• The battle for Selangor in GE14 (Part 1)

    Media Statement by Dr. Ong Kian Ming, MP for Serdang, on the 26th of September, 2017

    The battle for Selangor in GE14 (Part 1)

    It is no secret that the Barisan Nasional (BN) is desperate to win back Selangor at all costs in the upcoming general election. The reasons are obvious. Selangor is the richest state in Malaysia by economic output. Many big-ticket infrastructure projects such as the East Coast Rail Line (ECRL), the High Speed Rail (HSR), the LRT and MRT projects, water projects and new toll roads, require the approval of the Selangor state government. Having a well-governed Pakatan Harapan (PH) state government on the doorstep of Putrajaya is also a headache for the BN because voters can compare and contrast the performance of the Selangor state government with other BN state governments as well as the Federal Government.

    What are the chances of the BN recapturing Selangor in GE14? The answer lies partly with the outcome of the expected three corner fights which will occur between the BN, PH and PAS. Before I go into the analysis of possible outcomes in three corner fights, it is important to understand the nature of voters in Selangor. Voters in Selangor are perhaps the most ‘sophisticated’ in the whole country and because of this, their voting patterns are also the most volatile. Let me illustrate by using the general election results from 1990 onwards.

    Figure 1 below shows the level of BN support in states which have been won or are held by the opposition namely Kedah, Kelantan, Terengganu, Penang, Perak and Selangor from 1990 to 2013.

    Figure 1: BN support in Kedah, Kelantan, Terengganu, Penang, Perak and Selangor (GE1990 to GE2013)

    BN support in Selangor is the most volatile among all these frontline states. For example, the BN support in Selangor (highlighted in bold) increased from 54.8% to 72.4%, a massive spike, due to the high economic growth enjoyed by the country during the ‘East Asian’ miracle years from the early 1990s until just before the Asian economic crisis in 1997. Support for the BN in Selangor fell to 54.8% during the 1999 Reformasi elections. It then increased to 62.8% in 2004 during the Pak Lah ‘tsunami’ before falling to 43.4% in the 2008 BN backlash elections and falling to 38.4% in the 2013 GE.

    Figure 2 below shows the changes in the level of BN support in these key stations from 1990 to 2013 with the figures for Selangor highlighted in bold. Figure 2 shows more clearly the level of volatility which Selangor voters exhibit from one election to another. From 1990 to 1995, BN support increased by 17.7%, the highest among all key states. BN support fell by 17.7% from 1995 to 1999, also the highest among all key states. From 2004 to 2008, BN support fell by 19.4%, the highest among all key states, which led to a change in government in Selangor.

    Figure 2: Change in BN support in key states (GE1990 to GE2013)

    Does the volatility shown by Selangor voters means that the BN can hope to win back Selangor based solely on its performance and leadership? This would be wishful thinking on the part of BN leaders. One of the main reasons why Selangor voters exhibit such volatility is that they are the fastest to reward good performance and also the fastest to punish bad performance. They rewarded the BN in 1995 for delivering economic growth and prosperity and they swung against the BN in 1999 because of the economic and political crisis during Reformasi (albeit not by enough for the BN to lose this state then). They swung against the BN in record numbers in 2008 because of dissatisfaction against Pak Lah due to undelivered election promises. There is nothing in BN’s track record and leadership which indicates that voters in Selangor will reward it in the next general election especially when the best the BN can do is to parade out a line-up of 3 ex-Menteri Besars, one of whom was convicted of corruption and another who was found carrying a suitcase full of cash to Australia.

    The track record of the Selangor state government, while not perfect, has been positively felt by the voters in the state through many of the welfare programs under the ‘Inisiatif Peduli Rakyat’ umbrella including free medical cards for low income families and individuals and free buses in each of the districts / municipalities in the state. Investments and jobs continue to pour into Selangor. The high popularity of Selangor Menteri Besar, Azmin Ali, stands in stark contrast to that of Prime Minister Najib Razak.

    A large number of the more than 2 million voters in Selangor are not originally from Selangor. Many of them move to Selangor because of better job and educational opportunities. As such, many of them are not attached to any political party i.e. they are not ‘hard-core’ BN or opposition supporters. Many of these voters also have better access to information including social and online media. They are not ‘brainwashed’ by mainstream media. Many of these voters also have higher income and education profiles compared to other states. And the number of newly registered voters is the highest in Selangor compared to other states.

