scramble for power is bound to ensue, which we have no wish to see.

We don’t really care if Anwar chooses Port Dickson, Puncak Borneo or Timbuktu, because we are all suffering from the fatigue of election fever, which never seems to cease in Malaysia as they come in all forms and temperatures.

A by-election costs money. Also, it is in poor taste to ask a serving MP to step down to make way for Anwar. Most of us might hate the idea, but progression needs to take place.

Let’s be openly ignorant about this, because up until last week, most of us had never heard of Datuk Danyal Balagopal Abdullah, with due respect. Of course, we didn’t even know he was a retired first admiral. But those who attended his ceramah during GE14 said he never failed to remind them he served in the navy for 38 years.

Danyal has been recognised as the “voice” of the navy, and for them, his loss means no one will champion their cause.

Once Anwar is elected MP and eventually becomes Prime Minister, the full breadth of his ability will be on display, courtesy of his authority and power as a leader. Every constituent would want the serving PM as their MP, so the same can be said for PD. Surely, they can see the preferential treatment accorded to Langkawi and Pekan.

Then there is the issue of family dynasty, but let’s not get into this because the Lim brood has two MPs and a senator, the Karpal clan has two MPs and one state assemblymen, and of course, there’s the PM and his Mentri Besar son.

Malaysians are familiar with this situation, and how most of these individuals got elected is proof that it has never been an issue.

But we should create a racket if Anwar is PM and Nurul Izzah becomes a Minister while Dr Wan Azizah still remains Deputy Prime Minister.

You can count on your bottom ringgit, though, that’s neither going to happen, nor be allowed to happen.

Credit: On The Beat , Wong Chun Wai – The Star’s managing director/chief executive officer and formerly the group chief editor.

Well, at least that is the plan, unless Mahathir moves first and scuttles this plan. Now, what was
that again about Malaysia being a boring country to live in? Let me tell you, even the UK and the US, which are also in political turmoil, are not as interesting as Malaysia. And I think I will support Mahathir just to see Anwar fail and to make sure the rollercoaster ride ends here, once and for all.

I would rather support Mahathir than Anwar –

THE CORRIDORS OF POWER by

Raja Petra Kamarudin

If it comes down to whether to support Tun Dr Mahathir Mohamad or Anwar Ibrahim, in 1998 I supported Anwar (although I did not like both). Today, I would support Dr Mahathir rather than Anwar (even though I still do not like both).

The issue here is between the lesser of the two evils, as the Pakatan Harapan people, in particular the DAP Chinese, have been telling us since 2015. So, it is not whether you support the angel or the devil but more like which of the two devils you prefer.

I suppose, to be able to stay as Prime Minister for 22 years, survive so many ‘assassination’ attempts over those 22 years, and to be able to come back 15 years later for a second round, you really need to be a devil.

Now, the reason why I prefer Mahathir over Anwar is because Anwar has been taking us for a rollercoaster ride for the last 40 years or so and that ride is still not over. Now we are going for yet another rollercoaster ride with the ‘PD Move’ after the most disastrous ‘Kajang Move’ that took us nowhere.

 

The plan was for Anwar and not Mahathir to become the Seventh Prime Minister

With Anwar you do not know whether you are coming or going. One day we are asked to go east and another day we are told to go west. And while Anwar confuses us with the change of direction from east to west, we find out that he is going north while leaving us all behind.

Say what you like about Mahathir, but when you serve him he looks after you well. He never abandons ship and allows you to drown. If you are loyal to Mahathir he is loyal to you in return.

Anwar, however, is another kettle of fish. He uses you to serve his agenda and when you are no longer useful to him he discards you. Your loyalty is not repaid. In fact, your loyalty is betrayed.

And this is what makes Mahathir a better ‘boss’ compared to Anwar.

Back in 2006 when I used to go to Mahathir’s house to meet him, he would wait for me at the door and walk me to my car when we leave. That ‘small gesture’ meant a lot considering he was the ex-Prime Minister.

At least Mahathir does not treat you like a donkey the way Anwar does

Do not expect that from Anwar. He would sit on his throne and expect you to pay him homage.

In 2008, the day I was released from ISA detention, Mahathir phoned me to ask how I was. That phone call made my day and convinced me that Mahathir cares about the people who work for him or with him.

On the other hand, I had to make an appointment to meet Anwar and only managed to see him two weeks later. And when I met him he never inquired about my health. He just spoke about how he is going to come back as Prime Minister — as if I cared whether he becomes Prime Minister or not.

As I said, for more than 40 years Anwar has been taking us on a rollercoaster ride and with him we really do not know whether we are coming or going. In the 1970s, I supported Anwar Ibrahim because he supported PAS — and I also supported PAS after I moved to Terengganu in 1974.

Anwar defected to Umno in 1982 because that was the only way be could become Prime Minister

In 1982, Anwar abandoned us and defected to Umno in what I considered a betrayal. But when Anwar needed to challenge the Umno Youth leader, Suhaimi Kamaruddin, and he did not have the ‘machinery’, he came back to us for help.

Anwar promised if he wins the Umno Youth leadership he will make Umno more Islamic. Ustaz Fadzil Muhammad Noor, the late PAS President, told us to give Anwar a chance so we supported Anwar in his challenge for the Umno Youth leadership.

