• The 11th Malaysia Plan is not rooted in reality, is not transparent and is far from being a game changer

    Media Statement by Dr. Ong Kian Ming, MP for Serdang, on the 21st of May, 2015

    The 11th Malaysia Plan is not rooted in reality, is not transparent and is far from being a game changer

    I am completely underwhelmed by the recently tabled 11th Malaysia Plan. I was expecting a document that would chart a new course to the status of a developed nation and beyond. What was tabled was a document that is divorced from current political and economic reality, is totally not transparent and is far from being a game changer.

    One of the key economic challenges facing the country in 2015 and 2016 is the impact of low oil and gas prices on public finances. The unexpected and rapid fall in the price of oil to below US$40 per barrel at the end of 2014 forced the Prime Minister to announce some expenditure revisions at the beginning of the year. With the expectation of oil prices hovering below US$100 per barrel and low gas prices as a result of the increased production of shale gas in the United States, the revenue which the government derives from oil related sources – the petroleum tax, the income tax and the special dividend from Petronas – is expected to take a significant hit. Without a significant revision of long term government spending and without an increase in the recently introduced Goods and Service Tax (GST), I don’t see how the government can realistically expect to eradicate the budget deficit and the government debt to GDP ratio to below 45% by 2020.

    If government spending has not been adjusted to face the new economic realities of a low priced oil and gas regime, what more the other aspects of this plan?

    In my 11th Malaysia Plan wish list, published yesterday[1], I noted the importance of giving an honest picture of the country’s public expenditure and the need to highlight off-budget expenditure items as well as projected expenditure under public private partnership projects. I also asked for the full list of new development and infrastructure projects and the expected costs of each project in the 11th MP to be made available online. Sadly, no such list was produced. So we remain in the dark as to the number and location of new hospitals, schools, universities, technical and technical institutions which will be built under the 11th MP.

    The lack of transparency is all the more disappointing given that the Treasury is able to produce yearly estimates of budget expenditure by ministry during each budget session but the Economic Planning Unit (EPU) is not able to do the same in the 11th MP. In addition, I have received parliamentary replies in the previous sessions which have stated new projects and budget allocations that are specified to be under the 11th MP such as road upgrading projects. So much for more transparent government expenditure.

    Finally, the thrusts which are introduced as game changers in the 11th MP are not too far from business as usual. For example, the plan talks about ‘investing in competitive cities’ as a game changer but fails to outline specific proposals to give more power and financing to the local and city councils to achieve this aim. The plan talks about ‘uplifting B40 households towards a middle-class society” but says nothing substantive about reducing our dependence on foreign labour which continues to drag down the wages and job opportunities for low income Malaysians.

    The only positive point that is consistent with my wish list is the commitment to publish a multidimensional poverty index (MPI) in order to have a more comprehensive definition of poverty. But this is scant consolation in a context where all of the other wish list items have been ignored.

    Dr. Ong Kian Ming
    Member of Parliament for Serdang

    [1] http://ongkianming.com/2015/05/20/press-statement-wish-list-for-the-11th-malaysian-plan/

  • Wish list for the 11th Malaysia Plan

    Media Statement by Dr. Ong Kian Ming, MP for Serdang, on the 20th of May, 2015

    Wish list for the 11th Malaysia Plan

    Prime Minister Najib Tun Razak will unveil the 11th Malaysia Plan (2016 to 2020) tomorrow in parliament. This will be the Malaysia Plan that will take us to a developed nation status by 2020. Expectations therefore are very high that this plan will not only chart the course for us to achieve a developed nation status but to show the way forward thereafter.

    Below is my wishlist for what I hope will be covered in the 11th Malaysia Plan. Unfortunately, despite the importance of this plan, none of the opposition parties and members of parliament were consulted during the preparation of this plan even though we represent 52% of the voters in the country.

