Penang now in good hands, the No.1 State of Malaysia

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Penang now in good hands

In light of the recent baseless attacks and statements by the Opposition in Penang, Kedah and selangor towards the Pakatan Government, I would like to share with you 12 points on the achievements of the Penang DAP- Pakatan Government.

The facts and figures below were obtained from the Penang State Government.

1) Penang tops in investment in Malaysia attracting almost RM 12.2 billion investments or 26% of the overall investments in Malaysia. A historical success for Penang .

2) Penang was praised by the National Auditor General for being the state with the best financial management from 2008-2009

3) Penang tops in reducing the crime index for 2010 by 27%. It is the highest among all states in Malaysia .

4) Penang is the pioneer and leading state in green initiatives moving towards becoming the first green state in Malaysia .

5) Penang is the only state in Malaysia to be praised by Transparency International for the state government’s open tender and CAT governance based on competency, accountability and transparency.

6) Penang contributes two -thirds of the medical tourism in Malaysia .

7) Penang is the 1st state to give out RM100 annually to senior citizens above the age of 60yrs old. The state government commits to wipe out hardcore poverty and ensures that every family`s income is at least RM 500 a month.

8) Penang has the highest increase of Air-Travelers (30%) in comparison of other Malaysian airports in 2010.

9) Penang has zero unemployment rates and is currently having shortage of workers.

10) Penang state Government guarantees the freedom and upholds the human rights of the people through the freedom of information (FIO) Act and erected the Speaker`s Square at esplanade. The 1st in Malaysia which gives the people the freedom to voice their opinion.

11) Penang is the most committed and active in protecting, preserving and promoting heritage conservation such as the UNESCO world heritage city of George Town .

12) Penang is ranked as the most livable city in Malaysia.

K.Sudhagaran Stanleystanley_sudha@yahoo.com




Penang Is The No.1 State


PenangIs The No.1 State For Total Capital Investments In 2010 Attracting RM 12,238 Million
 
Penang  Is The No.1 State For Total Capital Investments In 2010 Attracting RM 12,238 Million, Up Nearly 5 Times As Compared To RM 2,165 Million In 2009 And Comprising 26% Of Malaysia’s Total Investments Of RM47,177 Million For 2010.

According to Malaysian Industrial Development Authority (MIDA), Penang is the No.1 state for total capital investments in manufacturing projects in 2010 attracting RM 12,238 million, up nearly 5 times as compared to RM 2,165 million in 2009. This is the first time in history that Penang has topped the list of investments amongst all states and is the highest investment received ever.

This success is due to the hard work by the 1.6 million Penangites together with state government leaders and agencies as well as federal government agencies from MIDA and the Ministry of International Trade and Industry.

Penang ’s investments were derived from new investments of RM 2,846 million and expansion by existing investors of RM 9,392 million. Clearly these figures only captured those industries that sought incentives from MIDA and not the new or expansion investments that did not require grants from the federal government.

The significance of this historic achievement is highlighted by Penang contribution of RM 12,238 million to Malaysia investment constituting 26% of Malaysia ’s total investments of RM 47,177 million of 2010. Yesterday Minister of international trade and industry Datuk Seri Mustapa Mohamed announced a 45% increase in Malaysia 2010 investment performance from RM 32,637 million in 2009 to RM 47,177 million in 2010. Penang moved up from No. 4 in 2009 to Nol 1 in 2010, increasing by 465% from RM 2,165 million in 2009 to RM 12,238 million in 2010.

The 465% increase in investments in Penang reflects confidence in the energy, expertise and entrepreneurship of our human talent. Further this is an affirmation of the state government’s strategy of promoting Penang as a location of choice based on 7 critical success factors(CSF) of growth:-

1. Ready availability of skilled human talent;

2. Effective and efficient supply chain management;

3. Competent and reliable logistics and communications hub

4. Strong Intellectual Property protection;

5. Good governance and effective leadership;

6. Building creativity and innovation in science and technology; and

7. Livable and intelligent city.

Penang believes that CAT governance of competency accountability and transparency has also built confidence that a government with integrity can make things happen and both execute and deliver. 

Penang was not only the best performer in managing state finances in Malaysia according to the Auditor-General Report for 2009 but also received accolades for anti-corruption from Transparency International.

As the newly-crowned champion amongst all states in attracting investments, the Penang state government wishes to congratulate the people of Penang . With the best financial performance, the best state in clean governance, the best green practices and now the top performer in investments, Penangites can now proudly say “Penang Leads!”.

LIM GUAN ENG
Press Conference Statement By Penang Chief Minister In Komtar, George Town On 19.1.2011
www.sun2surf.com.my

In Conversation with Penang’s Chief Minister: Playing Survivor Every Day*

Almost three years after taking over the Penang government, Chief Minister Lim Guan Eng is firmly in the seat. On New Year’s Eve, Lim spoke to Himanshu Bhatt of his experiences as a self-confessed “Survivor” and about the state government.

On Lim Chong Eu

Q: HOW was your relationship with former chief minister Tun Dr Lim Chong Eu after you assumed office?

A: Tun Lim said he felt it would be very challenging for me, as it was for him … I think he felt I was facing the same circumstances and conditions as he experienced when he won power in 1969.

He advised that it was important to take charge. And I agree that we have to take charge. Take charge not by compulsion, but by example and by persuasion. He felt that it was important that we must be fully in command, to be in control of all aspects of government. I told him that I don’t think that I am that capable. So I rely on my trusted comrades. For instance, he said I should also handle local government. I said I can’t cope. So I leave it to Chow (Kon Yeow).

On Being “Dictatorial”

Q: Your political opponents have accused you of not being consultative, of being obdurate. They have even used the word “dictatorial”.

A: In a way that is a sort of back-handed compliment. They even try to portray me as a future DPM or PM. I have said many times – I have no higher ambitions. I think there are many people more qualified than me to be the prime minister.

I am happy where I am now as the CM, and I want to do the job as best I can. I don’t think I can do it alone. I need the collective effort of everyone, every person on the team. They are just trying to break up my team, but they won’t succeed.

I mean when I was away for a week, the government functioned. So it’s the system that works that matters. My councillors are also doing their job. The main thing is that the system overrides all. Once there is a system failure, it shows that your leadership, your management skills are questionable.

Nowadays when investors come, they not only look at you as a leader but at your team. You may be able to convince them personally, but can you convince them collectively? If you can’t convince them collectively, I don’t think they will put their money here.

When they come here, they do not just do a due diligence on you, they also do a due diligence on the team. I can say to them, you can call me anytime. But you know-lah they are also protocol-guided. They won’t just call anytime. They would prefer to call somebody lower down that they can talk to and interact with, that they can get things done with.

Biggest Challenges

Q: There have been challenging periods.Every day is a challenge. Every day is a survival exercise. It’s like experiencing Survivor – you know the TV series – every day. What do you reckon have been the biggest challenges in power?

A: Some of these civil servants, little Napoleons-lah. Those under the state government’s watch we can deal with. Those under federal, we are powerless. I think that has been disconcerting.

Number Two has been lack of funds to carry out our programmes. Number  Three is the lack of cooperation from certain ministers.

Federal-State Relations

Q: What are main challenges in federal-state relations? How do you see relations between the federal government and the Pakatan Rakyat states evolving in the next year or so?

A: I would say there are always federal leaders who are intent on having a workable, cordial relationship. But they are torpedoed and sometimes sabotaged by those who are gung-ho in warring with Pakatan states, regardless of national interests. So we are hopeful that cooler heads will prevail. Cooler, saner and more sober heads will prevail at the end of the day.