In 1987, Tengku Razaleigh Hamzah (Ku Li) challenged Mahathir for the Umno presidency (while Tun Musa Hitam challenged Tun Ghafar Baba for number two). Anwar instructed us to support Mahathir and Ghafar (even though at that time most of us preferred Ku Li).

Then we realised why Anwar instructed us to support Mahathir and Ghafar. If Ku Li and Musa wins, Anwar is finished. If Mahathir and Ghafar wins instead, Anwar can oust Ghafar and take over as number two and then oust Mahathir and take over as number one.

Anwar wanted Ghafar to win because it would be easier to oust Ghafar and take over as the new Deputy Prime Minister

That was already Anwar’s plan in 1987.

In 1993, Anwar challenged Ghafar for the Umno Deputy Presidency but I refused to support him and left his team. This is because Anwar was being funded by Vincent Tan and hundreds of millions was being spent to oust Ghafar — RM200 million in Sabah alone.

Because Ghafar could not match Anwar’s financial onslaught, he backed out and allowed Anwar to win uncontested. Four years later, in 1997, Anwar made his move to oust Mahathir but Mahathir was ready for him. This time Anwar was outfoxed by the old fox.

Fast-forward to 2018. Anwar is yet again preparing to challenge Mahathir for the post of Prime Minister. We would think he would have learned his lesson from the 1997 fiasco. Anwar wants to be back in Parliament by October in time for the November session.

Anwar expects Azmin to lose the deputy presidency contest, after which he will leave PKR with his supporters

Anwar’s plan is simple. He wants to do a deal with Umno and PAS and create a new or third coalition (let’s call it Barisan Rakyat). Anwar wants to make sure that Rafizi Ramli wins the PKR deputy presidency and he expects Azmin Ali to leave PKR with his supporters and join PPBM.

Anwar has been talking to Taib Mahmud and Shafie Apdal to get Sarawak and Sabah to join his new coalition. With half of Umno, more than half of PKR, PAS, Sabah and Sarawak, Anwar can get enough majority to form a government.

And, by Christmas, ‘Malaysia Lagi Baru’ will have ‘Barisan Rakyat’ running the country with Anwar as Prime Minister and Ahmad Zahid Hamidi as Deputy Prime Minister — and with another two Deputy Prime Ministers, most likely from PAS and Sabah-Sarawak.

Well, at least that is the plan, unless Mahathir moves first and scuttles this plan. Now, what was that again about Malaysia being a boring country to live in? Let me tell you, even the UK and the US, which are also in political turmoil, are not as interesting as Malaysia. And I think I will support Mahathir just to see Anwar fail and to make sure the rollercoaster ride ends here, once and for all.

Advertisements

Revolutionising accounting for a new era


The field of accounting is in need of a new breed of professionals who can contribute more than a quantifiable value to companies.

 

Increasingly, accountants in business are given the opportunity to be less involved in automated operations and focus more on big picture strategies, which gives a clear indication of the type of skills required in the near future. Bryan Chung, FCPA

 

WHEN talking about the Industrial Revolution, images that often come to mind include the extensive use of steam power, the birth of heavy machinery and ironworks, and bleak factories in England.

However, two more industrial revolutions have since passed and the 21st century is paving its way for the Fourth Industrial Revolution (IR 4.0), which is seeing the rise of autonomous decision making of cyber-physical systems and machine learning through cloud technology.

In simple words, IR 4.0 is the usage of artificial intelligence (AI) and the Internet to transform age-old processes and operating procedures across all industries.

With such change taking place, what does this mean for the accounting industry and where do accountants find their relevance in an era that looks to automate everything?

Calculating assets

In an interview with international education provider Kaplan, Malaysian Institute of Accountants’ (MIA) chief executive officer Dr Nurmazilah Datuk Mahzan said, “Among the current trends that are creating waves in the accountancy profession are big data and analytics.

“Companies of all sizes create massive structured, unstructured and semi-structured data every day. Organisations harnessing big data would be able to find new insights and discover unique patterns of their customer behaviour or even create new businesses that were previously not possible.”

Echoing her sentiments is Bryan Chung, Fellow of CPA Australia (FCPA), divisional councillor at CPA Australia (Malaysia), who believes that even though AI is good at matching patterns and automating processes – making technology useful to many functions in companies in the process – accountants still play a vital role.

He says, “While there is a lot of hype surrounding blockchain and AI in accountancy with more firms taking steps to increase or experiment with their use, it is unlikely that accountants (or auditors) will be out of a job anytime soon.

“It is likely that most of the administration process will be the first to be introduced to AI. Increasingly, accountants in business are given the opportunity to be less involved in automated operations and focus more on big-picture strategies, which gives a clear indication of the type of skills required in the near future.”

The challenge, however, is turning the current workforce in the accounting field into professionals who truly understand the implications of IR 4.0, not just in terms of their personal skills but also movements within the industry.


Discovering market potential

Gone are the days when sales numbers, website traffic and KPIs were sufficient information to measure monthly net profits.

In the same Kaplan interview, the organisation’s global professional accountancy head Tanya Worsley said, “Businesses today depend on their accountants beyond purely checking financial figures and balancing books.

“Financial professionals are expected to be able to provide their clients with actionable insights that can add value to the organisation’s overarching strategic goals.”