    1)      Wish One: A new definition of poverty

    Idris Jala, the CEO of Pemandu, was quoted as saying that the poverty in Malaysia has nearly been eradicated with less than 1% of the population living below the Poverty Line Index (PLI) [1] which is RM830 per month in Peninsular Malaysia, RM1090 in Sabah and RM920 in Sarawak.[2]

    Putting aside some valid concerns about the accuracy and representativeness of the data collected, I would like to see Malaysia adopt a new definition of poverty. Since Idris Jala likes to use international organizations such as the OECD and the World Bank as reference points, I would point him towards the OECD definition of poverty where “the poverty line is here taken as half the median household income.”[3] Developing countries place more importance on absolute poverty lines while developed countries place more importance on relative poverty lines.[4] Since Malaysia is moving towards the status of a developed nation, it would make sense for us to adopt a relative poverty measurement.

    According to the 2012 Household Income Survey, the median household income was RM3626 a month. Using the OECD relative poverty line, this means that the PLI for relative poverty in Malaysia would be RM1813 a month. The median household income of the bottom 40% was RM1852 a month. Using this new relative poverty definition, Malaysia’s poverty rate would measure in at almost 20% i.e. half of the bottom 40%.

    At the same time, I would advocate that the Economic Planning Unit establish a Multidimensional Poverty Index (MPI), also advocated by the OECD, which takes into account measures other than income such as poor housing conditions, the lack of durable assets and an inability to meet basic needs. The inaugural Malaysia Human Development Report 2013 also advocates for other ways of measuring poverty which the EPU can customise and use.[5]

    2)      Wish Two: Subsidy Rationalisation which is transparent and makes sense

    The government has made a big deal of its subsidy rationalization program including the recent abolishment of the petrol subsidy and the cuts in the electricity subsidy. What the government has not done is to review and reform the many other government subsidies which are given in a less than transparent but very costly manner.

    For example, the Ministry of Agriculture will spend an estimated RM2.2 billion in various types of subsidies on the paddy industry in 2015. Almost half a billion ringgit is spent on subsidizing the production of ST15 rice that is meant for low income groups. But much of this subsidized rice is ‘hijacked’ by wholesalers and repackaged into more expensive variants which are then sold in the market. Those who are ‘lucky’ enough to obtain the ST15 quotas can profit doubly – from the subsidy they receive from the government and from the profits they make from repackaging and selling the rice as a more expensive variant. Even though the Public Accounts Committee (PAC) has recommended that this ST15 subsidy program be abolished, the Ministry has denied this request and refused to even review the weaknesses of the program which were identified by the Auditor General’s Report.[6]

    If the government is serious about its commitment to subsidy rationalisation, it should demonstrate its political will by tackling subsidies which are costly and not given out in a transparent manner such as the various rice and paddy related subsidies. It is inconsistent to demand that consumers face the reality of market driven petrol prices but continue to give out subsidies which are ‘captured’ by well-connected middlemen.

    3)      Wish Three: Government Spending which is transparent and not “hidden”

    One of the most important aspects of any Malaysia Plan is that it outlines the budget allocation for major infrastructure and development projects for the country in the next 5 years. Allocations for new hospitals, schools, government buildings, roads, bridges and other infrastructure upgrades will be included as part of the 11th Malaysia Plan. As part of the government’s initiative to make its spending more transparent, the lists of development and infrastructure projects under the 11th Malaysia Plan should be made publicly available.

    In addition, it is imperative that the government gives an honest and transparent account of how much these projects are expected to cost and who will pay for these projects. For example, a number of large scale and expensive projects are already ongoing but do not appear anywhere in the official budget. The LRT extension, which is expected to cost an estimated RM11-12 billion and the MRT project, which is expected to cost RM36 billion for Line 1, are off-budget expenditure items, financed by special purpose vehicles or government owned companies. Ultimately, the bonds which are issued by these SPVs or these companies will have to be serviced by the government, especially since these large scale projects cannot generate sufficient revenue on their own.

    Other large scale projects in the pipeline include the LRT 3 extension, the MRT 2 line, possibly the MRT 3 line, the high speed rail (HSR) to Singapore and two possible large scale nuclear plants.

    The government has already spent close to RM30 billion in development expenditure using Pembinaan PFI Sdn Bhd, a 100% Ministry of Finance (MoF) company. This expenditure does not appear anywhere in the past budgets and is not even listed as a contingent liability. It is likely that the money was spent this way in order to avoid spooking the markets by going over the 55% Government Debt to GDP ratio.