Because for Penang we are the second most important state. We provide nearly 30% of the country’s exports. We provide a substantial source of revenue. We contribute 70% of the medical tourism receipts in the country. And we are a major port, major tourist destination. And of course we are, I would say, the most dynamic E&E (electronics and electrical) cluster in the world.

So can you ignore Penang? If Penang loses, Malaysia loses. If Penang wins, Malaysia wins. So it is in the best interest of Malaysia that Penang succeeds. And that’s why it is short-sighted and counter-productive … if you want to victimise, punish or marginalise Penang. It is in everyone’s best interest that we work together for the benefit of Malaysians.

I mean whatever their (voter’s) choices, you have to respect them. This is democracy. If you want to punish the state government, you are also punishing the people for exercising their democratic choice of government. And that’s wrong. That is not only wrong, but it is immoral, unethical and downright evil. And we have contributed. All the tax receipts you take, we don’t get a single sen back. So far, we got only 3% of what we paid.

Q: We saw the prime minister coming to officiate at the expansion of the Penang Airport. Interestingly enough, he said that the federal government is allocating funds for Penang to help make it a regional economic hub. How do you look upon that?

A: Of course, I welcome the suggestion. And we are still waiting for more details. So I think the devil is in the details. Unless this is forthcoming we are still waiting … And waiting, and waiting. (laughs).

The Information War

Q: I have been observing the war on information (between BN and PR). We are not doing very well on that … I think we can do more. You have been trying to penetrate the ground with your own publications. Is it reaching the masses?

A: It is. They get at least an explanation from the state government. Whether you agree with it or not, at least there is an explanation.

Penang Port

There are reports that the Penang Port’s privatisation has been decided. Are you disappointed that the Penang government’s formal bid to take over the port may not succeed?

A: I have written to the prime minister. Finally, of course, we have to respect the decision made, because they are the regulators. But as long as it complies with international best practices and transparency guidelines – by ensuring that you get the best price for the best quality, and that Penang Port would be able to be a truly international port, fully benchmarked against international best practices and be the premier port in the northern region – we will be able to live with it. That is our primary concern.

If it’s granted to Syed Mokhtar (Al-Bukhary), for instance, is it the best bid? Was there an open tender? If there was an open tender, was that the best bid, according to international norms and best practices? If it is so, we can live with it. Our concern is that it may not be so. Even though we may be disappointed by not succeeding, we will be able to live with it if it is the best bid. If the bid is better than ours, why not?

Q: There were concerns about the impact privatisation would have on ticket prices of services like the ferry which is largely absorbed by Penang Port. How much would privatisation affect not just the shippers but Penangites who use the port facility?

A: According to international best practices, the interests of Penangites must also be taken into account. The iconic ferry service is identified with Penang, the heritage of Penang, the soul of Penang. It cannot be stopped. It cannot be taken away.

Any attempt to scale down or remove the ferry service will be opposed vigorously by the state government. We are even willing to take it off their hands, if they don’t want it. Give it to us, we’ll handle it.

Ties with PAS

Q:What about relations among Pakatan partners in Penang?

A: I think they are good. Grassroots are even stronger.

Q:There are concerns that the relationship between DAP and PAS, although working well, may not continue in the long-term, with divergent views on secularism and Islamic governance. How do you respond to this?

A:Those who say it won’t work in the long-term don’t want us to work in the short-term and medium-term. That is why they say it won’t work in the long-term. But so far it has worked, whether in Penang or in other states. And despite all the tensions and the pressures, we have continued to be bound together.

Even on the use of the word Allah, PAS has come out with a strong stand. Since it can be used in the Middle East, there is no monopoly on the word. It should continue to be allowed to be used by Christians in the Bible, as in Indonesia.

There have also been some remarks that you are “bending over backwards” in policies on Islamic issues, like giving extra allocations, in a way that even the previous government was not doing, for the sake of appeasing PAS and the Malay-Muslim masses.

Q: What do you mean by “bending over backwards”? If you think that bending over backwards for justice, for integrity, for good governance, accountability, and doing what is right is immoral, then so be it.

A: We must not just do the right thing. We must do things right. So if there is a need and basis, we have to give necessary approvals. What’s wrong with it? And this can only be done if you have a strong budget. That’s where good governance comes in.

We are also giving money to Tamil schools, Chinese schools, mission schools. Are we saying we are denying them? No. We also build school for Azad (Tamil school on island). We also build Islamic schools.

Penang State Finances

Q: In terms of the state’s finances, what are the biggest expenditures that you need to focus on this year?

A: Land acquisition will be the biggest expenditure. We are talking about affordable housing and future industrial development for both the island and mainland.

Q: In terms of revenue?

A: Basically our land premium, quit rent. These are main sources of revenue.Since the implementation of the open-tender exercise you can basically see the expenditure having become much more consolidated and tighter.

Leaner. Meaner … meaner in the sense that there is line-item accounting, justification for every sen spent. That’s why it’s meaner.

Leaner, meaner and cleaner … It will be leaner by cutting out the unnecessary frills. It will be meaner in that we want to ensure that every sen is accounted for. You offer this material, you must provide that material. No substitute, unless it is justifiable, and then you must give some recompense. And cleaner in the sense that there is no hanky-panky.

You can see the results. We had budget surpluses for the last three years. I think no other state has that. Even though we projected deficits, so far we have revenues. Even this year (2010) we will have a small surplus. We were projecting a deficit of around RM80 million. But I think we’ll get a surplus. Lean, mean, clean accounting. LMC.

Decision Making

Q: When it comes to making tough decisions, is there anyone that you consult or get advice from?

A: We consult all the relevant key personalities … Anwar (Ibrahim), my dad (Lim Kit Siang), Karpal (Singh). Definitely, we do consult. And they give their input.

Eviction Crisis

Q: You have a massive headache in Jelutong and other places, because of the massive eviction of residents on private land.

A: When you talk about the eviction exercises, they are not only the Malay kampung. Out of the eight villages affected in Jelutong, six are Chinese. That’s 75%. So it’s not a Malay issue, but you know lah how the press plays it up. They don’t see the 75%. They just see the 25% as being 100%. So it’s become racially-tinged. And that’s very sad.

Civil Servants

Q: What about the civil servants in the state? Do you think the Pakatan government has been able to garner sufficient loyalty?

A: That has been our greatest challenge, and will remain our greatest challenge. If you want to transform Penang to be an intelligent and international city, you have to reform the civil service. No two ways about it. You have to get the civil service to adopt international best practices, and adapt themselves to international benchmarks. Otherwise you will not succeed.

It’s a challenging process. We have to do our work daily. It’s a real grind. We grind it out every day. But I believe that the civil service is beginning to see our sincerity and our seriousness to bring better service to the people. To bring change, to improve the lives of the people, and to make a difference.

When we say we travel economy, we mean it, for domestic flights … You want to show that you mean business. And then our anti-corruption measures are effective. You cut down waste, you cut down kickbacks.

And we are praised by Transparency International for CAT (Competency, Accountability, Transparency) governance. This is the highest accolade that any government can get.

Socialism

Q: I had made a comment last year that the state policies under the DAP-led government, particularly in terms of welfare, seem to be tinged with modernist-socialist elements. Am I on the mark?

A: (laughs) Social democratic inclinations-lah. When DAP was established in 1967, the Setapak Declaration registered it as a Democratic Socialist entity. Now we have changed it to Social Democracy … From “each according to his own” to “each according to his needs”. So while we recognise that growth cannot be balanced, development must be given for all.

So there is no contradiction there. We can allow unbalanced growth, but we must ensure that the benefits of it must be distributed and reach everyone.

At the same time, when we talk about social democracy, it is basically a continuous reminder to us that while we must be optimistic in action we must be pessimistic in thought.