The changing role of accountants in the digital economy is what prompted MIA to launch the Digital Technology Blueprint in July this year, a document that outlines the five driving principles to help guide Malaysian accountants to respond appropriately to digital technology.

These principles are related to digital technology trends, the identification of capabilities, harnessing of digital technology, funding and governance.

Accountants who fail to stay updated with the latest trends and knowledge will cause their employers to lose out in the long run, while competing firms take advantage of the evolving cloud system.

For these reasons, upskilling and obtaining professional qualifications from MIA or accountancy bodies such as CPA Australia, Association of Chartered Certified Accountants, Institute of Chartered Accountants in England and Wales or Chartered Institute of Management Accountants should be considered a necessity instead of mere steps for higher management.

As most professional accountancy bodies require members to undergo regular training to maintain their memberships, these certified professionals are expected to be fully prepared for IR 4.0 and, by and large, artificial intelligence experts.

Chung adds, “IT knowledge is no longer an option. Lest we aim erroneously, it is not how extensive the IT knowledge is (as this is available in abundance and can be acquired easily), but the ability to understand the evolution of the profession and apply the knowledge appropriately.”

Explaining that accountants must use technology in their favour to elevate companies to new heights, he gives the example of successful tech businesses that used e-platforms to achieve massive scalability and visibility within a short time, despite having owners or founders who were not IT graduates.

“In the same way, accountants should be more strategic, make sense of the vast data available and deliver services based on the twin pillars of speed and quality,” he continues.


Eliminating liabilities

When combining this piece of information with the future route of total automation for jobs that are repetitive, rule-based and involve limited or well-defined physicality, the traditional job scope of accountants is coming to an end.

Employers are bemoaning the skill gaps currently present in the knowledge of digital technologies, forcing companies to spend resources retraining and reskilling their employees.

At the other end of the spectrum, constant news reports highlight the more pressing issue of employers having difficulty finding good graduates who can hit the ground running upon entering the workforce.

These situations highlight the dire need for a new breed of accountants who can provide more all-inclusive corporate reporting, which tells less about the numbers and more about the narrative of a company.

The Malaysian education system, for one, must move towards becoming an ecosystem for continuous upgrading of skills, working together with employers, be they officials from the Government, small business entrepreneurs or industry experts from professional organisations.

Colleges and universities need to continue reviewing their course offerings so that graduates have an accurate understanding of the evolving industry while being trained to adapt to new technologies and autonomous changes at the workplace.

However, it is not all doom and gloom. Chung points out, “There are now many initiatives being undertaken by various professional organisations and associations to provide education to accountants to increase awareness of the changes taking place.

“There are efforts now by professional bodies, corporates and academia to come together to address the disconnect between what’s being studied at universities and what’s relevant in the business world.”

Given how the financial technology space has demonstrated the willingness of companies to use innovative methods, Chung is optimistic about the future as the accounting profession can not only make positive inroads but ride on the back of this momentum to accelerate the learning and adoption of technologies as the nation moves into a new era of automation.

Credit: Bryan Chung, FCPA

 

Related posts:

 

Probe on ‘Big 2’ accouting firms: KPMG and Deloitte still on over 1MDB accounts

Regulators act on complaints: MIA to name and shame errant professionals

Let me be clear, I am innocent: Jho Low


https://youtu.be/AngdNA3mtgw

Having his say: A screengrap of www.jho-low.com website which contained the letter

Rogue businessman insists he is not guilty via letter on personal website

 

PETALING JAYA – Fugitive businessman Low Taek Jho has proclaimed his innocence over allegations related to 1Malaysia Development Bhd (1MDB) in a signed letter uploaded to his personal website.

Low, also known as Jho Low, admitted that in hindsight, he might have done things differently.

“But any mistakes I made do not amount to the sweepingly broad and destructive allegations being made against me.

“Let me be clear: I am innocent,” Low wrote.

The website, www.jho-low.com, also contains legal documents related to the 1MDB case, news media articles on him and 1MDB as well as statements by Low’s lawyers.

A notice on the website said that jho-low.com was created on behalf of Low through his legal counsel to provide information to the public.

A search on the Internet archive shows that the website has been updated since 2015 but until recently only contained general information on Low.

According to the WHOIS database, jho-low.com was created on June 2, 2014.

Yesterday, the link to the website was shared extensively on social media, after the undated letter was posted.

“I only ask that everyone – courts, prosecutors, and the general public – keep an open mind until all of the evidence comes to light,” Low wrote in the letter.

The financier wrote that for the past several years, he had been subjected to a series of allegations around the globe in relation to the operations of 1MDB.

He said many of the allegations had originated from blog posts, “improper” leaks from governmental agencies around the world, or unproven allegations filed in court, where he had never been afforded an opportunity to set the record straight.

“I have been paraded in effigy through the streets of Kuala Lumpur, and photographs from my younger days plastered in tabloids across the globe.

“It has become clear that there is no platform where objective information can be presented regarding this issue – and no jurisdiction that hasn’t been poisoned by gossip, innuendo, and unproven allegations.

“This website is an effort to change that,” Low wrote.

The 36-year-old Penangite is described as a “global philanthropist, investor and entrepreneur” on the website.

A check with an official from a public affairs firm representing Low confirmed the veracity of the website.