    For the sake of transparency, the government should declare who will pay for these projects, how the financing of these projects will be raised and possibly shortfalls in the future which will have to be covered by the government.

    4)      Wish Four: Public Private Partnerships which are transparent and not biased towards the private sector

    The record of the Malaysian government in establishing Public Private Partnerships (PPP) which are transparent, fair and beneficial to all parties is abysmal, to say the least. Many of these PPP deals have been heavily biased towards the private sector parties, most notably in the contracts signed with the Independent Power Producers (first generation) and the various toll concessionaires.

    It would not be too much to ask for the contracts of these PPPs to be made publicly available before they are signed so that there is sufficient public scrutiny by interested parties. If the pricing for the bids for new power stations can be made public by the Energy Commission, why can’t the details of all the PPPs produced and negotiated by UKAS, the unit in charge of PPPs in the Prime Minister’s Department?

    Examples of such contracts which need to be disclosed are the West Coast Expressway (WCE), the various highways which have been approved by the PPP in the Klang Valley, the contract to build and run a mega-incinerator in Kepong, and possible contracts to build and operate two planned nuclear power stations.

    5)      Wish Five: Giving more power to the state and local governments

    One of the aspects of the development expenditure allocation is that sometimes, a significant proportion is left unspent. While some of the reasons for this unspent allocation may be valid – such as the inability to find a suitable contractor – other less acceptable reasons include unnecessary delays and inefficiencies at the level of the federal government. At the same time, state and local governments are limited in the ways in which they can raise and spend taxes for local development.

    It would be a game changer for the country if the 11th Malaysia Plan would include as one of its thrusts, an ambitious program for decentralizing of more power and allocating more revenue to the state and local governments including the power to raise additional revenue through taxes. This would allow greater room for cash strapped local authorities to raise and spend money locally especially on much needed development and infrastructure projects.

    Ideally, this decentralization would be accompanied by local government elections in order to increase the accountability of the local authorities to the ratepayers who are paying taxes to the respective local authorities.

    6)      Wish Six: Making clear the hard choices we must make

    My sixth and final wish is perhaps the most demanding from the perspective of the government. As we achieve the status of a developed country, hard choices must be made in different areas of public policy. We will demand for a cleaner, healthier environment but we must be willing to pay a higher electricity price to fund renewable energy. We will want to have access to higher quality healthcare that is accessible and affordable but someone will have to pay for better equipment and higher salaries for our specialist doctors. We want to have world class local universities but we must find ways to find additional funding for research and better pay to attract good quality academics.

    Wouldn’t it be great if we had a government that could honestly tell us about these hard choices we must make, the decisions that will be made by the government and the basis of these decisions?

    At the end of the day, is it not too much to ask for the government to produce an honest and transparent 11th Malaysia Plan to chart the path for our nation for the next 5 years?

    Dr. Ong Kian Ming
    Member of Parliament for Serdang

    [1] http://idrisjala.my/measure-poverty/

    [2] According to the 2012 Household Income Survey

    [3] http://www.oecd-ilibrary.org/sites/factbook-2010-en/11/02/02/index.html?itemId=/content/chapter/factbook-2010-89-en

    [4] http://www.unece.org/fileadmin/DAM/stats/documents/ece/ces/ge.15/2013/WP_17_OECD_D_En.pdf

    [5] http://mhdr.my/

    [6] http://www.freemalaysiatoday.com/category/nation/2012/10/15/rice-subsidies-not-working-out/

  • If Malaysia does not tolerate any form of human trafficking, why does it occupy the lowest tier (Tier 3) in the US State Department’s Trafficking in Persons 2014 Report?

    Media Statement by Dr. Ong Kian Ming, MP for Serdang, on the 16th of May, 2015

    If Malaysia does not tolerate any form of human trafficking, why does it occupy the lowest tier (Tier 3) in the US State Department’s Trafficking in Persons 2014 Report?