And I think that the safety-net factor, that we try to make sure everyone has a stake in the fruits of economic success, if any, I think that would at least give everybody an equal stake. You are referring to the hard-core poverty alleviation scheme where the state tops up a family’s income to RM500 a month, and the Senior Citizens Appreciation Scheme.

We don’t have much money, but we can give RM100 to every senior citizen. It’s an anti-corruption dividend. I think that message struck. Because we are clean, we are able to give money to you … And you know the money we spent on upgrading public flats, despite them owing so much rental and maintenance fees.

Georgetown’s City Status

Q: You start off the New Year by celebrating the 54th anniversary of George Town as a city. The Queen of England had signed a charter in January 1957 but the Housing and Local Government Ministry insists that George Town is not a city. What do you hope to achieve by this commemoration?

A: I say call a spade a spade … We are trying to resuscitate, resurrect the original status of Georgetown as a city, the first city in Malaysia – something we should be proud of. And it’s given in a royal charter by the queen. So we should maintain that status.

After all, in the laws anything that is promulgated by the previous colonial government still remains in extant as it is. So why not Georgetown as it is? The integral aspect of declaring Georgetown as a city is to maintain its integrity. As a heritage city which is recognised by UNESCO. I think that integrity is important.

Aspirations

Q: You have said that Penang will keep its options open about dissolving the state assembly if Parliament dissolves early. What do you hope to achieve if you stretch until the maximum period (2013)?

A: The main thing is to make these aspirations operational. I think that would be the key aspect. That means that you deliver and implement. You talk about open tender, it’s in operation. You have seen the results but you have not really seen the flower of it. You have only seen the green shoots.

Because what we want to see in Malaysia and Penang is that every one must feel that they can be as good as they want to be. You should not tell people that they cannot be better because of the colour of their skin. Or they do not deserve equal rights because of the colour of their skin. Or that they are not really Malaysians in the full sense of the word because of the colour of their skin. Doesn’t make sense.

And I find it most distressing that they can keep on telling children and adults, that you cannot be the best, that you cannot realise your potential, not because of anything else but because of your background. I think that is ridiculous. Is that the type of country that we want? Where these people who preach the message of hate, of division, of anger and resentment, where they succeed in telling our children that they cannot be as good as they want to be. Nonsense.

At the same time Malay kids are told that they need this help because they are not good enough. What type of message is that? You are giving them an inferiority complex. On the other hand you cannot be as good as you want to be because of the colour of your skin. Now that is really distressful. It’s not just sad, it’s outrageous.

2011 Chinese New Year Message by Lim Guan Eng

Let us embrace the future by embracing every Malay, Indian, Chinese, Kadazan and Iban as Malaysian brothers and sisters, Malaysian sons and daughters In the New Year Of the Rabbit, DAP wishes all Malaysians a peaceful, harmonious and prosperous new year. DAP also expresses our condolences and sympathies to those who lost loved ones and suffered losses in the massive floods affecting Johor, Negeri Sembilan and Melaka. To attain peace Malaysians must stand united and reject those who wish to divide us by preaching racial and religious hatred. If we want to benefit from equal opportunities and realize our human potential we must stop extremists from continually degrading others as inferiors so as to uplift ourselves. We can only achieve harmony together. Despite our differences and diversity, Malaysians can make our common aspirations of freedom, justice, democracy and truth come true if we remember key values. That it is not who we are that is important, but what we are that is important; not the colour of our skin that is important but the content of our character; and not our past ancestry that is important but how we connect with the present and with each other to face the future. We can only be prosperous together. The time has come to focus on the economy, in employment, education and business opportunities as the conditions for prosperity. We must build human talent and be performance-based. The time has come for Malaysians to choose carefully. Only a two-party system can ensure peace, harmony and that Malaysia's rich natural resources benefit 27 million Malaysians. A two-party system requires a strong opposition which can not only deny BN its customary two-thirds majority but also able to form the government. For those who say that PR do not know how to govern, the 4 PR states of Penang, Selangor, Kedah and Kelantan have proven our ability by beating the other 10 BN states by attracting RM25 billion in investments comprising 53% of Malaysia's total investments of RM47.2 billion in 2010. For the first time in history, Penang is now the new champion of investments in Malaysia, coming out top in 2010 with RM 12.2 billion. Malaysians can not compromise on corruption. Too much have been lost. The shocking revelations by the US-based financial watchdog Global Financial integrity of RM 888 billion illicit capital flight from Malaysia between 2000-2008 cost is shocking. This means that every Malaysian man, woman and child have lost RM 33,000 each over 9 years! Whilst our Royal Malaysian Navy commandos are heroes for their successful capture of Somali pirates in international waters recently, DAP regrets that land "pirates" are allowed to roam freely in Malaysia. There is no reason why under the Economic Transformation Program, 19 entry point projects require RM 67 billion in investments to generate 35,000 jobs. In other words, almost RM2 million is required to create a job! This is ridiculous and only shows the extent of leakages in the economy in the form of inefficiency, wastage and even corruption. Contrast this to the number of jobs created from total private investments for Malaysia in 2010. From a total investments of RM47,177 million in 2010 will help to generate 97,310 jobs or RM 485,000 for each job. Only an economy free from corruption can we ensure that the people prosper and benefit. Let us embrace a future free from fear and cronyism. Let us embrace the future by embracing every Malay, Indian, Chinese, Kadazan and Iban, as Malaysian brothers and sisters, Malaysian sons and daughters. Then only can we grow together, learn together and enjoy the success together.

Never overstay, a lesson from Cairo, Voice in Egyptian Democracy !

ON THE BEAT WITH WONG CHUN WAI

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We have our fair share of politicians who should have called it a day some time ago.

IT’S a disease that affects many ageing politicians. They refuse to let go and cling on to their powers, believing that they are indispensable, possibly even invincible, and that chaos would result if anyone else were to take over their jobs.

But a defiant Egyptian President Hosni Mubarak has finally given up despite his stubborn stand barely 24 hours earlier, when he told the people that he would not allow himself to be forced out of office.

He repeatedly said over state TV that he would “not leave this soil until I am buried underneath it”, and reminded his listeners that “I never sought false power or popularity. I am certain that the majority of people are aware of who Hosni Mubarak is”.

We don’t know what his cronies have been telling him but a majority of the people who gathered at Tahrir Square over the past two weeks certainly knew who Mubarak was.

They wanted him to go. They had already grown tired of his leadership and irrespective of what he has done for Egypt as a war hero, they were not going to miss him.

Getting rid of Mubarak in this arguably short, bloodless revolution is the easy part. No one is clear as to what will happen next, however.

For the time being, the Egyptians are just jubilant that they have managed to get rid of the man they regard as a despot.

Mubarak has passed the baton to his deputy, Omar Suleiman, who is said to be another hugely unpopular figure. He is regarded as being too close to the United States and Israel, and has been accused of being a CIA agent.

But the transition, or Mubarak’s resignation, could not be carried out until the United States had accepted someone they were comfortable with. In this case, it was Suleiman.

In the early days of the uprising, the Obama administration had stood behind Mubarak.

The American media, including CNN, seemingly took their time to cover the unfolding historic event.

US President Barack Obama himself at first suggested that Mubarak should go, and then reversed his stand, saying that the Egyptian president should remain in office until September when elections would be held.
Now, US Secretary of State Hillary Clinton has thrown her weight behind Suleiman.

There are fears across Europe that with Mubarak gone, Islamist groups such as the Muslim Brotherhood will take over the leadership, which would be disastrous for their geo-political interests.

French President Nicolas Sarkozy reportedly expressed his concerns that it might turn into an Iranian style revolution. He was quoted as saying: “I hope with all my heart for Egypt’s nascent democracy that they take time to create the structures and principles that will help them find the path to democracy and not another form of dictatorship, religious dictatorship, as happened in Iran.”