Meanwhile, Swiss whistleblower Xavier Justo, in an immediate response, said: “The Jho Low website does not show any proof of his innocence.

“It is just a bunch of legal documents showing that he wants a few cases to be dismissed.

“It’s the way the justice system works, you can be as guilty as guilty is and ask for a case to be dismissed. It’s not proof of innocence,” he told The Star.

The former PetroSaudi Inter­national executive said he was appalled at Low’s attempts to defend himself through the website.

“Any decent person will face justice (in court) if he can prove that he is innocent,” he said.

He added that he was amazed at Low’s attempts to try to “stop the distribution of books, abuse the justice system and hire public relations officers to defend his reputation while also creating a website to tell fairy tales”.

Low’s current whereabouts are unknown; he has been speculated to be hiding in China or the Caribbean.

He and his father, Tan Sri Low Hock Peng, were charged in absentia in Malaysia last month over money allegedly stolen from 1MDB.

Last week, Low, through the London-based law firm Schillings, sought to ban the books, The Sarawak Report by Clare Rewcastle Brown and Billion Dollar Whale by The Wall Street Journal’s Tom Wright and Bradley Hope, from going on sale.

Credit: Razak Ahmad The Star/Asia News Network

Read also

 

Get-rich-quick ‘Bitcoin Formula’ exposed: Vincent Tan denies investing US$250m



 

Vincent Tan denies investing US$250m in get-rich-quick ‘Formula’

PETALING JAYA: Berjaya Corp Bhd founder and executive chairman Tan Sri Vincent Tan Chee Yioun (<<pic) has denied investing US$250 million in a project known as “The Formula” which allegedly promises huge profits and quick riches.

Tan said in a statement today said that the ‘The Formula’ is supposedly a share trading platform that allows trades executed through it to beat the stock market with an accuracy of 80% thereby allowing users to make huge profits.

“I refer to a current online media entitled ‘Vincent Tan gives back to the people with his latest project” wherein it is reported that I have invested US$250 million in a project known as “The Formula” with a wish to make Malaysians wealthy.

“I would like to categorically deny that I have made an investment in this project or that I am in any way involved in it and there is absolutely no truth in this report which I believe has been put out by unscrupulous persons to deceive the public,” Tan said.

Tan has reported the matter to the relevant authorities so that appropriate action can be taken and urged the public to take caution on promises of quick riches and not to fall prey to scams.

Tan said this is not the first time his name has been used in similar instances for the purpose of lending credibility to online investment scams.

On June 28 (see below), Tan exposed a dubious startup trading platform called “Bitcoin Formula” which used his name and doctored photos to promote its business.

An article claiming he had invested in and was promoting Bitcoin Formula, together with some photographs, was circulated on social media.

The article was accompanied by a few photographs, one showing Tan allegedly awarding a cheque for RM500,000 to Bitcoin Formula for winning the “Project of the Year” prize in a computer engineering “hackathon” in Kuala Lumpur, and another picture of him apparently speaking about Bitcoin Formula at a social media business summit.

Both pictures were in fact images altered with the use of photo-editing software and had originally been taken by theSun in March 2014 and January last year.

A check with the Companies Commission of Malaysia found that no company by the name of Bitcoin Formula exists.

Credit:  Kevin Deva newsdesk@thesundaily.com

‘Bitcoin Formula’ exposed

 

This picture of Tan Sri Vincent Tan speaking at the Social Economic Forum at the GK Enchanted Farm in Bulacan in the Philippines was doctored to appear as if he was promoting Bitcoin Formula

PETALING JAYA: Berjaya group founder and executive chairman Tan Sri Vincent Tan has blown the whistle on a dubious startup trading platform called “Bitcoin Formula”, which has used his name and doctored photos to promote its business.

It came to Tan’s attention that an article claiming he had invested in and was promoting Bitcoin Formula, together with some photographs, was being circulated on social media after a friend who saw it asked him if it would indeed be a good investment.

“How can it be a good investment when the operators have to resort to such dishonest ways like using my name in fake reports and doctored photographs to promote their business?” he said.

“I think anyone who invests in such a shady business will surely lose their money,” said Tan, who urged the public not to be deceived by such posts on social media.

The article about the company, that purports to promote blockchain and crypto technologies, claimed Tan had donated RM500,000 to Bitcoin Formula, a supposed financial startup by young computer engineers developing an efficient trading platform.

The article was accompanied by a few photographs, one showing Tan allegedly awarding a cheque for RM500,000 to Bitcoin Formula for winning the “Project of the Year” prize in a computer engineering “hackathon” in Kuala Lumpur, and another picture of him apparently speaking about Bitcoin Formula at a social business summit.

Both pictures were in fact images altered with the use of photo-editing software, and had originally been taken by theSun in March 2014 and January last year.

The cheque presentation photo was actually of Tan presenting a RM500,000 award to representatives of Dharma Master Cheng Yen of the Taiwan Buddhist Tzu Chi Foundation after she was named Better Malaysia Foundation’s Personality of the Year in 2015.

The other image was taken when Tan was speaking at the Social Economic Forum that was held at the GK Enchanted Farm in Bulacan, in the Philippines.

A check with the Companies Commission of Malaysia found that no company by the name of Bitcoin Formula exists.