    All these reasons explain why most Selangor voters will vote practically i.e. by rewarding the party or coalition which promises to give them what they want namely better governance that will keep the streets clean, deliver better welfare programs, provide properly paved roads and improve the quality of life. These are also reasons why it is very possible for Pakatan Harapan (PH) to retain most of the seats which were won by Pakatan Rakyat in GE13 even in the case of three corner fights.

    I will provide the evidence in Part 2 of my statement.

    Dr. Ong Kian Ming
    Member of Parliament for Serdang

  • Did the Minister of Youth and Sports, Khairy Jamaluddin, give approval for the organizing of the recently cancelled Malaysia Marathon?

    Media Statement by Dr. Ong Kian Ming, Member of Parliament for Serdang, on the 9th of September 2017

    Did the Minister of Youth and Sports, Khairy Jamaluddin, give approval for the organizing of the recently cancelled Malaysia Marathon?

    The Malaysia Marathon, which was supposed to take place in Kuala Lumpur on the 1st of October, has been abruptly cancelled less than a month before the run. The cancellation was announced on the Malaysia Marathon website and facebook page on the 5th of September, 2017. On the 7th of September, the Minister of Tourism, Datuk Seri Nazri Abdul Aziz, announced that the reason for the cancellation of the marathon was because the organizer could not deliver its initial promise of bringing 5,000 runners from China to participate in this run.[1]

    Not surprisingly, Malaysian runners vented their frustration via facebook including the FB page for the Malaysia Marathon. At the time of writing, the FB posting for the cancellation of the race had received 371 comments, mostly negative.[2] The last-minute cancellation of running events is not a new occurrence in Malaysia. It has happened many times before which is why I presented the results of a survey of Malaysia runners to the Ministry of Youth and Sports, Khairy Jamaluddin, via his Deputy, Datuk M. Saravanan in parliament on the 1st of August 2017.[3] Understandably, the Minister has been busy with the 29th Kuala Lumpur SEA games and now, with the Paralympic games which starts on the 17th of September 2017. But this last-minute cancellation raises a few questions which needs to be answered by the Minister of Tourism and the Minister of Youth and Sports, which are listed as the organizers of the Malaysia Marathon (together with DBKL and Wisdom Sports (M) Sdn Bhd).

    Firstly, did the Minister of Tourism have any contingency plans if the race organizer, Wisdom Sports, was not able to bring the promised number of Chinese runners to Malaysia? The Minister should know that even for established marathons with more than 40,000 participants such as the Standard Chartered Kuala Lumpur Marathon (SCKLM) and the Penang Bridge International Marathon (PBIM), the number of foreign participants is far less than 5,000, what more for a race that was supposed to attract only 20,000 participants.[4] Did the Ministry not think about the welfare of the Malaysia runners who had signed up for this race, some of whom had booked train, bus and plane tickets to travel to KL from other states to participate in this race? Was the Ministry not able to attract enough corporate sponsorship to help with the expenses for organizing this race, even if there was an insufficient number of Chinese participants? The explanation given by the Minister for the cancellation of this event is not sufficient and shows that the Minister does not care about the welfare of Malaysia runners and tourists.

    Secondly, the Minister of Youth and Sports should inform the public if he signed off on this event. Section 33 of the Sports Development Act 1997 states that “no person shall bid to host any international sports competition or event in Malaysia without the prior approval in writing of the Minister whose decision thereon shall be final”.

    Since the Minister of Youth and Sports was listed as one of the organizers for this event and the international nature of this event involving so many Chinese runners requires the approval of the Minister, Khairy Jamaluddin should state if he did indeed sign-off on this race. If he gave his written approval for the organizing of this race, then he should explain to the public what sort of assurances he had that this race would not be cancelled if there were an insufficient number of participants from China. I do not think that this would be a valid reason for other international marathons such as the SCKLM and the PBIM to be cancelled. Why should it be a valid reason for an event like the Malaysia Marathon?

    In addition, there were numerous other details concerning this Malaysia Marathon which indicated that the organization of this race was not in accordance to international sporting standards (which is required by Section 34 of the Sports Development Act 1997) including not publishing the details of the route for the 42km, 21km and 10km races, not publishing the amount of prize money and other prizes for the 42km, 21km and 10km races and for initially ‘mislabelling’ this run as being certified by the International Association of Athletics Federations (IAAF)[5]. Was the Minister aware of all these potential shortcomings of the Malaysia Marathon before he signed-off and approved for this race to be organized?