Such fears are not entirely unfounded.
During the Iranian Revolution, the people ousted the Shah of Iran, which then saw the return of Ayatollah Khomeini, who had been in exile in France, to take over the leadership.

Decades later, the people who had celebrated the fall of the Shah must be thinking differently about what they had wished for.

As the saying goes, be careful what you wish for. They had dumped a corrupt monarchy only to trade it for a repressive, theocratic regime. Democracy is now regarded as a Western concept that is unsuitable in the religious structure of their country; and when the name of God is invoked, not many of the faithful would dare to challenge the men in religious cloaks.

Many liberal and talented Iranians, unable to stand the choking religious-political make-up of their country, have left their once moderate homeland for Europe.

As of now, we are still unclear where Egypt is heading. Will the United States and Europe prop up the non-credible Suleiman or will the army generals call the shots until a genuine presidential election is called this autumn?

One thing is for sure, though. No one – whether it’s Suleiman, the army or the Islamists – should ever take the people for granted.

They have gathered by the thousands demanding reforms and, having succeeded, they would do so again if they have to.

They know they can mobilise themselves. As some have correctly said, for the first time a people’s revolution has taken shape and succeeded via SMS, YouTube, Twitter and Facebook.

Times have changed but, unfortunately, Mubarak did not notice the Internet Generation. Perhaps he was arrogant or was simply out of touch.

Mubarak is now on retirement at the seaside resort of Sharm el-Sheikh whereas Tunisia’s ousted president, Zine El Abidine Ben Ali, has run off to Saudi Arabia. Many Arab leaders must be having nightmares now.

Despite their horrendous human rights records, with elections non-existent in their countries, they , the Middle East countries, have escaped world scrutiny because they are oil producers and allies of the United States. So the US media looked the other way, preferring to land their punches instead on China, an economic rival.

Let’s not look far. In Malaysia, we have our fair share of politicians who should have long ago called it a day and left to spend their time doting on their grandchildren.

But they are still around, insisting that their work has not been completed. They are there on both sides of the political divide.

The Egyptian lesson is for all. Never overstay in politics – people will get sick and tired of you.

Protesters Call for Voice in Egyptian Democracy

Associated Press

Feb. 12: Egyptian army soldiers surround an entrance to Tahrir Square, Egypt. The main coalition of youth and opposition groups says it will end its protest in a central Cairo square after they succeeded in ousting longtime authoritarian leader Hosni Mubarak. But the groups say they will call for weekly demonstrations to maintain pressure on the ruling military to implement democratic reforms. (AP)

CAIRO -- On Egypt's first day in nearly 30 years without Hosni Mubarak as president, its new military rulers promised Saturday to abide by the peace treaty with Israel and eventually hand power to an elected government. Protesters, still partying over their victory in pushing Mubarak out, now pressed for a voice in guiding their country's move to democracy.

The protesters' first act was deeply symbolic of their ambition to build a new Egypt and their determination to do it themselves: Thousands began cleaning up Cairo's central Tahrir Square, the epicenter of their movement. The sprawling plaza was battered and trashed by 18 days of street battles and rallies by hundreds of thousands.

Even as thousands flowed in to celebrate, broom brigades fanned out, with smiling young men and women -- some in stylish clothes and earrings -- sweeping up rubble and garbage. Others repaired sidewalks torn apart for concrete chunks to use as ammunition in fighting with pro-regime gangs. Young veiled girls painted the metal railings of fences along the sidewalk. "Sorry for the inconvenience, but we're building Egypt," read placards many wore.

"We are cleaning the square now because it is ours," said Omar Mohammed, a 20-year-old student. "After living here for three weeks, it has become our home ... We're going to leave it better than before."

A coalition of youth groups that organized the protests issued their first cohesive list of demands for handling the transition to democracy. Their focus was on ensuring they -- not just the military or members of Mubarak's regime -- have a seat at the table in deliberations shaping the future.

Among their demands: lifting of emergency law; creation of a presidential council, made up of a military representative and two "trusted personalities"; the dissolving of the ruling party-dominated parliament; and the forming of a broad-based unity government and a committee to either amend or rewrite completely the constitution.

"The revolution is not over. This is just a beginning. We are working on how to move into a second republic," said Shady el-Ghazali Harb, the representative on the coalition from one of the youth organizing groups, the Democratic Front.

Protesters were debating whether to lift their 24-hour-a-day demonstration camp in Tahrir. The coalition called for it to end and be replaced by weekly mass demonstrations every Friday to keep pressure on. But many in the square argued to remain. One man on a megaphone encouraged everyone to stay until all their demands were met, while others chanted "the people want the square to be cleared," referring to public grumbling that the protest camp is disrupting life downtown.

Many in the square were pouring love on the military: Families put babies on the laps of soldiers on tanks for photos, crowds cheered when a line of soldiers jogged by for exercise. But there was also realism that the military's ultimate intention is unclear.

"We don't know what they'll do, they might keep hanging on to power," said Muhammed Ali, a 22-year-old archaeology student who argued for the protests to continue.

With Mubarak gone, Egypt's future will likely be shaped by three powers: the military, the protesters, and the sprawling autocratic infrastructure of Mubarak's regime that remains in place, dominating the bureaucracy, the police, state media and parts of the economy. Right now, the protesters' intentions are the clearest of the bunch.

The Armed Forces Supreme Council is now the official ruler after Mubarak handed it power on Friday, consisting of the commanders of each military branch, the chief of staff and Defense Minister Hussein Tantawy. It has not explicitly canceled the constitution drawn up by Mubarak's regime, but the constitution seems to have effectively been put in a cupboard for the time being until it is decided what to do with it.

The military seized power after pleas from protesters, and it has repeatedly promised to ensure democratic change, making it highly popular with the movement.

But on the face of it, the elderly generals are no reformers, and their move to push out Mubarak may have been more to ensure the survival of a ruling system the military has been intertwined with since a 1952 army coup. The deeply secretive military has substantial economic interests, running industries and businesses that it will likely seek to preserve.

The council of generals has said nothing so far about how the transition will be carried out or addressed the protesters' demands.

While it decides that, it sought on Saturday to reassure Egyptians and Egypt's allies abroad.

A spokesman, Gen. Mohsen el-Fangari, appeared on state TV in front of a row of Egyptian military and national flags and read the council statement, proclaiming the military is "looking forward to a peaceful transition ... to permit an elected civil authority to be in charge of the country to build a democratic free nation."

The military statement also said Egypt will "abide by all regional and international treaties and agreements, and commitments" -- reassurance to its top ally the United States that Egypt's 1979 peace accord with Israel is not in danger.

Israeli Prime Minister Benjamin Netanyahu welcomed the statement, saying the treaty "has greatly contributed to both countries and is the cornerstone for peace and stability in the entire Middle East."

Israel has been deeply concerned that Egypt's turmoil could threaten the peace accord, the first between an Arab nation and Israel. But Egypt's military strongly supports the peace deal, not in small part because it guarantees U.S. aid for the armed forces, currently running at $1.3 billion a year. While anti-Israeli feeling is strong in Egypt, few so far seriously call for the treaty's abrogation.

Also, the Supreme Council asked the current government, installed by Mubarak after protests broke out Jan. 25, and provincial governors to "continue their activities until a new government is formed."

It did not say when that would happen, but it seemed to imply the army would draw one up to replace the current one.

The move to keep the government of Prime Minister Ahmed Shafiq in place appeared to be a stop-gap measure to keep the state and economy functioning at a time when the country is trying to recover from the economic fall out of the upheaval.