Tan is apparently the latest prominent person whose name had been used by get-rich-quick scheme operators to scam unsuspecting people, and prominent tycoons like AirAsia founder Tan Sri Tony Fernandes and “Sugar King” Robert Kuok were among people whose names have been used by these scammers.

Tan also dismissed a Facebook article claiming that he will be donating RM525 million to Tabung Harapan Malaysia.

“There is absolutely no truth to either of these reports, that I believe have been put out by unscrupulous persons to deceive the public. I hope the public do not get fooled by these fake reports,” he added.


Credit:  Amar Shah Mohsen newsdesk@thesundaily.com

Related:   

Crypto Formula | Read The Review Very Carefully | CyberMentors.org.uk‎

 

bitcoin-formula-access
bitcoin-formula-scam-alert
bitcoin-formula-scam-proof

Bitcoins Formula Review – Promising Program Earns More Bitcoin …

 

Related post:
BLOCFEST www.blocfest.asia SOUTHEAST ASIA’S INTERNATIONAL BLOCKCHAIN EVENT Blockchain and beyond Brothers Hway (left) and Tze-…

 

The Damocles index by Nomura warns of fiscal tension in Malaysia, score accross coountries, the hits and misses 1996~20118


PETALING JAYA: Allowing a larger fiscal deficit and running the risk of a sovereign credit rating downgrade in 2019 could cause balance of payments stress, given Malaysia’s high short-term external debts and low foreign exchange (forex) reserves, said Nomura.

Following the reversal of fiscal reforms like goods and services tax (GST) and the removal of fuel subsidies, the new government now faces the tough choice of either cutting spending at the cost of growth, or allowing a larger fiscal deficit and the risk of a sovereign credit rating downgrade in 2019.

According to a Nomura global research report, Malaysia’s Damocles score in July 2018 was 86.9, below the 100 threshold.

The Damocles index by Nomura summarises macroeconomic and financial variables into a single measure to assess an economy’s vulnerability to a currency crisis.

The oil price slump of 2014 to 2016 was a major shock for Malaysia, one of the few net-oil and gas exporters in Asia.

“While Bank Negara initially expanded forex reserves to defend the ringgit, it eventually allowed a sharp depreciation in 2015 which boosted export competitiveness.

“Malaysia has proved resilient and its current account remained in surplus, benefiting from a diversified economy and fiscal reforms,” said Nomura.

Three countries in the region, namely, Thailand, Indonesia, and the Philippines, have a Damocles score of zero, while Vietnam has a moderate Damocles score of 35.

The Bank of Thailand is signalling policy normalisation to build policy space and reduce financial stability risks following a prolonged period of exceptionally low interest rates. This is as headline consumer price index (CPI) inflation returned to within the 1% to 4% inflation target and economy growing at potential.

Thailand’s current account surplus as a percentage of gross domestic product (GDP) has been sizeable since 2015, driven by weak domestic demand and, more recently, growing tourism revenues as well as an export recovery.

“Over this period, forex reserves rose sharply, and they are now at very favourable adequacy levels relative to both imports and short-term external debts.

“The fiscal deficit is expected to widen slightly in 2018, as the government increases spending to support populist policies targeting low-income earners, in the run-up to the election in early 2019,” said Nomura, adding that real interest rates are falling gradually and remain marginally positive, as inflationary pressures have been stubbornly weak.

Over in Indonesia, a negative terms-of-trade shock in 2014 raised the Damocles score in 2014 to 2016, but it has fallen back to zero due to Bank Indonesia’s build-up of forex reserve buffers and government reforms that improved foreign direct investment (FDI) inflows.

While depreciation pressures have risen again in 2018, BI has acted decisively with 125 basis points in policy rate hikes to date.

“We expect another 25 basis points, with the risk of more.

“Bank Indonesia maintains a flexible forex regime and a dual-intervention framework in forex and bond markets, as well as introduced macro-prudential measures, like requiring residents to hedge external exposure,” said Nomura.

The research house added that Bank Indonesia has also strengthened policy coordination with the Finance Ministry, which is implementing policies to reduce the current account deficit, while prioritising a credible 2019 budget despite upcoming presidential elections.

Sword of Damocles hangs over Sri Lanka

PETALING JAYA: Sri Lanka is at risk of an exchange rate crisis mainly due to its still-weak fiscal finances and a fragile external position.

Sri Lanka charted the highest Damocles score of 175, among 30 emerging market (EM) economies.

The Damocles index by Nomura summarises macroeconomic and financial variables into a single measure to assess an economy’s vulnerability to a currency crisis.

A score above 100 suggests a country is vulnerable to an exchange rate crisis in the next 12 months, while a reading above 150 signals that a crisis could erupt at any time.

Sri Lanka has large refinancing needs, with foreign exchange (forex) reserves of less than five months of import cover and high short-term external debt of US$ 7.5bil.

“Political stability also remains an issue, as recent resignations have weakened the government (its term ends mid-2020) and despite retaining a simple majority, complicates the task of continuing to implement International Monetary Fund (IMF)-induced reforms.

“However, without IMF support, the risk of a currency crisis would be higher,” said Nomura in its global research report.

Meanwhile, South Africa, Argentina, Pakistan, Egypt, Turkey and Ukraine are currently vulnerable to an exchange rate crisis, having Damocles scores of more than 100.