    The last-minute cancellation of a supposedly international marathon that included two prominent Ministries as its organizer leaves a shameful black mark on the running landscape in the country. If the Malaysian government cannot protect the welfare of Malaysia runners in a race called the Malaysia Marathon, then can we trust the government to protect the welfare of Malaysian runners in other races which are organized in the country?

    Dr. Ong Kian Ming
    Member of Parliament for Serdang

    [1] http://www.thesundaily.my/node/479618?

    [2] https://www.facebook.com/notes/malaysia-marathon/cancellation-of-malaysia-marathon-2017/276215422875144/

    [3] http://ongkianming.com/2017/08/01/media-statement-the-ministry-of-youth-and-sports-needs-to-do-more-to-improve-the-quality-of-running-events-in-malaysia/

    [4] http://www.thestar.com.my/news/nation/2017/03/01/marathon-targeting-20000-entries-one-belt-one-road-run-at-dataran-merdeka-expected-to-generate-rm40m/

    [5] The claim of the IAAF certification was later removed when it was questioned by members of the running community.

  • The Ministry of Higher Education (MOHE) should not be overly obsessed with global university rankings but instead focus on locally developed indicators to improve our universities

    Media Statement by Dr. Ong Kian Ming, Head of Penang Institute in Kuala Lumpur, on the 8th of September 2017

    The Ministry of Higher Education (MOHE) should not be overly obsessed with global university rankings but instead focus on locally developed indicators to improve our universities

    The Times Higher Education (THE) World University Rankings for 2018 were released earlier this week. The initial headlines focused on the fact that two United Kingdom universities, the University of Oxford and the University of Cambridge, topped the rankings coming in at number one and two respectively.

    Malaysian universities, however, did not fare so well. Universiti Malaya (UM) was the highest ranked Malaysian university at the 351-400 range. Universiti Tunku Abdul Rahman (UTAR) was the next highest ranked Malaysian university at the 501-600 range. Universiti Kebangsaan Malaysia (UKM), Universiti Putra Malaysia (UPM), Universiti Sains Malaysia (USM), Universiti Teknologi Malaysia (UTM), Universiti Teknologi Petronas (UTP) were all ranked in the 601-800 range followed by Universiti Tenaga Nasional (UniTEN) in the 801-1000 range and Universiti Utara Malaysia (UUM) in the 1001+ range (See Table 1 below).

    Table 1: Ranking of Malaysian Universities in the Times Higher Education (THE) World University Rankings 2018

    Rank Name of University
    351–400 University of Malaya
    501–600 Universiti Tunku Abdul Rahman (UTAR)
    601–800 Universiti Kebangsaan Malaysia
    601–800 Universiti Putra Malaysia
    601–800 Universiti Sains Malaysia
    601–800 Universiti Teknologi Malaysia
    601–800 Universiti Teknologi Petronas
    801–1000 Universiti Tenaga Nasional (UNITEN)
    1001+ Universiti Utara Malaysia

    The position of Malaysian universities in the THE rankings stand in stark contrast to the 2018 QS World University Rankings where five Malaysian universities were ranked in the top 300 with UM occupying the 114th position (UPM was ranked 229, UKM was ranked 230, UTM was ranked 253 and USM was ranked 264).

    If we examine the Shanghai Jiao Tong Academic Ranking of World Universities (ARWU) and the US News and World Report’s Best Global University Rankings, two of the other well-known global university rankings, we also find Malaysian universities being ranked outside the top 300. For example, in the ARWU rankings for 2017, UM and USM were ranked in the 401-500 range while UKM and UPM were ranked in the 501-600 range and UTM in the 701-800.

    In the US News 2017 ranking, UM was the highest ranked Malaysian university at 356 followed by USM (576), UTM (639), UPM (670) and UKM (783).

    Figure 1 below shows the difference in the rankings achieved by Malaysian universities in the QS World University Rankings versus the other three global university rankings – THE, ARWU and the US News ranking.

    Figure 1: Latest Global University Rankings of the Top 5 Research Universities in Malaysia (2017/2018)

    What can explain the differences in the performance of Malaysian universities in the QS rankings versus the other well-known global university rankings? One likely reason is that the QS rankings allocate the lowest percentage of its overall score to research and citation based measures. Table 2 below summarizes the components of these four global university rankings and calculates the overall weightage which is given to research and citation based measures i.e. the publication output of a university. The QS ranking only allocates 20% of its overall score to research and citation measures. In comparison 60% of the THE, 70% of the Shanghai AWRU and 75% of the US News rankings are allocated to research and citation measures.

    Under the QS rankings, academic reputation and employer reputation account for 50% of the overall score. These are subjective measures which can be heavily influenced by the sample of respondents surveyed. For example, in the latest 2018 QS rankings, the representation of Malaysian academics in the academic survey is unduly large, considering that Malaysia makes up merely 0.41% of the world’s population yet its representation in the academic survey is 3.7%. The percentage of Malaysian respondents in the academic survey is even greater than countries like China (1.7%), Germany (2.9%) and Japan (3.2%).

    The percentage of international academics and students make up 10% of the overall QS score and discerning universities which want to improve their QS ranking can increase these figures without necessarily increasing the quality of teaching, of academic research or of student quality. Indeed, one should not forget that the QS rankings[1] in 2004 ranked UM at 89th in the world because Chinese and Indian Malaysian students and lecturers were mistakenly classified as foreigners thereby artificially inflating UM’s International Faculty and Student scores.[2]

    Table 2: Components and Weightage of the QS, THE, Shanghai ARWU and US News Rankings

    Ranking Components Weightage Research & Citation Based Weightage
    QS Academic Reputation 40% 20%
    Employer Reputation 10%
    Faculty Student Ratio 20%
    Citations per Faculty 20%
    International Faculty 5%
    International Students 5%
    THE Teaching: the learning environment 30% 60%
    Research: volume, income and reputation 30%
    Citations: research influence 30%
    Industry income: innovation 2.5%
    International outlook: staff, students and research 7.5%
    Shanghai ARWU Alumni of an institution winning Nobel Prizes and Fields Medals 10% 70%
    Staff of an institution winning Nobel Prizes and Fields Medals 20%
    Highly cited researchers in 21 broad subject categories 20%
    Papers published in Nature and Science* 20%
    Papers indexed in Science Citation Index-expanded and Social Science Citation Index 20%
    Per capita academic performance of an institution 10%
    US News Global research reputation 12.5% 75.0%
    Regional research reputation 12.5%
    Publications 10.0%
    Books 2.5%
    Conferences 2.5%
    Normalized citation impact 10.0%
    Total citations 7.5%
    Number of publications that are among the 10 percent most cited 12.5%
    Percentage of total publications that are among the 10 percent most cited 10.0%
    International collaboration 10.0%
    Number of highly cited papers that are among the top 1 percent most cited in their respective field 5.0%
    Percentage of total publications that are among the top 1 percent most highly cited papers 5.0%

    The Ministry of Higher Education’s (MOHE) decision to benchmark Malaysian universities using the QS World University Rankings is thus short-sighted and faulty since the QS rankings do not give much emphasis on research output. MOHE is fooling itself and the Malaysian public if it continues to use the improvement of Malaysian universities in the QS rankings as a sign that our universities are improving, especially on the research front.

    This does not mean that we should rely on the other global university rankings which give more weightage to research output. The other ranking systems are also not without their own weaknesses. For example, the Shanghai ARWU rankings gives too much weightage to the science subjects and publications and also to universities with previous winners of Nobel prizes and Field medals. A Malaysian university can conceivably improve its Shanghai ARWU ranking by giving short term fellowships to a few Nobel prizes and Fields Medals winners but this may not improve the overall research output of that university.

    Rather than be obsessed with the ranking game, MOHE should instead work to improve the existing academic indicators and measures which have been developed locally by the Ministry and the Malaysian Qualifications Agency (MQA) to assess the quality of local public and private universities such as the Malaysian Research Assessment Instrument (MyRA), the Rating System for Malaysian Higher Education Institutions (SETARA) and the Discipline-Based Rating System (D-SETARA). Currently, there is very little transparency or disclosure on how the data for these measures are being collected and even less discussion on how to improve these measures so that they can be used by the public to evaluate the quality of these institutions and for these institutions to benchmark themselves. For example, MySetara loses much of its value if the majority of our private and public universities are given five stars (out of a possible six). How do we differentiate between these universities in terms of the quality of research output or the standard of teaching, just to name two?

    The Penang Institute in Kuala Lumpur has published a report entitled “An unhealthy obsession with Global University Rankings?”[3] as a way to increase awareness on the strengths and weaknesses of each global university ranking system and to make the argument that MOHE should not be overly obsessed with Malaysia’s performance on these rankings but instead focus on improving the local measures of university quality developed by the MOHE and MQA. If we focus on improving our universities according to more suitable locally developed indicators, the output of our universities in terms of the quality of research, the quality of teaching and the quality of graduates will also improve. And if a by-product of this improvement is that our rankings rise in these global university rankings systems, then this can be seen as a bonus.

    [1] This was when these rankings were published jointly by QS and THE. They started publishing separate rankings in 2010.

    [2] http://rankingwatch.blogspot.my/2012/08/universiti-malaya-again-in-many.html#links

    [3] Authored by Lee Zi-Sheng, an intern with Penang Institute in KL and Dr. Ong Kian Ming, Head of Penang Institute in KL. A copy of this report will be uploaded to the Penang Institute in KL website: http://penanginstitute.org/v3/research/penang-institute-in-kuala-lumpur

  • A critique of Dr. Bruce Gale’s “Economic Reform in Malaysia: The Contribution of Najibnomics”

    Media Statement by Dr. Ong Kian Ming, Member of Parliament for Serdang, on the 6th of September 2017

    A critique of Dr. Bruce Gale’s “Economic Reform in Malaysia: The Contribution of Najibnomics”

    I must admit that I was somewhat taken aback to read that Dr. Bruce Gale had written a book on Najibnomics that was, on the whole, praiseworthy of the economic reforms which took place under the Najib administration. The first time I came across Dr. Gale’s name was via his first book “Politics and Public Enterprise in Malaysia (1981)” which I believe is based on his PhD thesis which he wrote as a student at Universiti Kebangsaan Malaysia (UKM). Since then, Dr. Gale has written a number of other books and is, as far as I know, based out of Singapore doing political risk consulting. I did not want to respond to the arguments made in the book until I had read the entire book, which I managed to do over the holiday weekend. It is not a long book, only 99 pages, much of it comprising of budget highlights, various initiatives under the Economic Transformation Program (ETP) and key economic policy initiatives under the Najib administration, much of which I was already familiar with. Suffice to say, after finishing the book in approximately 2 hours, I found major gaps in Dr. Gale’s analysis of Najibnomics which I will now highlight.

    Dr. Gale defines Najibnomics as “the practice of increasing the resilience of an economy by pressing ahead with macroeconomic and administrative reforms regardless of their short-term political cost”. He argues that Najib made the difficult decisions to introduce the GST, withdraw subsidies and introduce structural reforms even though he knew they were going to be politically unpopular so that the economy could be on a sounder footing in the longer term. This argument is not new. These are the basic tenets of the “Washington Consensus” model espoused by the International Monetary Fund (IMF) and the World Bank which was shoved down the throats of developing countries during times of economic crises in return for financial aid from these international lending institutions. The problem with this traditional argument in support of such ‘austerity’ policies is that firstly, they don’t examine the damage done to individuals and families, especially those with lower incomes, and secondly, they don’t analyse the devil in the details.

    (i) Withdrawal of subsidies but where are the mitigation measures now?

    In Najibnomics, Dr. Gale focused on the withdrawal of subsidies for three items – sugar, petroleum and the electricity tariff. He ignored the impact of the withdrawal of subsidies on other necessities such as flour and cooking oil as well as toll prices, just to name a few. And he failed to discuss the ‘mitigation’ measures that were supposed to cushion the blow of taking away these subsidies.

    I still recall way back in 2010, when Dato’ Idris Jala, who was then the Minister in charge of PEMANDU, made the case that the impact of the subsidies would be cushioned by targeted ‘mitigation’ measures. For example, in place of the petrol subsidy, each person with a motorcycle that is less than 250 CC would receive an annual subsidy of RM54 while each person with a small car (less than 1000 CC) would receive an annual subsidy of RM126. To cushion the impact of the increase in toll prices, he promised a 20% rebate for heavy toll road users (more than 80 transactions per month). To cushion the impact of the price rise in sugar, flour and cooking oil, poor families would receive a cash rebate of RM20 in the first year and an unspecified discount through the MyKasih card in the 2nd year. These mitigation measures disappeared in 2011 (or were never implemented) leaving consumers, especially the more vulnerable groups, financially worse off. Hospital treatment charges and university school fees were also raised as part of this subsidy ‘rationalisation’ plan.

    Source: Powerpoint Presentation by Dato’ Idris Jala on the 27th of May, 2010 at the Subsidy Rationalization Open Day[1]

    (ii) The significant increase in off-budget expenditure items

    Dr. Gale praised Najibnomics for improving Malaysia’s overall fiscal position i.e. reduction of the budget deficit and of government debt as a % of GDP. But he fails to even have a single mention of the rise in off-budget spending as well as the increase in contingent liabilities under the Najib administration.

    Contingent liabilities or debt by government owned and government controlled entities which are fully guaranteed by the federal government increased from RM96.9 billion in 2010 to RM187 billion in 2016, an increase of RM90.1 billion or 93%. In comparison, the total budget expenditure increased by only 31.5% during the same time period, from RM203 billion in 2010 to RM267 billion in 2016, representing an increase of RM64 billion. If Dr. Gale believes that the GST was necessary to improve Malaysia’s public finances in the long run, shouldn’t he have at least discussed the long-term impact of the rise in these contingent liabilities? Especially since some of the big ticket contingent liabilities such as the expenditure for the LRT extension and the upcoming LRT Line 3, the MRT Line 1, Line 2 and possibly Line 3, the East Coast Rail Link (ECRL) and the High-Speed Rail (HSR), will have to be eventually financed directly by the federal government?

    This does not even include the financial gymnastics used by the federal government to artificially maintain the government debt to GDP ratio below the 55% level. For example, the Ministry of Finance shifted approximately RM27.9 billion in development expenditure from the budget to a 99% MOF Inc owned private company called Pembinaan PFI Sdn Bhd from 2010 to 2013.[2] This reduced the budget expenditure in the short run but would increase the long-term interest payments incurred by the government over the next 20 years.

    This does not include the RM10 billion spent by Pembinaan BLT Sdn Bhd, another 100% MOF owned private company, to build new police quarters and facilities which the government will have pay a yearly rental to.[3]

    This does not take into account the RM22 billion of housing loan debt incurred by civil servants which was shifted to the Public Sector Home Financing Board, another 100% MOF owned entity.[4]

    Given Dr. Gale’s familiarity with the public sector in Malaysia, it is utterly surprising that his analysis would exclude such big-ticket items that would inevitably affect the Malaysian government’s financial position moving forward, since a significant amount of the interest on this off-budget debt will have to be serviced by the federal government either directly or indirectly.

    (iii) The rapid rise in the budget allocation of the Prime Minister’s office

    Dr. Gale was quick to point out the increasing share of the budget being taken up by petrol subsidies and argued that this misallocation of resources had to be curtailed i.e. the petrol subsidy needed to be removed. But he totally ignored the fact that the allocation to the Prime Minister’s Department grew significantly under Najib’s watch. The total budget allocation (operating and development expenditure) allocated to the Prime Minister’s Department grew from RM12.2 billion in 2010 to RM 20.3 billion in 2016, an increase of 66.5%. Recall that during this time period, the overall budget only increased by 31.5%. In other words, the allocation to the Prime Minister’s Department grew more than twice as fast as the total budget expenditure! Why wasn’t this potential misallocation of resources investigated by Dr. Gale despite the spotlight which opposition politicians have shone on this expenditure year after year?

    (iv) How widespread was Najib’s efforts at economic liberalisation and increasing competitiveness?

    Dr. Gale is quick to point to policies such as Najib’s decision to scrap a 30% requirement for ethnic Malay ownership of investments in 27 areas as examples of economic liberalisation under the Najib administration that were potentially politically unpopular but would lead to long term positive outcomes and greater competitiveness in the Malaysian economy. But he failed to highlight the areas which Najib did not liberalize and failed to make more transparent.

    He left the structure of Public Private Partnerships (PPP) alone which allowed unfair concession agreements to continue and for new ones to be signed. He failed to renegotiate the lopsided toll concession agreements which partly contributed to additional government expenditure via compensation to the toll concessionaires in lieu of toll price increases and later, to toll price increases when the government eventually withdrew this subsidy. He allowed new toll concession contracts to be directly negotiated and signed without any public disclosure of the terms and conditions. The MRT Line 1 and Line 2 projects were awarded directly to the Gamuda-MMC consortium without an open tender and the most expensive infrastructure project in Malaysia to date, the RM55 billion East Coast Rail Line (ECRL), was awarded to a Chinese company without a public tender.