For days, many businesses and shops were closed, much of Cairo's population of 18 million stayed home under heavy curfew, and foreign tourists -- one of the top sources of revenues -- fled the country. Earlier this week, even as businesses began to reopen on a wide scale, labor strikes erupted around the country, many at state industries or branches of the bureaucracy.

The Supreme Council state asked the public, particularly the millions in the government sector, to "work to push the economy forward," el-Fangari said, an apparent call for everyone to return to work.

The military relaxed the curfew -- now to run from midnight to 6 a.m. instead of 8 p.m. to 6 a.m. -- and the Stock Market announced plans to reopen on Wednesday after a closure of nearly three weeks.

The other force that has hardly been heard from yet is the remainder of Mubarak's regime, which was accused of widespread corruption and authoritarianism but also has the experience in the nitty gritty of running the country, unlike the military.

Members of Mubarak's National Democratic Party still dominate ministries, parliament, state industries and other bodies. The powerful security forces, accused of widespread use of torture and involvement in past vote rigging, remain empowered by the emergency law that gives them wide authorities of arrest.

The regime remainders are battered. Some of its top personalities were purged in Mubarak's last days. Seeking to placate protester demands, the public prosecutor has launched a corruption investigation into four of the millionaire businessman politicians who came to dominate the NDP under the leadership of Mubarak's son, Gamal -- former ministers Ahmed Maghrabi, Rashid Mohammed Rashid and Zuheir Garana as well as ex-ruling party figure Ahmed Ezz.

On Saturday, the prosecutor general asked European countries to freeze the assets of the four.

He also announced a travel ban on former prime minister Ahmed Nazif, former interior minister Habib el-Adly and information minister Anas el-Fiqqi, who told state TV on Saturday that he has now resigned his post.

But much of the regime is in place -- too entrenched to call "former" -- and parts of it may resist changes that threaten their position. The security forces, in particular, have hardly been heard from since they were pulled off the streets during the crisis following clashes with protesters and replaced by the army.

Regime figures are certain to play a role in the transition. The question is how much of a role the military will give them and to what degree it will let in other voices.

The protest organizers say they so far have no direct talks with the military. "There are no channels of communications between us and the army but some public figures can help us," said Harb. He said "prominent figures" may play a mediating role.

The coalition that called for the Tahrir protest camp to be lifted and replaced by weekly rallies is highly influential in the square. But they do not claim to be its leaders and often say they can't defy the will of the "revolution." It is made up of several youth activist groups, including supporters of reform advocate and Nobel Peace laureate Mohamed ElBaradei as well as youth from the Muslim Brotherhood.

Is it more viable to buy or rent a house?

MY MONEY By TEE LIN SAY linsay@thestar.com.my

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IN today's environment of rising home prices, is it more advantageous to buy a house or rent a house?

While most people unanimously agree that owning a home is better, the financial situation of the individual is important in assessing whether he or she can afford the home.

VPC Alliance (KL) Sdn Bhd managing director James Wong says it is always better to own a home. But one's financial ability will play a big part in the choice of a house, he adds.

“Of course, it's better to buy than rent as the loan you pay to the bank is equivalent to the rental you are forking out,” says the boss of the property consultant firm.

James Wong ... ‘It’s better to buy than rent as the loan you pay to the bank is equivalent to the rental you are forking out.’

Young people are advised to look into their finances and ensure their existing debt ratios are not too high before buying a house. They also need to consider the stability of their jobs to ensure they will be able to make the monthly loan instalments, Wong says.

“If a person's debt ratio in relation to his salary is already close to 50%, chances are banks will not qualify the loan. If a person's salary is too low, meaning that the mortgage amount to be paid is more than 50% of a person's salary, the bank may also hesitate and require more documentation to approve the loan.

“These days, with the easy payment packages by banks and the ability to withdraw from one's Employees Provident Fund (EPF) savings, owning a house has become more affordable,” says Wong.

Certainly, potential house buyers can now tap on their EPF account 2 to purchase a property. First-time house buyers can still qualify for loans of up to 90%

During Budget 2011, the Government said it will introduce Skim Rumah Pertamaku through Cagamas Bhd, which will provide a guarantee on the downpayment of 10% for houses below RM220,000.

This scheme is for first-time house buyers with household income of less than RM3,000 per month. In other words, the buyers will obtain a 100% loan without having to pay the 10% downpayment.

First-time house buyers will also be given a stamp duty exemption of 50% on instruments of transfer on house prices not exceeding RM350,000. The Government also proposed that a stamp duty exemption of 50% be given on loan agreement instruments to finance such first-time purchase of houses.

“If you rent a home, especially in today's environment of rising prices, you will never benefit from the increase of the property value. Furthermore, even if the value of the home does not increase over time, the mortgage balance decreases and equity builds,” says another property consultant.

“With the problem of inflation creeping up, the more you delay buying a house, the more expensive it becomes over time. Buying property is one way to fight inflation,” he adds.

In terms of disadvantages in owning a house, there are many variable costs involved, for example the house assessment, service or maintenance fees and fire insurance among others.

“Selling the house may also not be as quick as, say, selling your investments in shares. The whole process of selling, along with documentation by lawyers can take up to a year, depending on the location of the home. If there is already a potential house buyer, the process can be sped up to 3 months,” says the property consultant.

Khong & Jaafar managing director Elvin Fernandez gives a quantitative example between buying and renting a property.

If a typical middle class 2-storey terrace house in Kuala Lumpur is RM400,000 and the rent is RM1,500 a month, the nett yield is RM3.8%.

“This is a reasonable return from such a landed property,” he says.

Assuming that the household income is about RM7,000 a month, this means that the ratio of the household income per annum to the house price is 4.76 times.

“To buy this house based on 90% financing at a fixed interest loan for 30 years, you would have to pay a 5% interest, which means a monthly expense of about RM1,900 a month. At this point of the exercise, it is clearly better to rent than buy,” he elaborates.

Still, he adds: “This analysis is based on what I consider the typical housing unit. Different considerations may apply for different types of housing units in different areas.”

Another powerful motivation in favour of buying rather than renting is the social imperative to own a home.

“Owning a house also allows you to raise credit as and when it is needed, for family expenses and for business purposes, and this is a powerful motivation for ownership,” says Fernandez.

This obsession with debt

WHAT ARE WE TO DO By TAN SRI LIN SEE-YAN

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AT Harvard, I really enjoyed graduate macroeconomics taught by Nobel laureate Prof W. Leonfief and Prof Martin Feldstein. In particular, the philosophies underlying different policy approaches by Keynes, Hayek and Friedman. Simply put, Hayek (the Austrian school ascendant in the 19th and early 20th centuries) promoted the idea that private sector should be left free to find its own balance in a downturn.

The markets' resulting purging power served the United States well in the 19th century when the economy emerged stronger after each recession. But, it was later taken too far in the mix of tight money and high taxes that led finally to the Great Depression. That's when the Keynesian idea of fiscal stimulus took root.

In October 1932, Keynes made the case that depressions are caused by a spending deficit which can only be made up by government spending. Because of “a lack of confidence”, there is no assurance excess funds “will find its way into investment in new capital construction by public or private concerns.” With global recession, the consensus made us all Keynesians resorting to heavy government spending to resuscitate the economy was the answer to severe downturns. First cracks appeared with the outbreak of the fiscal crisis in Greece early in 2010. Critics argued government spending brought-in diminishing returns, producing an anaemic (jobless) recovery that benefited mainly special interest groups.

In the United States, Federal Reserve chairman Ben Bernanke stood steadfast and let it be known more stimulus was needed. His monetary activism led to an open-ended commitment to pump as much money into the system as is required to push for maximum employment. He added that he was doing what Friedman would do.

Milton Friedman advocated that the Great Depression was largely the result of a major contraction in money supply.