“Based on our definition, Argentina and Turkey are experiencing currency crises, while Argentina, Egypt, Sri Lanka and Ukraine have turned to the IMF for assistance, leaving Pakistan and South Africa as the standouts.

“As investors focus more on risk, it is important not to lump all EMs together as one homogeneous group; Damocles highlights a long list of countries with very low risk of currency crises,” said Nomura.

Eight countries, namely, Brazil, Bulgaria, Indonesia, Kazakhstan, Peru, Philippines, Russia and Thailand, have Damocles scores of zero.

It is notable that China’s Damocles index has maintained since dropping to 36.9 in late 2017 from 62.4 in October 2017.

The index far below the 100 threshold suggests that the risk of an exchange rate crisis in China is limited.

Nomura concurred that China’s balance of payment position remains healthy, given it has the world’s largest foreign exchange reserves at US$3.1 trillion, as of July 2018.

“However, we highlight that its pockets are not as deep as they once were, given that current account deficits at minus 0.4% of gross domestic product (GDP) in the first half of 2018 may occur more frequently, net direct investment inflows may moderate further, and external debt has risen significantly.

“Moreover, we see domestic challenges from weakening aggregate demand and other fundamental problems, and external risks from the escalation in China-US trade tensions and trade protectionism,” said Nomura.

As for India, its Damocles score has fallen to 25 in the third quarter of 2018, from 56 during 2012 to 2013.

India’s most recent currency crisis occurred in 2013 and was due to weak domestic macro fundamentals and worsening external funding conditions. Since then, consumer price index (CPI) inflation has moderated to about 4.5% in 2018 from 9.7% in 2012, as has the current account deficit at an estimated -2.5% of GDP, compared to minus 5% in 2012. Furthermore, India’s central bank has a sufficient forex reserve buffer of 9.3 months of import cover versus 6.4 in 2012.

“However, given India runs a current account deficit, it remains vulnerable to bouts of global risk aversion. Higher oil prices and portfolio outflows are its key external vulnerabilities.

“Aside from these, the key risks stem from the government turning more populist ahead of the 2019 general elections (worsening domestic fundamentals) and a sharper-than-expected domestic growth slowdown (triggering equity outflows),” said Nomura.

The Damocles index comprises eight indicators that are found to be the best predictors of exchange rate crises in the 30-country sample, in which there have been 54 crises since 1996. It includes five single indicators which are import cover, short-term external debt or exports, forex reserves or short-term external debt, broad money or forex reserves and real short-term interest rate.

On the other hand, the three joint indicators are non-foreign direct investment (FDI) gross inflows of one-year and three-year, fiscal and current account, as well as current account and real effective exchange rate deviation. To date, Damocles has correctly signalled 67% of the past 54 crises in Nomura’s sample, including the Asian financial crisis (1997 to 1998), Russian financial crisis (1998) and the 2018 EM currency crises in Argentina and Turkey.

“The advantage of Damocles lies in its objective nature in letting the data speak, not clouded by conventional misperceptions or biases based on past experiences. While the results achieved are encouraging, but given the inherent limitations of any early warning system, it would be foolish to make any exaggerated claims.

“For instance, Brazil’s Damocles score of zero implies very low external vulnerability; yet the Brazilian real (BRL) has depreciated more than 10% in August alone due to an uncertain presidential election outlook,” said Nomura. – The Star

Related:

Related posts:

Prepare Now for the Next Financial Crisis THE financial crisis affecting developing countries arrived in full-scale fashion in our regi…

 

The Asian financial crisis – 20 years later 

Trump-Washington disorder drags world down, lost humanity’s fight for survival against climate change

https://youtu.be/gEmu3Dz–bM “It would not be profitable to build the Focus Active in the U.S. given an expected annual sales volum…

From Industrial 4.0 to Finance 4.0

Be ready – financial crisis is near


Prepare Now for the Next Financial Crisis

THE financial crisis affecting developing countries arrived in full-scale fashion in our region last week when the Indonesian economy experienced shocks reminiscent of the Asian crisis 20 years ago.

With the crisis coming so close to home, it is time to contemplate what may unfold in the near future and list measures to respond to each scenario, so that we are not taken by surprise.

The agreement reached with Singa­pore to postpone construction of the Kuala Lumpur-Singapore high-speed rail (HSR) project until end-May 2020 (with Malaysia paying S$15mil [RM45.1mil] in cost) was an achievement. It allows us a gap of two years before having to meet the mega project’s large expenses.

The next couple of years will be crucial, as the country will be in the midst of managing the “perfect storm” of servicing the trillion-ringgit government debt and preventing the government deficit from ballooning, while facing the challenges of the emerging global financial crisis.

In this tight situation, every billion ringgit counts; indeed every single ringgit counts.

As more discoveries are made of missing money, whether due to the 1MDB scandal or unpaid tax refunds, there is increasing pressure to save money and cut costs to avoid wider deficits.

So the HSR’s two-year deferment helps a lot. It may be like kicking the can down the street, but hopefully, the situation will improve by the end of the two years to allow the can to be picked up, especially if during the period, ways are found to cut the overall cost of the project.

Other projects too have to be scrutinised. Besides the East Coast Rail Link and Trans Sabah gas pipeline projects, there are many other projects whose costs have to be examined, and whose implementation can be postponed or cancelled.