    (v) Over reliance on the annual reports produced by PEMANDU

    Dr. Gale quoted statistics and examples liberally and copiously from the Economic Transformation Program (ETP) and the Government Transformation Program (GTP) annual reports as evidence of Najib’s success in administrative and economic reform. He took these statistics such as the KPIs which showed a significant reduction in crime and the roll out of the various Entry Point Projects (EPPs) which were ‘shovel ready’ at face value. Never did it occur to him to attempt to verify the accuracy of these statistics and figures.

    I stand by the critiques of the Economic Transformation Program (ETP) which I co-wrote with Teh Chi Chang and published under the think tank REFSA in 2012. In fact, many of our predictions have been proven right. Our critique that some of the multi-billion Entry Point Projects (EPPs) such as the RM10 billion Karambunai Integrated Resort in Sabah and the RM3 billion Tanjong Agas Oil and Gas and Logistics Industrial Park in Pekan, Pahang did not make financial sense and would prove to be ‘dud’ projects have been right on the mark.[5] This is not the right place to do a complete re-evaluation of the ETP but suffice to say, Dr. Gale did not do his due diligence in this area. Even the checks from the so-called ‘Independent Review Panel’ on the ETP was a creation by PEMANDU which calls into question the extent to which the panel was truly independent.

    (vi) Overlooking the 1MDB and Felda Global Ventures (FGV) scandals

    Dr. Gale knew, even before he started writing this book, that he needed to deal with two elephants in the room, one larger than the other. The first was the 1MDB global scandal and the other was the mismanagement which occurred in Felda Global Ventures (FGV). In his Preface, he stated that both these scandals ‘are not the subject of this study’. He justified this by stating that ‘1MDB and FGV were conceived as corporate strategies, not macroeconomic reform programs’. I would disagree.

    Dr. Gale’s entire premise of Najibnomics was that the decisions taken by Najib have put the country on a sounder economic footing in the long term. But what if we are forced to continue to pay up for the debts of 1MDB moving forward? The US$6.5 billion which 1MDB owes to the London-based and Abu Dhabi controlled International Petroleum Investment Company (IPIC) may have to be paid for by the Malaysian government over the next 5 to 10 years. We must also not forget that the Malaysian government could have directly benefitted from auctioning off the valuable real estate in what is now the Tun Razak Exchange (TRX) and Bandar Malaysia and collecting the proceeds rather than selling these two parcels of land on the cheap to 1MDB so that they could resell the land in order to cover up their own mountain of debt. We must not forget that the Government Pensioners Fund (KWAP) was asked to buy over SRC International which had incurred a debt of RM4 billion (and hardly any valuable assets) from 1MDB.

    The Malaysian government will also be liable for the losses and debts incurred by FGV. If FGV needs a bailout, the federal government has to step in either directly or indirectly via FELDA. This too will have a long-term effect on the financial position of the federal government.

    If Dr. Gale wants to point us towards administrative reforms under the GTP (which includes a National Key Result Area on reducing corruption) and towards global competitive rankings, then he cannot ignore how these reforms were ignored in the case of 1MDB and FGV.

    (vii) Are we better off in the long run?

    Dr. Gale’s definition of Najibnomics is that Najib’s economic legacy has been a positive one for Malaysia in the long-run. I beg to differ.

    In 5 to 10 years’ time, when our contingent liabilities have surpassed RM300 billion and when our debt servicing takes up more than 20% of our federal budget, will Dr. Gale still sing praises of Najibnomics? What if the government is forced to raise the GST to 10% or beyond in order to pay for the debts incurred during the Najib administration? Of course, this scenario may not come to pass but the possibility that it may occur has been completely ignored in Dr. Gale’s treatment of Najib’s economic legacy.

    Dr. Gale gives credit to Najib’s decision making process partly due to his training as an economist at the University of Nottingham. Indeed, he draws attention to the fact that “Najib is the first trained economist to head the government in the nation’s history”. This is not the place to question what aspects of economics Najib learned while he was studying at the University of Nottingham many moons ago or how he applied this knowledge during his career in politics and as Prime Minister. But I do wish that Dr. Gale had used his many years of training in writing about politics and economics to provide us with a more critical and comprehensive examination of Najibnomics and its long-term impact on Malaysia.

    Dr. Ong Kian Ming
    Member of Parliament for Serdang

    [1] http://www.thestar.com.my/news/nation/2010/05/27/idris-jala-msia-must-cut-subsidies-debt-by-2019-or-risk-bankruptcy/

    [2] http://www.themalaymailonline.com/malaysia/article/putrajaya-confirms-pembinaan-pfi-debt-pile-near-rm27b#HfILshAg8w3pwCIR.97

    [3] http://www.thestar.com.my/business/business-news/2011/01/13/pembinaan-blt-plans-rm10b-sukuk/

    [4] http://www.thestar.com.my/business/business-news/2016/06/11/malaysias-debt-burden-eases-as-loans-shifted-to-mortgage-agency/

    [5] http://www.refsa.org/focus-papers/a-critique-of-the-etp-part-3-iii-doubtful-epps-doubtful-achievements-and-due-diligence/

  • Message to Datuk Seri Panglima Said Salleh Keruak: 2017 is not 1990

    Media Statement by Dr. Ong Kian Ming, Member of Parliament for Serdang, on the 28th of August, 2017

    Message to Datuk Seri Panglima Said Salleh Keruak: 2017 is not 1990

    I was a little surprised to read that the Minister for Communications, Datuk Seri Penglima Said Salleh Keruak, responded to my media statement on the possibility of a 15% swing in the Malay vote against BN in the 14thGeneral Election. Usually, Barisan National (BN) Ministers do not like to respond to my media statements which contain facts and figures. I congratulate the Minister for Communications for his awareness of the swing in the Malay vote as we approach the 14th GE.

    I agree with a number of points he made in his blogpost.[1]

    Firstly, I agree that Pakatan Harapan (PH) cannot assume that young voters are more supportive of the opposition even though in GE2008 and GE2013, based on research on the voting streams, the support level for the opposition in the younger voting streams was higher than that in the older voting streams. It cannot be denied that the BN’s main weapon to court younger voters, the Minister of Youth and Sports, Khairy Jamaluddin, is well received among the younger generation, especially through social media. In my opinion, Khairy’s social media strategy is more effective than that of our Prime Minister’s. His popularity has taken another step upwards after ‘going to the ground’ to encourage and support our SEA Games athletes as well as representing our country in the sport of polo.

    Secondly, I agree that our country is not currently experiencing an economic crisis, at least for now, unlike the situation approaching GE1999.

    But Said Salleh should be aware that 2017 is not 1990.

    Prior to GE1990, the opposition parties only held 27 out of 177 parliament seats or 15% of total parliament seats. Prior to GE14, the opposition parties (including independent MPs) hold 89 out of 222 parliament seats or 40%.

    Prior to GE1990, the opposition did not control a single state government. Prior to GE14, the opposition are the state governments in three states.

    Prior to GE1990, all the media were controlled by the government. Prior to GE14, the online media is giving the mainstream media a run for its money in terms of the number of users. Social Media has given another channel to the opposition to send its message to voters.

    Prior to GE1990, the opposition was led by a former Minister of Finance who had left UMNO. Prior to GE14, the opposition is led by a former Prime Minister, two former Deputy Prime Ministers, the leader of the opposition, a former Menteri Besar (Kedah), a Menteri Besar (Selangor) and a Chief Minister (Penang).

    Prior to GE1990, the young leaders in the opposition were not well known by many. Prior to GE14, the young leaders in Pakatan Harapan who are 40 and under include Nurul Izzah, Syed Saddiq, Nik Nazmi, Wong Kah Woh, Hannah Yeoh, Zairil Khir Johari, Steven Sim, Yeo Bee Yin, Kasturi Patto and many others. Other than Khairy Jamaluddin, the most well-known young leader in the BN is arguably Jamal Yunos who aspires to run for the UMNO Youth Chief position.

    Prior to GE1990, GST did not exist while petrol, sugar, cooking oil and other subsidies were still in place. Prior to GE14, the implementation of the GST and the withdrawal of various subsidies have decreased the income of the people and increased the cost of living from the cities to the kampungs.

    Prior to GE1990, the Prime Minister at that time was not involved in any mega scandals which stained the country’s reputation all over the world. Prior to GE14, Malaysia is more well known as a kleptocratic state as a result of the 1MDB scandal where billions of ringgit are suspected to have been stolen from the Malaysian people and used to buy diamonds, bungalows, paintings and posters, and yachts, among others.

    All these factors do not mean that a Malay swing of 15% from the BN to the opposition will take place. But, one wonders, does Said Salleh’s blogpost show that UMNO itself is afraid that this Malay vote swing to the opposition will become a reality in GE14?

    Dr. Ong Kian Ming
    Member of Parliament for Serdang

    [1] https://sskeruak.blogspot.my/2017/08/analisis-ong-kian-ming-menarik-tetapi.html?m=1

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