Milton Friedman (father of monetarism) advocated that the Great Depression was largely the result of a major contraction in money supply. And could have been avoided had the Fed held money supply stable. There is now growing backlash against the Fed's new approach. As I read it, Keynes would not have supported big deficits during boom times, such as those that led eventually to the 2007/'08 crisis. Similarly, Friedman is unlikely to have backed the Fed's monetary activism in engineering economic expansion rather than merely cushioning the pain in downturns. So, systematic perversion of Keynes' and Friedman's thoughts has led to their falling out of favour once again.

Confidence 

The greatest disagreement between Keynes and Hayek was over benefits of government spending financed by deficits. Keynes pointed out that public interest in a recession cannot rely on private economy went so far as to say: “to spend less money than we should like to do is not patriotic.” But Hayek argued: “The existence of public debt on a large-scale imposes frictions and obstacles to re-adjustment very much greater than that imposed by the existence of private debt.” Simply put, no stimulus is needed. Nevertheless, both agreed this lack of confidence is simply destructive to any weakened economy.

For Keynes, confidence will come by bridging this gap in aggregate demand. “Private economy” was the culprit that impeded a return to prosperity by hoarding savings. That is, the potentially pernicious consequences of an increase in demand for money being not met by a corresponding increase in the supply of money. Even Hayek agreed hoarding is deflationary and “no one thinks deflation is in itself desirable.”

For Hayek, the way forward to building confidence in the face of destructive Smoot Hawley Tariff 30 protectionism, is for governments world-wide, led by the United States, to “abolish all those restrictions on trade and the free movement of capital.” Only expanded trade can rebuild confidence to enable the United States to pay off the public debt.

Growth vs debt

With recovery, albeit anaemic, attention is turned to exit (of stimulus) and fiscal consolidation (bringing down deficits and debt). After more than a decade of good times, the world awakens to face the reality of painful cuts and tax increases which are now needed to restore sanity in public finances, battered by a combination of years of overspending and the effects of global crises.

When recession set in in 2007, advanced nations' budget deficit averaged 1.1% of GDP. By end-2010, this had exceeded 9% according to the IMF, as revenues plummeted and banks got bailed out big time. Government gross debt will exceed 110% by 2015, against 73% of national income in 2007. This global rise in mounting debt will require nations to (i) reduce accumulating debt to bring down debt ratios, and (ii) inject fiscal discipline to reduce deficits. This, the International Monetary Fund warns, means “sizeable and sometimes unprecedented efforts as failing to do so would ultimately weaken the world's long-term growth prospects.”

While this is all well and good, there are fundamental differences in policy on opposite sides of the Atlantic. Germany's finance minister puts it this way: “While US policy makers like to focus on short-term corrective measures, we take the longer view and are, therefore, more preoccupied with the implications of excessive deficits and the dangers of high inflation.”

Last week's Franco-German move to end wage indexation, raise retirement age and lock-in debt limits into national constitutions across the euro-zone is bound to be provoking. In a public lecture, the infamous Soros said: “Something has gone fundamentally wrong in Germany's attitude towards the Economic Union.” By not only insisting on strict fiscal discipline for weaker euro-zone countries but also reducing its own fiscal deficit, Germany was in danger of setting in motion “a downward spiral.” This policy stance ignores a lesson from the 1930s Depression and so is “liable to push Europe into a period of prolonged stagnation or worse. That will in turn generate discontent and social unrest.”

Much of this is already today's reality. President Obama's stance is different but clear: secure a sustainable recovery first, while setting the stage for fiscal consolidation over the near medium-term. Growth is critical to success in reducing budget deficits. The US position is unique in that with US dollar at the heart of the global financial system, it can afford to tighten fiscal policy only when expansion is invigorated. While the US fiscal deficit (10.7% of GDP) is larger than the euro-zone, the Greek and Irish crises have prompted a flight to, rather than from, the US dollar and US bonds. Indeed, there is no market pressure to adjust. So, while the United States recognises it has to seriously tackle problems of fiscal deficit and high debt, there is an unwillingness to act politically.

Is debt too high?

Today's deficits which are leading to ever higher debt and servicing burdens are plainly unsustainable. What level of public debt is appropriate? Conventional wisdom says a safe level in a rich economy is 60% of GDP pitched at the limit enshrined in The Maastricht Treaty which governs membership in the euro. That's before the crisis.

As I see it, there is no empirical evidence to support this limit. Of course, the lower the better since it is unlikely to crowd-out private sector initiative. In the past, this limit was often by-passed anyway. Recent studies by Harvard's Rogoff and Reinhart find that public debt burdens of less than 90% have scant impact on growth; but they see significant impact at higher levels. No one-size fits all.

The United States, with the broadest and deepest bond market and dollar as reserve currency, surely will be able to carry a higher debt than any euro-zone members. In the end, the right level of debt depends on the means used to get there, consistent with growth targets. Evidence shows that cuts in spending are more sustainable and friendlier to growth; whereas, tax increases can harm growth. Taxes that do least harm to growth are on consumption and immobile assets (eg. property). Green taxes also make good sense. But politics often point elsewhere, eg. towards making the rich pay to clean the environment. In UK and US, the highest marginal income tax rates are possibly poised to rise. Good for populists but it will not boost growth.

Debts matter but assets also count 

During the Great Depression, Keynes advocated spending “of any kind, private or public, whether on consumption or investment.” The immediate aim was to urgently fill the void in demand. Hayek took exception for it mattered to him the form spending took since “revival of investment was particularly desirable.” Sure, once recovery comes on-stream, it does matter what the spending is on.

Henry Morgenthau, President Roosevelt's Treasury Secretary, advised: “You can do something about the railroads. You can do something about housing. Above all, you must do something to reassure business We want to see private business expand. We believe much of remaining unemployment will disappear as private capital funds are increasingly employed.” History suggests the new respect for market confidence helped in the recovery following a double-dip in 1937-38. A lesson for US Treasury's Geithner those who forget the past condemn us all to repeat it.

Come to think of it, fiscal consolidation is not just about deficits and debt. Depending on how they are incurred, assets are usually created. It is true we should not burden the future with unproductive debt. All societies have infrastructure assets, i.e. transport, energy & water systems. They also have basic education, health, judicial and defence systems. These systems provide a “public good” which are not usually provided by competitive markets.

Surely, it does not make sense slashing infrastructure and utility investments and support for university teaching when borrowing can be had at absurdly low cost. Indeed, never has there been a better time to borrow than now to productively build public assets. Such Keynesianism is worthy of support especially in the face of large unused capacity.

I think it is wrong to insist that solving the problem caused by debt can't be solved by piling more debt. It's wise to look at net debt. Yale Prof Shiller argues there is “an arbitrage opportunity for governments to borrow massively at these low real interest rates, and invest in positive returning projects Unlike private firms, government can count as “economic profits” on their investments with positive externalities (benefits that accrue to everyone). Of course, unsustainable government consumption must be curbed. Borrowing is no sin so long as they create productive assets. Assets created cannot be ignored when looking at debt.

The Keynesian way

I should end on a lighter note. I well recall a fascination with Keynes' lesser known short essay written in 1930: “Economic Possibilities for Our Grandchildren”. While in the thick of the Great Depression, Keynes reminded us that “the long run trend was inexorable growth.” He then went on to predict ... “the standard of life in progressive countries one-hundred years hence will be between four and eight times as high as it is today.” After 80 years, with all the disasters in between, US and Western Europe are already about 5-times richer. And still counting.