Besides the scourge of overpricing and kickbacks, there is the over-riding concern that a financial crisis has to be averted.

Indonesia’s Energy Minister last week announced that energy projects worth US$25bil (RM103.64bil) and representing half of President Joko Widodo’s grand electricity programme, would be postponed or restructured. This is to save US$8bil (RM33.1bil) to US$10bil (rm41.45bil) on imports for the projects.

Indonesia is also raising tariffs to 10% on over 1,000 goods in a move to reduce the import bill.

These are some measures the country is forced to take as its economy enters full crisis mode. It could even face a meltdown of the 1998-99 scale. The rupiah fell to almost 15,000 per US dollar, the lowest point since the 1998 crisis.

Indonesia is vulnerable to a financial crisis due to its dual deficits (in the current account and government budget), large external debt and high foreign ownership of equity and government bonds.

Indonesia is caught in a vicious cycle, which is typical when financially liberalised countries follow orthodox fire-fighting policies. When the markets perceive that the external reserves could be insufficient to pay for imports, service debts and absorb potential capital outflows, the currency depreciates.

The perception sparks a self-fulfilling prophecy. The fall in currency makes it more difficult for the government and companies to service foreign loans, and also prompts investors to pull out their money.

In such a situation, the government raises the interest rate to incentivise investors to retain their money in the country. Indonesian interest rates have risen by 1.25 percentage points since May.

However, the side effect is that homebuyers and companies find it more difficult to service their mortgage and business loans. Credit slows down, and so does the economy. This in turn causes the currency to drop further, prompting more rounds of interest rate increases, which lead to loan defaults and bankruptcies.

The economy goes into recession, leading to more capital outflows, including by local people. The currency drops again, recession deepens, and the cycle continues.

Indonesia is still at the start of this cycle. Hopefully it will find the policy tools, including unorthodox ones that work, to avoid a long stay in the spiral. But Indonesia is by no means alone. Argentina and Turkey are deep in their crises, and more and more countries are suffering the contagion effect, including South Africa, India, Iran and the Philippines.

Following the 2008-09 global financial crisis that especially hit the United States and Europe, many hundreds of billions of dollars rushed to emerging markets, including Malaysia, in search of higher yields. The liquidity was created by quantitative easing (government pumping money into the banking system) and low interest rates in the US and Europe.

Now the funds are leaving the emerging economies and returning to the US. This is due to the US policy reversing to quantitative tightening, the rise in its interest rates, and fears of an emerging market crisis and a worsening trade war.

Developing countries vulnerable to currency decline, a pull-out of funds and a crisis are those with significant current account deficits, government budget deficits and debts; low foreign reserves; large external debt; and high foreign ownership of local bonds and equities.

Malaysia is so far safe but it is wise not to be complacent. It is not easy to escape contagion once it spreads.

A few warning signs have appeared, such as a narrowing of the current account surplus and significant portfolio investment outflows (both in the second quarter), and a weakening of the ringgit, besides the larger than previously reported government debt and the need to prevent the budget deficit from increasing.

The old Scout motto, “Be Prepared”, comes in handy at times like this. It is good to prepare now for any eventuality, so as to avoid being caught by surprise.

Credit: Martin Khor Global Trends The Staronline

Related:

Singapore court allows return of RM46mil 1MDB, SRC International funds to Malaysia
Related posts:

The Asian financial crisis – 20 years later 

Trump-Washington disorder drags world down, lost humanity’s fight for survival against climate change

 

Liberating the Malay mindset, the right way to speak out


 

 

The right way to speak out

I REFER to the article “The real Malay Dilemma” ((The real Malay dilemma: race, religion & politics, Siti Thoughts, Sunday Star, Aug 26). Siti Kassim made her details as clear as they can be but not without error in her bewildering opinion on the subject.

Siti’s observation is near faultless and I wonder if she is sincere enough to defend the cause of changing the so-called Malay mindset. Firstly, why publish such a strong, emotional and provocative article in an English newspaper if she insists that she has studied her “targeted audience” well enough?

Learn and appreciate the views of a different mindset before telling everyone to change. According to Bakri Musa, a mindset refers to the outlook in or philosophy of life. It is a set of ideas, attitudes and opinions that we – as individuals or members of a group – share of reality, or of what we recognise to be reality.

Neurologically speaking, a mindset is the pre-existing neural pattern in our brain; conceptually, it is our mental hypothesis of reality. Having said this, the mindset is not really a result of the religion’s influence but rather of their past experiences.

It is common to see differing mindsets among people in other countries too, but why exactly wouldn’t anyone in those countries make a big fuss about it?

Malaysia is a progressing population and some of its characters do not wish to portray their advancement as a double-edged weapon. We need to be thoughtful and informed about it.

Not only is it the wrong thing to say but it is also the wrong way to do it. We understand that Islam is a way to help ourselves to improve. There is no flaw in Islam when we talk about civilisation; Islam is civilisation. It was a tried-and-true Islamic value that brought the ancient world to its golden age during its peak.

Some individuals who have a lazy understanding of Islam will describe its teachings as backward, prohibitive and jumud; and they repeatedly use Islam as an excuse for many problems. This unceasing stream of vitriol towards Islam is nothing new.

A change in government will not change the people’s mindset. The May general election did not bring about a change in mindset but rather a choice of two governments, one less benign than the other.