    Prime Minister Najib, in a statement released yesterday, in response to the escalating Rohingya immigrant crisis, said the following:

     “Malaysia does not and will not tolerate any form of human trafficking. Anyone found to be perpetrating this injustice and contravening our laws will be held accountable.”

    The Prime Minister’s statement is a joke given Malaysia’s atrocious record on human trafficking and the lack of political will to undertake meaningful steps in order to address these serious shortcomings.

    The US Department of State’s Trafficking in Persons Report had put Malaysia on the Tier 2 Watch List from 2010 to 2013. Being on the Tier 2 watch list means that Malaysia is a country which is one of the “governments do not fully comply with the Trafficking Victim’s Protection Act (TVPA)’s minimum standards, but are making significant efforts bring themselves into compliance with those standards”.  After not showing any progress to improve its human trafficking record, Malaysia was automatically downgraded to a Tier 3 status country in 2014 which is one of the countries “whose governments do not fully comply with the minimum standards and are not making significant efforts to do so.”[1]

    Among some of the problems highlighting in Malaysia are the following:

    “Refugees in Malaysia lack formal status or the ability to obtain work permits under Malaysian law, making them vulnerable to trafficking. Many incur large smuggling debts; traffickers use these debts to subject some refugees to debt bondage.”[2]

    The issue of human trafficking and the treatment continues to be a serious one in Malaysia despite the enactment of the Anti-Trafficking in Persons and Anti-Smuggling of Migrants Act 2007.[3] The effective enforcement of this Act[4] as well as underlying weaknesses in this Act that opens itself up to abuse have not been addressed.[5]

    This problem has become so serious that Malaysia’s participation in the Trans Pacific Partnership (TPP) could be jeopardized as a result of its Tier 3 status in the Trafficking in Persons 2014 Report.[6]

    As long as the Malaysian government refuses to have an honest examination of its policies towards refugees and migrants, our human trafficking record will continue to languish. The recent humanitarian crisis involving the Rohingyas is but the tip of a much larger iceberg of the human trafficking problem in our country which the Malaysian government, led by the Prime Minister, refuses to acknowledge even exists.

    Dr. Ong Kian Ming
    Member of Parliament for Serdang

    [1] http://www.state.gov/j/tip/rls/tiprpt/2014/226649.htm

    [2] http://www.state.gov/documents/organization/226847.pdf

    [3] http://www.agc.gov.my/Akta/Vol.%2014/Act%20670.pdf

    [4] http://www.thestar.com.my/story/?file=%2F2009%2F2%2F15%2Ffocus%2F3272925&sec=focus

    [5] http://www.malaysiakini.com/letters/142533

    [6] http://www.stuff.co.nz/world/americas/68376779/malaysias-human-trafficking-may-doom-trans-pacific-partnership

  • How representative is Malaysia’s Youth Parliament?

    Media Statement by Dr. Ong Kian Ming, MP for Serdang, on the 15th of May, 2015

    How representative is Malaysia’s Youth Parliament?

    The inaugural Youth Parliament (Parlimen Belia) recently concluded its first sitting for the year 2015. The establishment of a youth parliament is a positive development in our country especially in terms of encouraging debate among the younger generation on important issues and challenges facing the country. As an example, the representatives of the youth parliament were given space to debate the pros and cons of Malaysia’s possible entry into the Trans Pacific Partnership Agreement (TPPA) in the recent session.

    But the composition of the youth parliament itself highlights possible shortcomings in terms of its representativeness. In a parliamentary reply I received on the 10th of March, 2015, the following statistics were given:

    Table 1: Racial Composition of the 2015-2016 Youth Parliament

    Malay Chinese Indian Bumiputera  Sarawak Bumiputera  Sabah Orang Asli Others Total
    101 6 7 5 12 1 1 133
    75.9% 4.5% 5.3% 3.8% 9.0% 0.8% 0.8% 100.0%

    One can immediately see that some groups are obviously under-represented.  According to the initial estimates of the number of youth in each state, where each 100,000 youth would be given one representation, Sarawak was supposed to have 10 representatives. In the actual youth parliament, only 5 positions were allocated to Bumiputera Sarawakians.[1] Chinese youth, which make up 23.5% of the 15-40 age group, according to the 2010 census, comprise only 4.5% of the youth parliament. Indian youth, which make up 7.6% of the 15-40 age group, comprise also 5.3% of the youth parliament.

    Indeed, the under representation of minority groups in the youth parliament may have been even more skewed if a number of them were not directly appointed. In the original estimates, the youth parliament was supposed to have only 119 members. As many as 14 additional members may have been appointed, presumably by the Minister of Youth and Sports, whose ministry is responsible for this initiative.

    In addition, there is very little information on the identity of these youth parliament members since its own website does not show the results of the online youth parliament elections nor does it list down the names and background of the youth parliament members.[2] In this day and age of transparency, for an entity which is supposed to represent the younger, tech savvy generation, why is it so difficult to put on a website the identity of the youth parliamentary representatives with perhaps their Twitter handles, Facebook pages and a brief background description?

    It seems to be that outside of a very small inner circle, there is very little information about the activities of the youth parliament being disseminated to the larger youth population. Even the youth parliament’s official Twitter account (@MYparlimenbelia) has less than 6,000 followers.[3]

    One area where the youth parliament is MORE representative than the actual parliament is the percentage of female representatives. 23 out of 133 representatives are female (17%) which is more than the female representation in the Dewan Rakyat (10%).

    The youth parliament is a good idea and a good start in allowing more democratic discourse especially among the younger generation, but it should not evolve into an insider’s club that is not representative of the larger youth population in the country.

    Dr. Ong Kian Ming
    Member of Parliament for Serdang

    [1] It is not stated how many other youth representatives from the other races were from Sarawak

    [2] http://www.parlimenbelia.gov.my/index.php/2014-03-24-17-31-47/keputusan

    [3] https://twitter.com/myparlimenbelia

  • Top 5 in OECD rankings in Science and Math are Asian countries but Malaysia languishes in 52nd position – Are we still world class?

    Media Statement by Dr. Ong Kian Ming, MP for Serdang, on the 14th of May, 2015

    Top 5 in OECD rankings in Science and Math are Asian countries but Malaysia languishes in 52nd position – Are we still world class?

    In a recently released OECD rankings of Science and Math, which is the most comprehensive study to date, the top 5 places were all taken by Asian countries, namely Singapore (1st), Hong Kong (2nd), South Korea (3rd), Japan and Taiwan (joint 4th).[1]

    Meanwhile, Malaysia finds itself being ranked 52 out of 76 countries. In Southeast Asia, Malaysia is ranked below not just Singapore but also Vietnam (12th) and Thailand (47th). Malaysia was also ranked below Ukraine (38th), Turkey (41st), UAE (45th) and Kazakhstan (49th). (See Attachment 1 for full rankings of countries)

    The full details of this study will only be released at next week’s World Education Forum 2015 meeting in Seoul, Korea where the UN, led by UNESCO, will deliberate and decide on the post-2015 education agenda to replace the targets and objectives set out in the Millennium Development Goals (MDGs).

    But the initial findings should send a strong message to our Ministers of Education that we are far from being anywhere close to a ‘world-class’ education system at the primary, secondary or tertiary levels. The fact that our Ministers still insist that we have a ‘world class’ education system, in the face of overwhelming evidence stating otherwise, shows that we are still not acknowledging the full extent of the educational challenges we are facing.

    The lesson of Sweden should be a lesson to our Ministers. Sweden used to have one of the better education systems among OECD countries but experienced a sharp decline in its PISA and TIMSS scores from 2000 onwards. This decline prompted the Swedish government to ask OECD to review its education system in 2014.[2] In this latest OECD rankings, Sweden came in at the 35th position, one of the lowest ranked OECD countries.

    In the case of Malaysia, if our policymakers do not acknowledge the weaknesses in our current education system, we may even fall further behind our Asian neighbours and continue to lose out in terms of our economic competitiveness.

    Dr. Ong Kian Ming
    Member of Parliament for Serdang

    [1] http://www.bbc.com/news/business-32608772
    [2] http://www.oecd.org/sweden/sweden-should-urgently-reform-its-school-system-to-improve-quality-and-equity.htm

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