In emerging nations, income growth in the past 30 years has been even more impressive. What's of concern is the quality of sort of growth we are after in the end. Keynes acknowledged the insatiable desire of human beings to blindly pursue wealth. Recent events have shown, even with wealth, people still wanted to borrow more than they could repay. In the end, most would adjust, albeit grudgingly, to a life of plenty. It is in this future good life Keynes famously imagined economists could be thought of as “humble, competent people on a level with dentists.” Economists have a way to go yet.

Former banker, Dr Lin is a Harvard-educated economist and a British Chartered Scientist who now spends time writing, teaching and promoting the public interest. Feedback is most welcome; email: starbizweek@thestar.com.my.

At odds with each other

ANALYSIS By BARADAN KUPPUSAMY

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PAS is inherently conservative and wants to Islamise daily life. The DAP has to understand and accept that through its rapport and close cooperation with the party, it is helping to advance intolerance and a narrow view of a great religion.

NO MATTER how hard liberals in PAS, a minority in the party, try to limit the damage and paste over the excesses of the conservative majority, the party’s true face keeps surfacing every now and then, severely embarrassing the Pakatan Rakyat coalition whose secular member, the Chinese-majority DAP, is left to carry the brunt of the damage.

From banning alcohol to proposing chopping off hands for theft to hudud laws, it is the DAP that has to scramble to defend, deny, explain or justify the excesses of its ally PAS.

The DAP’s task is made difficult because PAS is unable to rationalise between its desire to Islamise daily life to respecting fundamental liberties and the secular legal foundations of the country.

The latest outburst by PAS Youth leader Nasrudin Hassan Tantawi, 41, to police society on Valentine’s Day has all the top DAP leaders – from adviser Lim Kit Siang to Selangor Speaker Datuk Teng Chang Khim and Dapsy leader Anthony Loke – working overtime to limit the damage, assure the public, refute the claim and criticise Nasrudin, a rising hardliner in PAS.

Nasrudin, who particularly targets Valentine’s Day, a Western practice that is now marked the world over as a day to celebrate affection, is into moral policing in daily life.

He is a leading advocate in PAS and in conservative Islamic circles for a sin-free society through the application of strict Islamic rules.

Nasrudin, elected as PAS Youth leader in 2009, announced on Wednesday that serious measures would be taken to quell “immoral acts” during Valentine’s Day in the Pakatan-ruled states of Kelantan, Kedah, Selangor and Penang.

The crackdown is part of the PAS campaign to instil sin-free living and will include searches and raids by local authorities, police action and distribution of pamphlets on the virtues of Muslim morality.

“We have identified spots in these states which are used by lovers and we are deploying local religious department officials, party members and Rela to stop acts like casual sex, which violates Islam,” Nasrudin reportedly told the AFP news agency which flashed the statement worldwide.

He has since said he was misquoted but his inclination for moral policing is well known.

PAS liberals like Shah Alam MP Khalid Samad, feminist NGO Sisters in Islam and DAP leaders criticised Nasrudin, questioned his credentials and authority to implement the measures and virtually told him to “shut up”.

Khalid and a few others like him are moderate Muslims and liberal in their views on contentious issues like hudud laws, alcohol consumption and moral policing, which are best left to the individual and family to decide.

Such leaders are far and few in PAS. Because the same “morality issues” keep cropping up and from a wide range of PAS leaders, so it cannot be dismissed as the odd behaviour of a few.

In fact, leaders like Khalid are the odd ones, trying and often failing to defend a “moderate” position in a conservative, fundamentalist party like PAS.

One cannot deny that PAS, being a religious party, is inherently conservative and bent on imposing its narrow view on society.

This is what the DAP has to understand and accept, that through its rapport and close cooperation with PAS, it is helping to advance intolerance and a narrow view of a great religion and not the pluralism and multi-culturalism that are the pillars of the “Malay­sian Malaysia” concept, the party’s founding philosophy.

It is not enough for DAP leaders to each time deny, reject, justify or assure the public on the excesses of PAS leaders but to engage with PAS and find an acceptable and permanent solution that is consistent with the Federal Constitution.

If a permanent solution is impossible, then the DAP should reappraise its pact with PAS.

Being members of the same political coalition and having a common political agenda and policy framework, they should be able to eliminate ambiguities, offer the rakyat a dependable solution and permanently end the pretence.

Nasrudin, from Kuantan, enjoys a wide following in PAS and outside for his uncompromising views on sin and morality.

He has been consistent in his views from when he was an Islamic student leader in 1992 till now, as the PAS Youth chief.

His early education was in government schools in Felda Keratong but his formative years were at the Maktab Ittibai Sunnah, Negri Sem­bilan and later at the famous Madra­sah Ad-Diniah al-Bakriah, Kelantan.

Married with six children, Nasrudin continued his higher education at the Ma’ahad Fathul Islami and at Al-Azhar University.

He returned to build a reputation as a devoted missionary, strong supporter of madrasah education, blogger and writer on Islamic issues.

Always in a turban, his advocacy makes him a rising star in PAS. As PAS Youth chief, he is member of the party’s Syura Council.

He stood for the Maran parliamentary seat in 2008 but lost to Umno’s Ismail Muttalib by a big margin.

This is not the first time Nasrudin has come under fire for his statements. Last year, he blamed Valen­tine’s Day and New Year celebrations as among the main causes of baby dumping.

Nasrudin’s background, education, beliefs and strong networking skills make him an ideal PAS leader of the future but in his conservatism, he is the antithesis of Khalid and his moderate philosophy.

The PAS grassroots endorsed Nasrudin, electing him youth chief in 2009 – the year when delegates at the party election in Shah Alam wiped out PAS moderates like Kelantan exco member Datuk Husam Musa, Khalid himself and others, leaving them isolated and fighting a rising conservative tide in PAS best represented by leaders like Nasrudin.

The scramble for skills

By Jagdev Singh Sidhu  jagdev@thestar.com.my

The plan to woo and retain Malaysian talent has steadfastly. But there are stumbling blocks

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Who doesn't have a relative or friend who has packed up and left Malaysia for “greener” pastures? And who doesn't know of someone who has plans or aspirations to do exactly that? Chances are, most of us do.

It would seem that over the years, the compulsion to leave the country in search of opportunities has grown beyond pure economics. Dissatisfaction over the quality of education, personal safety and for some, the political future of the country where sabre-rattling seems to have become common place have served as push factors for many Malaysians to pack their bags and leave the country.

While it could have been relatively easier to shrug off the consequences of that in the past, it is a “luxury” the country can ill-afford today, in this era of heightened competition where economies are scrambling to woo the best to stay ahead of the game and for many, to survive and prosper.


Malaysia has to retain and attract top talent to climb the global per capita income ladder.

»It is no longer a question of salary but the whole environment «TAN SRI RAMON NAVARATNAM

“We have the right ideas. Unless we implement those fast, we will create a credibility gap,'' says ASLI Centre of Public Policy Studies chairman Tan Sri Ramon Navaratnam, adding that “it is no longer a question of salary but the whole environment from social to the way of life that must be looked at holistically.”

The unique Malaysian worker

There is a commonly held belief that the Malaysian employee is able to assimilate and adapt well to any environment. In this context, environment would mean country. Indeed, that's a valuable trait to possess. That may partly stem from the multi-cultural nature of the Malaysian society which has carved a solid bed for the mingling among different races, religions and cultures.

Another oft-described trait of Malaysians, as highlighted by foreign employers, is that they are smart and hard working and this goes beyond the fact that the country has a large pool of straight-A scorers in public examinations. It has a great deal more to do with the employability of Malaysians.

Hence, every time a Malaysian goes abroad to study, the country faces the threat of them not returning to their country.

“The existing pool of 700,000 Malaysians working overseas is an indication of the capabilities of Malaysians overseas,” says Kelly Services (Malaysia) Sdn Bhd managing director Melissa Norman.

But what makes the Malaysian worker unique is also their linguistic capability.

“Malaysian talent is on par with regional and even global talent, especially those who have a good command of English as well as an additional language such as Mandarin or Bahasa Malaysia. Going forward, there is a need to improve the standard of the English Language and the technical competencies of the Malaysian labour force in order to remain competitive,'' says Randstad regional director of Singapore & Malaysia Karin Clarke.

But the country that has benefited the most from migrating Malaysians is Singapore. As Singapore is a high income economy Malaysia aspires to become, the island republic has attracted 300,000 Malaysians, a large number of whom comprise skilled talent.

»700,000 Malaysians are working overseas« MELISSA NORMAN

A mammoth task
An agency has now been set up to closely scrutinise this dilemma and fill the gap. Indeed, the newly-set up Talent Corporation Malaysia Bhd appears to have a Herculean task ahead.

The agency is headed by Johan Mahmood Merican and his mandate is to overcome the talent shortage situation in Malaysia. Naturally, sceptics abound as this is not the first time the administration has talked about the need to woo Malaysians from abroad and reverse the brain drain. Instead, over that period, the drain could have become more pronounced.

“We definitely see a wider pool of candidates being more open to looking at what is on offer, particularly in the educated professional fields and the sectors that are most highly in demand (abroad),'' says Clarke.

Sadly for Talent Corp, there is no single magic bullet to stem the tide and grow the talent pool in the country. The weak links are aplenty but fortunately, there is the appeal of promise - that the Government, this time around, has the political will to make the necessary changes, armed with a massive handbook called the Economic Transformation Programme.

According to Johan, Talent Corp has a three-pronged approach - analyse the Malaysian diaspora and see how best they can contribute to nation building, either by coming home or from where they are.

The other is to woo foreign talent and sort out the hurdles of them settling here while the third is to put a lid on the outflow of human capital.

In the process, Talent Corp will need to engage companies and businesses to ascertain what is needed to widen the talent pool and how government policies and procedures can be streamlined towards this end.
“We aspire to be a bridge between industry's requirement and the Government,'' says Johan.

Talent Corp started with a launch grant of RM30mil from the Government and Johan feels that its maximum staff strength should be no more than 50. Of course, he has been given a set of key performance indicators to match up to.

“I need to address the talent need and address the gap,” says Johan, who started on this journey on the first day of the new year.

“The bulk of my time has been spent engaging with stakeholders...there are a lot of people in the country who are passionate and knowledgeable. Having a practical knowledge of what's happening in the country and a sense of what needs to be done is important,'' he says.

Up the value chain

At heart of what Talent Corp wants to achieve is fulfilling the labour requirements of the ETP. The ETP is envisaged to create 3.3 million new jobs but many of those jobs are higher skills in nature.

»Malaysian talent is on par with regional and even global talent«KARIN CLARKE

The announcement in January where 35,000 new jobs would be generated from new investments totalling RM67bil shows that labour intensive jobs are on the wane and higher skills are in vogue.

As a country moves up the value chain towards a high income nation, which is what the ETP is meant to do, the type of skills required will be different but the freedom of labour movement, and the lack of soft skills, is causing a lot of problems for employers of high skilled labour.

“Malaysia has a high graduate population. However, many lack the soft skills deemed necessary for many high skilled job placements.

“We hope that the initiation of the Talent Corporation will assist in addressing some of these issues. Human capital is an asset to our economic growth and an importance has to be placed on proactively developing our workforce,” says Norman.

According to Kelly Services, the top five skills in demand are communication skills, problem solving, ability to participate in decision making, people management and strategic thinking.

“Overcoming these skills shortage will include investing in existing talent to ensure that they are well-versed in not only the theoretical knowledge but also the soft skills,'' says Norman.

She says meeting labour demands will depend on the collaboration of different factions.

“High salaries and attractive benefits are not the only factors that will assist in attracting the right talent. As Malaysia has a significant ageing workforce and a growing young population, a multi-generational strategy is crucial,” she adds.

To ensure Malaysian human capital is capable of meeting the standards and demands of the workforce, Norman says educational institutions need to be equipped with the tools and capabilities to teach students relevant in-demand skills while fresh graduates need to be nurtured to ensure they meet the demand of future employers through work placements and internships.

The Talent crunch

Malaysia is a country that's just a nudge away from full employment.

But possessing a university degree is no longer a guarantee for employment as the scrolls are not always relevant to the skills needed.

Kelly Services notes that every year, 250,000 Malaysians complete their studies at higher education institutions locally and overseas.

“There are now about 25 private universities and 20 university colleges in Malaysia, and student enrolment in private higher education institutions has increased by over 54% within a short span of time from 2005 to 2008,'' says Norman.

“As globalisation of work and workers continues, so will the need for higher education institutions to re-examine required skills in the new knowledge-based economy and how they can produce more thinking' students, who are competitive, have the relevant technical and behavioral competencies.”

With competition for skilled IT talent in Malaysia at an all time high, especially in IT outsourcing and shared ervices, there is a shortage in that sector; Malaysia's shared services and outsourcing SSO sector created 32,500 jobs in 2007 and is growing at about 30% per annum and has the potential to hit RM6.4bil by 2012.

The rollout of high speed broadband has provided strong demand for talent in both the cellular and broadband segments in the telecommunications industry. In engineering, new development projects and industrial parks such as the Tanjung Agas Industrial Park, the Northern and Southern corridors have created job opportunities across the country.

“Within the commercial and business sectors, candidates with strength in market research, product and brand knowledge are also in demand,'' says Norman. “These are sectors that face a constant demand for talent with specialised skill-sets and experience.”

Even though more than quarter of a million people graduate from institutions of higher learning annually, Clarke says there is still a huge number of jobs that are not filled.

»At such levels, Singapore is 21% cheaper than Malaysia« 
SHAMSUDDIN BARDAN

“Latest statistics reveal that there are 100,000 jobs available but no graduate takers,'' she says.
The skill crunch is particularly acute in major hubs.

Three most notable markets where skill shortage persists, according to Randstad 2010's World of Work report, are KL, for white collar professionals, Penang for specialists in the semiconductor and manufacturing sectors and Johor Baru, particularly for infrastructure roles, such as healthcare and education.

The low down

Wages are often a strong cause for labour migration. Malaysian Employers Federation executive director Shamsuddin Bardan however, disagrees that wages in Malaysia are too low citing that even a foreign worker, based on MEF estimates, should be earning a take home pay of RM1,500 a month based on the amount of remittances from Malaysia.

Another factor is productivity. Shamsuddin points out that a worker in Singapore is paid 2.5 to three times that of an equivalent skill in Malaysia but their productivity is 3.8 times higher than a Malaysian worker.
“At such levels, Singapore is 21% cheaper than Malaysia,'' he notes.

But the relative static pace of wage inflation has been a source of frustration for many, and is high up in the reasons for departure.

Malaysia has yet to experience a significant change in wages and there are numbers to prove it. The country's average annual salary increase has been relatively small at 2% to 6% over the past decade.

The Kelly Employment Outlook and Salary Guide 2010/11 indicated a 4% to 5% increase in salaries across all sectors.

“There are calls to implement a minimum wage system as the Human Resource Ministry revealed that 34% of our workforce earns below the national poverty line of RM720,” she adds.

Clarke points out that wages in Malaysia are reasonably consistent based on individual currencies with other countries in the region but the challenge for Malaysia is that there are countries in the region that have stronger currencies.

“For example, a Malaysia-based Priority banker earns the same in ringgit as a Singapore priority banker earns in Singapore dollars. However the currency conversion would see the Singapore banker earn over double that which they would in Malaysia,'' she says.

That is yet, another factor that could keep Malaysian talents rooted abroad.

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