It is not surprising that the so-called liberal Malays are accused of being blasphemous because the accusers are not able to answer or defend a particular issue brought up by repugnant personas. With this in mind, if we let it continue, Malays will be further divided as liberals and conservatives.

Majlis ilmu, seminars and tahfiz schools are not harmful; on the contrary, they are as good as TED Talks if we want them to be. Let’s see them in a different light. Being obsessed with such things is not harmful. We are in dire need of getting the right contents and ideas to share – and we have many of them.

Why would we want to waste such golden opportunities for getting the right message across? If we need to tweak the content to make it more conducive, multicultural or suggestive, we will do better as multicultural societies.

If we can encourage the Malays to ask the right questions about development and their contribution as a Malaysian community, and ultimately shape the demand for knowledge, then every ustaz, ustazah and religious teacher will have to provide the right answers.

But why wouldn’t the Malays ask the right questions? Maybe that is when the fixed mindset comes into play. Rather than putting these forums in a poor light and defining them as the reasons for the nation’s problems, there are more effective ways to bring the change via the same existing ground.

We do not want to compare Malaysia with Iran, Saudi Arabia, or even Switzerland for that matter. There are different dynamics in Malaysia, and even Aceh has its own uniqueness. Malaysia will never be like those countries and those countries will never be like Malaysia.

On the same note, we do not need to model Malaysia on other Muslim-majority countries, good or bad. We should stand on our own and set a new precedent for other Muslim countries to follow.

We are not going to focus on religion solely for the afterlife but as an equally important design to survive and compete globally together as a nation.

Any issues found in other Muslim countries are coherently found in non-Muslim countries: bad governance and corruption are universal. We can uphold syariah law and be 100% Islamic, yet there will still be people who circumvent the law to line their pockets.

We are moving towards changing the paradigm of Malays being supplicants. Most Malays are ready to lead the change. The only thing is they are not singing loudly enough. So who or what is holding them back?

Malays can’t dispel the stereotypical perception others have of them. And we always make efforts to maintain our self-affirmation, not surprisingly buttressing the stereotype in the process.

Some Malays fear more the threat of being seen as a stereotype rather than actually being the stereotype, and this could be one of the reasons why we see gaps in streamlining the grand purpose of understanding Islam among the progressive Malays.

Being apologetic for the bumiputra policy is not considered appropriate as it was properly studied and the implication was well understood.

Our forefathers would have known the long-term divisive consequences, and this is particularly poignant given the non-bumiputra’s outstanding contributions in developing the country.

However, all Malaysians must accept that such a policy is the right way to help the nation. Malays have already become aware of the reasons for such policies and of how the opinions of some of them are being manipulated by politicians to stay in power. We just need to know when and where to make a healthy distinction.

I celebrate Siti’s righteousness and her gifts but she has to be careful that she uses them wisely and avert some scenarios that will hamper everyone’s efforts.

If maybe one day Siti could share the good things she likes about Muslim and Malays, and share these as an agent of change, there would definitely be more who would listen to her and be inspired, I guarantee it.

Being an activist without having an action plan to change the people’s mindset is not going to work.

IKMAL BAHARUDIN Kuala Lumpur, The Staronline
Related posts:

The real Malay dilemma: race, religion & politics messed up!

 

Are Malays powering the nation ?

Liberating Malay mind, unnecessary hoo-ha and nonsense!

Liberating the Malay mind

Open-minded people are usually more tolerant, and when you are tolerant you are also moderate in your actions and behaviour.

Dr. M. Bakri Musa Speaks His Mind:Liberating the Malay Mind

>>>> ” 90% of the Doctorates held by Malays is not worth the toilet paper on which it is printed because it was all produced by some internet degree mill for a fee and  worse still is when you hold them to a discussion or debate , the thoughts that emanate from the area between their ears is so embarrassing you want to run away and jump off a cliff but yet they proudly parade their Doctorates with pride ”

>>> ” 90% of the Malay wealth is not from the fruits of their labour as great entrepreneurs , like the Chinese , but rather the hand-outs of their political patronage and cronyism and there is nothing to be proud of the huge mansions and expensive cars and life-style , because they are nothing but the produce of utter corruption at stealing the wealth of the people’s blood , sweat and tears , and yet , without shame their spouses and children flaunt it like they earned all these through intelligence and hard-work .

 

Liberating Malay mind: Shed ‘excess baggage’ of privileges !

 Malays must shed ‘excess baggage’ of privileges, says Rafidah 

Malaysia’s Vision 2020: Falling apart with alarming speed; Dr M is creator and destroyer, said Musa

KUALA LUMPUR: Former Deputy Prime Minister Tun Musa Hitam said Malaysia’s Vision 2020 objective was “falling apart” with “alarming speed”, and he blames Tun Dr Mahathir Mohamad for it.

In his keynote speech at an event to mark the sixth anniversary of the Institute for Democracy and Economic Affairs (Ideas), Musa said this was because the former premier did not train leaders but instead chose to retain and train followers instead.

“It is ironic that Dr Mahathir’s vision is now certain to fail because of Dr Mahathir himself.

Investing in minds to stop brain drain

Beijing lures back foreign graduates with lucrative offers

 

New Malaysia should push for meritocracy

 

The Meritocracy Paradox
%d bloggers like this: