• Dissecting the ETP Annual Report (Part 1) — Grade A+ for obfuscation!

    Top marks for befuddling even highly-qualified Malaysians. PEMANDU released its annual report last month to an expected chorus of praise. An economist at a leading financial institution gushed that the ETP deserves an “A” for transformation. Our analysis however, finds that pretentious words and slick presentations, protestations of diligence and toil and selective representation of data obscure the true picture.

    Real GNI grew only 4.7 per cent last year. This is well below the 6 per cent per year growth rate called upon for the duration of the ETP. Nominal GNI growth, which includes inflation, was 12.3 per cent. But inflation does nothing for our real quality of life, and it is only because inflation was higher than expected that the nominal GNI growth rate hit double-digits.

    PEMANDU’s GNI “target” is questionable. PEMANDU claims it has outperformed as GNI last year exceeded its RM797 billion target. Strangely enough, this “target” was declared only after the actual data was already out. Furthermore, the target was exceptionally low. As far back as October 2010, the Ministry of Finance was already projecting RM811 billion GNI. It is easy to exceed targets when they are low, and only declared after the fact. No real value is added, though.

    Scoring is easy when you can shift the goalposts. The subterfuge by PEMANDU includes attempting to steal credit for 2010 economic growth, conflating GDP with GNI and using exchange rate movements to amplify performance. And these are just on the subject of headline economic performance. We shall uncover more ruses as we delve into the execution details. Stay tuned!

    ● PEMANDU’s RM797 billion nominal GNI “target” for 2011 was very low, and only declared in 2012, after the actual data was out!

    ● Real GNI growth was just 4.7 per cent. Nominal growth was higher because inflation was much higher than expected.

    ● The ETP focuses on GNI, but CEO Datuk Seri Idris Jala misdirected Malaysians by citing the stronger GDP numbers.

    ● Let’s be honest. Celebrate successes. But also admit mistakes and share the learning experience so we can all transform.

    Data integrity has reached abysmal depths

    PEMANDU claimed an achievement of astounding performance in the inaugural Annual Report of the Economic Transformation Program (ETP) released last month. Each National Key Economic Area (NKEA) achieved marks ranging from 65 per cent to a flabbergasting 170 per cent, depending on which of 3 self-defined criteria is applied.

    The Annual Report claims the ETP met or exceeded nearly all of the targets outlined in the ETP Roadmap Report released in October 2010. These achievements include:

    1. Surpassing its income and private investment targets for 2011:

    a) RM830 billion GNI (Gross National Income) vs RM797 billion target;

    b) RM94 billion private investment vs RM83 billion target;

    2. 72 out of the 131 EPPs (Entry Point Projects) taking off;

    3. EPP investments totalling RM179 billion, creating RM130 billion of GNI and nearly 314,000 new jobs.

    The “achievements” were impressive enough for analysts at the likes of financial institutions such as CIMB Group to give it an “A for transformation”. These analysts took PEMANDU at face value.

    Our analysis concludes that PEMANDU does deserve an A+ indeed, but for obfuscation. Data integrity and transparency have reached abysmal depths as far as the ETP is concerned. As we have seen all too often with PEMANDU and the ETP, the true picture is obscured behind pretentious words and slick presentations, protestations of diligence and toil and selective representation of data, sometimes bordering on misrepresentation.

    Read on for the foundations underpinning our strong words.

    PEMANDU exceeded its GNI “target” but delivered nothing

    The ETP continues to be plagued by data integrity problems which cast doubt on the self-proclaimed excellent performance. The first and most major issue is PEMANDU claiming credit for exceeding performance benchmarks which are declared only after the event:

    Prior to this Annual Report, PEMANDU had never explicitly stated that the ETP had a 2011 nominal GNI target;

    However, after the Ministry of Finance released the national income statistics showing RM830 billion of GNI, PEMANDU claimed that the RM797 billion GNI targeted by the ETP had been exceeded;

    Where did this RM797 billion target come from? It was not stated in the ETP Roadmap that launched it all in October 2010. Nor did PEMANDU mention it in its numerous communiqués and updates last year.

    Furthermore, the RM797 billion GNI “target” that PEMANDU claimed it exceeded for 2011 is exceptionally low:

    ● The Ministry of Finance (MoF) as far back as October 2010 had already projected RM811 billion GNI for 2011;

    ● The MoF’s projection was equivalent to 9.6 per cent nominal growth. PEMANDU’s “target” was equivalent to just 7.8 per cent nominal growth from 2010. This is lower than PEMANDU’s average 8.8 per cent annual growth rate target stated in the ETP Roadmap Report.

    PEMANDU might have exceeded its “target”. But what value did it deliver? The MoF was already projecting GNI higher than PEMANDU’s claim of RM797 billion “target”, even without the benefit of the ETP!

    And as we have highlighted, PEMANDU’s so-called “target” is underwhelming. Taken at face value, PEMANDU is dragging down the Malaysian economy instead of transforming it. How else would you explain PEMANDU’s target for national income (GNI) being smaller than the forecast made by the MoF?

    In response to an article recently published by Ong Kian Ming, PEMANDU senior analyst Marc Fong wrote the following on the methodology employed to calculate the GNI target:

    “The ETP’s true north has and will continue to be US$15,000 GNI per capita in 2020. The aggregate national GNI is the numerator but denominator is total population. In order to establish a yardstick by which we measure ourselves, we adopted a linear approach to calculating the GNI target that would indicate we were on the right path.”

    In that paper, Kian Ming questioned the basis for PEMANDU’s RM797 billion GNI “target” for 2011 and highlighted that it called for just 7.8 per cent growth, whereas the ETP Roadmap Report targets 8.8 per cent growth per year. Marc Fong’s reply fails to shed any light. Using a “linear approach”, GNI has to increase by RM78 billion every year under the ETP to reach the “true north” target. On this basis, the GNI target for 2011 should have been RM817 billion, and not RM797 billion. PEMANDU’s figures just do not compute.

    In our view, this is yet another demonstration of PEMANDU’s preference for obfuscation over clarification. A simple answer with numbers would have sufficed. Instead verbose language and tortuous arguments are employed to cloak its methodologies and data. It is easy to score when you can shift the goalposts.

    Scoring is easy when the goalposts can be moved to your advantage. And PEMANDU does move the goalposts to make itself look good. Sometimes the shift is obvious. At other times, it is insidious.

    A particularly sly example can be found in the very first “Transformation Blues” column by PEMANDU CEO Senator Datuk Seri Idris Jala. He wrote: “… our GDP grew by 7.2 per cent in 2010 and 5.1 per cent in 2011 and that’s an average of 6.2 per cent; we are meeting our Economic Transformation Program (ETP) target.” That statement contains two counts of serious intellectual dishonesty:

    1. Firstly, the ETP was launched only in late October 2010, which means that PEMANDU cannot possibly take credit for the 7.2 per cent economic growth in 2010, which was actually relatively high because it bounced off the low base of a recession year in 2009. So the focus really should have been just on 2011, where real GDP grew by just 5.1 per cent;

    2. Secondly, why did the good Datuk Seri talk about GDP (Gross Domestic Product) when the ETP focuses on GNI growth, not GDP. This misdirection is particularly devious given that PEMANDU just two weeks earlier in response to a REFSA critique said that “comparing GDP to GNI is incorrect” since “this is comparing apples and oranges, and this begs the question as to why REFSA is choosing to compare two different measures”.

    This wilful obfuscation between GDP (Gross Domestic Product) instead of GNI (Gross National Income) hides the fact that real GNI growth in 2010 and 2011 was just 3.9 per cent and 4.7 per cent respectively — which is far below the 6 per cent real GNI growth rate targeted by the ETP.

    And why are the goalposts in American dollars?

    Idris Jala, in his Transformation Blues column on May 7, said: “In 2010, our GNI per capita was US$8,126 and this rose to US$9,508, a 17 per cent increase in 2011. We are well on track to reach our high-income target by 2020.”

    Ordinary Malaysians live and work and spend their money mostly in Malaysia and in our domestic currency, the ringgit. A jump in our GNI per capita because the US$ weakens against the ringgit would not have a direct impact on the quality of life of most Malaysians. For example, let us say GNI per capita today is RM24,000, or US$8,100 based on an exchange rate of RM3.00:US$1. If the US$ were to depreciate to, say, RM2.80:US$1, our GNI per capita would increase to US$8,571 even though it remains unchanged in ringgit.

    The weaker US$ may help those who go abroad for their holidays, and may result in cheaper imported goods but those are big “ifs”. The value of the US$ hinges on many factors, most of which are beyond the control of PEMANDU. For example, a US-specific economic issue might result in the US$ weakening against most major currencies. If that were to happen, we might be richer in US$ terms, but not when compared to other currencies such as the euro, yen and Australian dollar because they all also appreciated in tandem.

    Which makes us wonder why Datuk Seri Idris chose to express the changes in our GNI per capita in US dollars instead of in ringgit terms. It is surely just coincidence that, measured in ringgit, the performance is a lot less impressive. In ringgit, GNI per capita increased by just 11.2 per cent in 2011.

    And by the way, the goalposts are not real

    Detractors might accuse us of carping — after all, 11.2 per cent might be lower than 17 per cent, but it is still a double-digit growth rate GNI per capita growth rate. Furthermore, total nominal GNI grew by 12.3 per cent, which at first glance, is far higher than the 6 per cent growth rate targeted by the ETP.

    This brings us to another very crucial point — the difference between nominal income and real income. Nominal GNI growth of 12.3 per cent includes inflation. Real GNI growth was only 4.7 per cent. This is well below the ETP’s target of 6 per cent.

    As we have pointed out, it is real income that matters. For example, if your nominal income goes up by 10 per cent, but inflation makes your cup of kopi-O and all the other things you buy 15 per cent more expensive, you are actually worse off!

    It’s time for an honest referee to step in

    PEMANDU asserts that it is exceeding the “transformative” and “ambitious” targets set by the ETP. The mainstream media goes along with the charade. That is not surprising. However, it is disconcerting that professional analysts and economists have also chosen to bury their heads in the sand and take PEMANDU’s assertions at face value. The lack of due diligence is disappointing.

    We are therefore extending our DEEDS framework to evaluate the ETP Annual Report and PEMANDU’s declarations of outperformance. In this Focus Paper, we focused on Data Integrity, starting with PEMANDU’s impact on national income (GNI). As we have seen:

    1. The ETP has FAILED when measured by real GNI growth. Real GNI grew by just 4.7 per cent in 2011, compared to the 6 per cent per year target cited in the ETP Roadmap Report;

    2. PEMANDU is GUILTY of obfuscation. CEO Datuk Seri Idris spotlighted GDP numbers which obscure the fact that PEMANDU had failed to deliver on GNI. This is especially insidious as just a fortnight before, PEMANDU had censured its critics for apparently not understanding the difference between GDP and GNI;

    3. PEMANDU steals credit when none is due. Datuk Seri Idris cited 2010 economic numbers as part of his achievements, but the ETP Roadmap Report was published only in October 2010;

    4. PEMANDU is DISCONNECTED from everyday reality in Malaysia. CEO Datuk Seri Idris sometimes chooses to measure his performance in American dollars. But it is ringgit that is important to ordinary Malaysians;

    5. PEMANDU sets LOW TARGETS that result in no value being added when they are exceeded:

    a) Its claim of RM797 billion “target” for 2011 GNI was lower than the MoF forecast of RM811 billion. Why was PEMANDU, which is supposed to add value, forecasting a number lower than the MoF?

    b) The professed RM797 billion GNI target for 2011 is on very shaky foundations. This “target” was only publicised after the GNI data was released by the MoF. Furthermore, it is very low, calling for just 7.8 per cent growth, well below the average 8.8 per cent targeted in the ETP Roadmap Report.

    In subsequent Focus Papers in this series, we shall cover Execution, Enterprise, Diversity and Socio-Economic Impact. We shall delve deeper into the investments numbers and status of EPPs (Entry Point Projects) and show more evidence of how PEMANDU and its CEO Datuk Seri Idris Jala selectively choose figures and data to show targets being reached but fail to acknowledge that other targets have not been reached.

    This is not a fault-finding exercise. It is crucial that PEMANDU, which is tasked with transforming the Malaysian economy, provides accurate information and works from solid foundations:

    1. Firstly, if PEMANDU gets even the headline GNI numbers wrong or is obfuscating these numbers, it makes one wonder whether other statistics touted, which are much more opaque, such as the achievements of each individual EPP, can be trusted. And if we don’t even know where we are, how can we plan for the future?

    2. Secondly, life is not a bed of roses. Things don’t always go according to plan, and yet, based on the ETP Annual Report, almost everything is hunky dory. Nothing is said about stalled or abandoned projects. Successes should be celebrated, but failures and missteps must be acknowledged and remedial action taken.  Learning from our mistakes will help us grow faster.

    As we will show later in this series, not everything is as rosy as the picture painted by PEMANDU and the ETP Annual Report.

    About this series and DEEDS

    Let’s evaluate PEMANDU on its DEEDS, published on January 25, 2012, introduced DEEDS and a series assessing PEMANDU and the ETP on the goals, plans and targets stated in the ETP Roadmap document. Doing so facilitates constructive discourse as it uses the framework which PEMANDU has chosen to work within. In keeping with the spirit of the alphabet soup of NKEAs, NKRAs, SRIs, EPPs, and GNI surrounding the entire GTP, we evaluated PEMANDU and the ETP on its DEEDS – Data transparency, Execution, Enterprise, Diversity and Socio-Economic Impact. The 8 Focus Papers in this series, together with related infographics and a Powerpoint presentation can be found at www.refsa.org.

    Note on PEMANDU’s response

    We wrote to PEMANDU seeking clarification on the methodology and assumptions used to calculate their claimed GNI target.  The only response has been Marc Fong’s article referred to herein. — REFSA (Research for Social Advancement)

    * Dr Ong Kian Ming holds a PhD in Political Science from Duke University and Economics degrees from the University of Cambridge and the London School of Economics. He is attached to UCSI University, which has been named as the project owner of two Entry Point Projects (EPPs). To avoid any potential conflict of interest, he will not make references to or analyse these two EPPs. 

    * REFSA (Research for Social Advancement) executive director Teh Chi-Chang holds a first class degree in Accounting & Financial Analysis from the University of Warwick, an MBA from the University of Cambridge and the CFA (Chartered Financial Analyst) charter. Prior to joining REFSA, he headed highly-regarded investment research teams covering Malaysia, and was himself highly-ranked as an analyst. 

    This article was published by The Malaysian Insider.

    Read Dr. Ong’s critiques of the ETP in full here.

  • Verify, verify, verify

     I love this quote from one of the basic rules of journalism — “If your mother says she loves you, check it out”. It’s a warning to journalists to develop a healthy dose of scepticism and to always verify facts even though it’s from a supposedly trustworthy source. I’m not a journalist but I’ve developed my own sense of scepticism after being exposed to academics in the United States, most of whom will jump at every opportunity to dismantle the supposed “proof” or “evidence” behind any new theory. It is perhaps not surprising that we in Malaysia have not developed the same healthy dose of scepticism when presented with a piece of information since we are taught from very young not to question authority figures. But when we are bothered enough to be healthily sceptical and make the extra effort to verify certain facts and figures, the results can be quite enlightening.

    Take, for example, the Economic Transformation Programme’s (ETP) Annual Report, which was released in April 2012. According to Exhibit C of this report (pg.8), the nominal Gross National Income in 2011 of RM830 billion surpassed its target of RM797 billion by RM33 billion or 4.1 per cent. In the same exhibit, nominal private investment in 2011 of RM94 billion was shown to have surpassed its target of RM83 billion by RM11 billion or 13.3 per cent. These figures together with other impressive results from the 12 NKEAs led many analysts to praise the ability of the ETP to over-deliver on its targets.

    But surprisingly, no one bothered to find out how the GNI and private investment targets were calculated in the first place, especially since the methodology of calculating these projected targets were not revealed in the ETP Annual Report (nor were they revealed in the ETP Roadmap Report which was released in October 2010). If one had bothered to do a bit of research, one would have realised that the RM797 billion nominal GNI target for 2011 seemed a bit low. After all, according to the Ministry of Finance’s Economic Report 2010/2011, which was published together with the 2011 Budget, the projected GNI in 2011 was RM811 billion. This was updated to RM820 billion in the Economic Report 2011/2012, published together with the 2012 Budget.

    Some simple maths would have shown that the RM797 billion is even lower than what the target would be using PEMANDU’s target of a 6 per cent real growth rate and a 2.8 per cent inflation rate. Since nominal GNI was RM739 billion in 2010, a nominal growth rate of 8.8 per cent would give us a target of RM804 billion, not RM797 billion (try it out for yourself, if you don’t believe me). Only with a nominal growth rate of 7.8 per cent, which is far lower than what the Ministry of Finance was projecting in 2010 as well as in 2011, would one arrive at the RM797 billion.

    In addition, a little bit of triangulation would have allowed us to see that the “achievement” of surpassing the nominal GNI target by 4 per cent is not a great accomplishment given that the real GDP growth rate of 5.1 per cent was at the bottom end of 5 per cent to 6 per cent real GDP growth rate projected by MoF in the Economic Report 2010/2011 and the 5 per cent to 5.5 per cent real GDP growth rate projection in the Economic Report 2010/2011. In fact, real GNI of RM540.9 billion was actually lower than the RM546 billion projected in the Economic Report 2010/2011 and the RM545.5 billion projected in the Economic Report 2011/2012. One’s suspicion would also have been raised by the fact that the real GDP growth rate of 5.1 per cent was shown in Exhibit 3 even though the economic output targets are expressed in GNI terms. Might it have something to do with the fact that real GNI growth was just 4.7 per cent in 2011, far below the 6 per cent real growth target set by the ETP?

    What about the RM83 billion private investment target? I found problems with this figure too. In the MoF’s Economic Report 2010/2011, private investment was projected to be RM86 billion in 2011. This was raised to RM94 billion in the Economic Report 2011/2012. A private investment target of RM83 billion assumes an increase in private investment of a mere RM4.3 billion or a 5.5 per cent increase from RM78.7 billion in 2010, lower than the projected nominal GNI growth rate. It seems quite unrealistic to assume that private investment would grow at less than the overall growth rate given that most companies would want to investment in new equipment and infrastructure when the economic is growing. (Note that private investment here refers to gross fixed capital formation such as buying new plant equipment and transportation vehicles.) Furthermore, under the 10th Malaysia Plan, nominal private investment was projected to grow at 16.2 per cent (Appendix, Table 4, pg362) which would give a target of RM91.4 billion in 2011 rather than the RM83 billion shown in the ETP Annual Report. The private investment figures for 2011 were indeed impressive. It grew by 19.4 per cent in nominal terms and 14.4 per cent in real terms surpassing the 10th MP targets of 16.2 per cent and 12.8 per cent respectively. But it grew by only 3.2 per cent above the 10th MP nominal growth target and not by 13.3 per cent, using the RM83 billion target indicated in the ETP Annual Report.

    I must admit that I had help in making these calculations and clarifying some concepts. I emailed a few friends who were economists. I also emailed a Bank Negara representative when I spotted an error in their private investment figure for 2011 which was published in their Monthly Statistical Bulletin (they corrected it almost immediately). I emailed a director in the Economic Planning Unit (EPU) to ask about the private investment figures and targets in the 10th MP (he also responded almost immediately). Finally, I emailed two directors at PEMANDU to ask how they calculated their GNI and private investment targets. Sadly, almost two weeks later, I have yet to hear from them.

    Perhaps what surprised me most is that all of the analyst reports I read did not even question the GNI and private investment targets as reported by the ETP. All of them praised the ETP for overachieving their targets including the GNI and private investment targets. I expected more from experienced economists whom I assumed would be very familiar with economic data and forecasting. Perhaps they should also take heed of the same basic rule outlined at the start of this article and develop a healthy scepticism towards information that is presented to them?

    * This article first appeared The Edge Financial Daily on May 24, 2012.

    * Ong Kian Ming holds a PhD in political science from Duke University. He is a lecturer and political analyst at UCSI University. 

    This article was published by The Malaysian Insider.
  • Non-resident voters: EC economises with ‘truth’

    I have been asked many questions with regard to the 3.1 million potential non-resident voters which I first highlighted at a press conference together with members of the Bersih steering committee on April 23. I subsequently wrote about this issue in greater detail here.

    In response to these questions, I would like to make the following points:

    1. That not all 3.1 million of these potential non-resident voters are dubious voters.

    2. There are many reasons why voters are not registered in the same constituency indicated by their IC address.

    3. That one of the reasons is because of politicians registering their supporters in their respective constituencies even though these voters do not and have never lived in these constituencies.

    4. A manifestation of this practice is the presence of addresses with many voters registered in them or voters registered without house numbers.

    5. That the Election Commission (EC) has decided to move to a new registration system where a new/transferred voter could only be registered in the constituency indicated by his/her IC address.

    6. That the EC still refuses to acknowledge the problem of non-resident voters as well as the problem of many non-resident voters being registered in the same address.

    7. The example of the locality where Mimos (Malaysian Institute of Microelectronic Systems) ‘misinterpreted’ the electoral data has a large number of newly-registered Kod 71 voters.

    8. It is difficult for politicians and the EC to locate voters without house numbers, especially in the urban areas.

    Not all are dubious voters but…

    I have never said that all these 3.1 million potential non-resident voters are dubious voters.

    NONEWhat I wanted to highlight was that there were 3.1 million voters in Peninsular Malaysia whose IC address did not correspond with their voting constituency and that these voters were identified in a National Registration Department (JPN in BM) project called ‘Projek SPR’.

    For those who doubt that I have access to this data, please see screenshots of the 11 CDs representing data for each state (right).

    There are many reasons to explain these potential non-resident voters. Table 1 lists three possible reasons according to three categories.

    This categorisation is not exhaustive since there are many other permutations and combinations which can be added. The key here is to identify the voters who can be classified as non-resident voters.


    Take a case under Category 1. A voter’s hometown is in Ijok, Kuala Selangor. He then moves to Section 16 under the Petaling Jaya Selatan parliamentary constituency in Selangor. He registers as a voter here but his IC address still remains in Ijok. This voter is a resident voter.

    This is the example which describes Selangor Menteri Besar Khalid Ibrahim whose IC address is in Ijok but whose voting constituency was in Petaling Jaya Selatan (now transferred to Lembah Pantai after the EC’s boundary correction exercise).

    Take a case under Category 2. A voter’s hometown is in Kota Bharu, Kelantan. He registers as a voter in the Kota Bharu parliamentary seat. He then moves to Bangi, Selangor. He changes his IC address to Bangi. But he maintains his voting constituency in his hometown seat of Kota Bharu. This voter is a resident voter.

    Voters in categories 1 and 2 are considered resident voters because they were residents in their respective constituencies at the time of their registration as voters. Even if they have subsequently moved away from these constituencies, they are still considered as resident voters as per Article 119 of the Federal Constitution.

    Please note that voters who have moved from one place to another but still maintains their IC address and voting constituency in their hometowns are not included among the 3.1 million non-resident voters identified by JPN. For example, the ‘Project SPR’ databases do not include the many Kelantanese who have moved to the Bangi area but whose IC address and voting constituencies are still in Kelantan.

    Hence, it would be wrong, as this blogger has done, to say that we should not be concerned about this 3.1 million voters because there were still 1.1 million Malaysians who were still holding on to their old Malaysian ICs in 2005 or the fact that there were 3.6 million intra-state migrants according to the 2000 population.

    NONEThe 1.1 million Malaysians who still had old ICs in 2005 would not have been included among the 3.1 million if their IC address was the same their voting constituency.

    Just because one upgrades from the old IC to a new IC does not mean that the person’s IC address would have changed. In addition, some of the 3.6 million intra-state migrants in 2000 would have maintained their voting constituency according to their IC address. Just because they have moved, does not mean that they would have changed their voting constituency or their IC address.

    Inter- and intra-state migration certainly increases the complexity in defining and understanding the problem of non-resident and resident voters and I appreciate the efforts of this blogger for pointing it out.

    However, it is voters in category 3 which I am most concerned about since these are non-resident voters who have never lived in the constituencies they were registered in 2002 when the Project SPR exercise was completed. Those in category 3 are those which I would define as dubious voters.

    If it wasn’t broke, why fix it?

    It was widely acknowledge that political parties and politicians on both sides of the political divide were responsible for registering supporters in their own constituencies so as to boost their chances of retaining or winning these constituencies even though these voters did not live in these constituencies.

    Standards of ‘proving’ that a voter who wanted to register in a particular constituency actually lived in that constituency were rather lax. Some sort of bill (telephone, electricity) of a person’s name and address was all that was required.

    NONEIn many cases, even this requirement was waived. There are also many voters who were allowed to register without indicating their house number even though they were registered in urban areas.

    The EC themselves tacitly acknowledged this problem when it decided to move to a new registration system where a voter could only be registered at constituency indicated by his or her IC address. After all, if the previous system was working fine, why change the registration criteria in 2002?

    The results of ‘Projek SPR’ which was carried out by JPN prior to the change of the registration system in 2002 validated these concerns since it revealed that as many as 37% (3.1 million out of 8.2 million) voters in Peninsular Malaysia at that time had IC addresses that was different from the voting constituencies.

    Even if a third of these voters were dubious voters, i.e. those in Category 3 in Table 1 above, it would mean that one million voters were registered in constituencies which they have never lived in.

    Without a further audit, we simply do not know the percentage of voters according to the different categories listed in Table 1. To my knowledge, the EC has never tried to find out, even after being given this data by the JPN back in 2002.

    Many voters in one address

    A clear manifestation of the problem of non-resident voters is the presence of house addresses with many registered voters since politicians – before 2002, when there was less detailed scrutiny on the electoral roll – would regularly register their supporters in a limited number of addresses in their respective constituencies.

    As a result some of these houses have Malay, Chinese and Indian registered voters who in all likelihood do not even know of each other’s existence. In some cases, some of these voters were not even allocated a house number but was registered using a street name.

    What is both sad and troubling is the fact that the EC has never done anything, at least publicly, to find out the extent of this problem, much less do something about it. It is not rocket science.

    Anyone armed with even a rudimentary command of Excel could go through an electoral roll and highlight houses with more than X number of voters registered in them.

    Mimos was asked to identify possible problems in the electoral roll as part of the Parliamentary Select Committee on Electoral Reform. Their analysis revealed 324 addresses with more than 100 voters and another 938 addresses with between 51 to 100 addresses.

    The PSC recommended that the EC publishes the names of all of the voters in these addresses so that these voters can step forward to verify their identity and for the EC to report back, in 45 days, to a specially set up parliamentary select committee which will oversee the cleaning up of the electoral roll.

    NONEWhat was the EC’s response? In a booklet entitled ‘The Truth Behind the Accusations and Lies towards the Election Commission’ (henceforth referred to as ‘The Truth’), under Allegation 6, the EC responded by saying that Mimos “had misunderstood the large number of electors in a locality, so as to mean that all the electors in that locality are registered under one address”.

    The example given by the EC was the locality of Kampung Melayu Majidee in the parliament seat of Johor Bahru, which was assumed to have just one address with more than 50 voters. The EC said that “In reality, this locality has tens of complete addresses, as well as incomplete addresses that have all been combined to form a locality.”

    What is stated by the EC is technically correct. When examining in Quarter 3 (Q3) 2011 electoral roll, I found 96 names in the locality named “Kg Melayu Majidee” (Locality Code: 1604407014). 74 of these voters had complete addresses, 22 others did not.

    In Table 2, I show 30 voters from this locality with complete house addresses, including house numbers.


    Foreigners in the house?

    At the same time, I also found a list of 22 names in the same locality which did not have any house numbers in the same locality. (See Table 3 below)


    A few points of concern immediately jumps out when comparing Tables 2 and 3.

    Firstly, there are indeed many identifiable roads in this particular locality, according to Table 2. If this area is relatively developed and it should be since it is in the Johor Bahru constituency, then one wonders why is it that there are no roads as well as house numbers attached to the voters in Table 3.

    Secondly, the voters without any house numbers in Table 3 were all registered in May and June 2011. One would have assumed that their ICs would give the full address of these voters given that this place is in the urbanised seat of Johor Bahru.

    Thirdly, and more disconcerting, all of the voters in Table 3 have Kod 71 in their ICs indicating that they were not born in Malaysia. (Looking at their names, it is likely that they are of Indonesian ‘heritage’ e.g. Nur’asiyah). By contrast, note that none of the voters in Table 2 have Kod 71 in their ICs.

    Having aroused my suspicion, I then proceeded to examine newly-registered voters for this specific locality for Q4 2011 and Q1 2012. The results are show below in Table 4 and 5.


    According to Table 4 (above), there a total of 32 voters were in the Q4 2011 electoral roll update in this locality. Of these 32 voters, 30 were newly-registered voters and all of them do not have house addresses and all of them have Kod 71 in their ICs.

    The only voter with a house address (No 24) was taken off this electoral roll because she has moved to another constituency. The only non-Kod 71 voter added to the electoral roll is not a newly-registered voter but who move to this voting constituency.


    According to Table 5 (above), there were six newly-registered voters in this locality in the Q1 2012 electoral roll update. Two voters, both of whom are not Kod 71 voters, have house numbers. The other four voters, who are Kod 71 voters, all do not have house addresses.

    To recap, what we have in this locality, which was highlighted in the EC’s recent booklet to tell “the truth”, is a situation, as for Q1 2012, where of the 134 registered voters in this locality, 74 voters have complete addresses (house numbers and street names), none of whom are Kod 71 voters, while the remaining 57 voters do not have house numbers or even street names and all except one are Kod 71 voters who have been newly registered in the past one year.


    The EC, rather than giving reasons on why Mimos had misinterpreted the electoral roll data, should be extremely concerned that Mimos found more than 50 names in this locality without house addresses in an urban locality.

    What is more, they should have done exactly what I did here, which was to examine the voters who did not have house numbers and would have found that all of them were recently registered and with Kod 71 in their ICs.

    This should have prompted them to do a serious audit in this area to determine if the ICs of these voters have been legitimately issued and why so many of them are staying in one locality without any house number. Instead, the EC choose to look the other way by giving excuses.

    This is just one locality. What about the other 1,261 localities with more than 50 registered voters? What would we find if the EC reveals what these localities are?

    Locating voters without house numbers

    The EC may be right in saying that there are voters who live in kampongs who do not have house addresses. But there are probably as many voters who live in semi-urban and urban areas where there are house numbers for each locality or street, but whose details do not show any house numbers.

    What this means it is very difficult for a candidate who is running for office or an incumbent MP or Adun (state assemblyperson) to identify these voters to ascertain if they are indeed resident voters (or were resident voters).

    For example, 22 voters from a locality in urban Petaling Jaya Utara (Locality Name: Jalan 1 Kg Bahru, Sg Way (Jalan 1-25), Locality Code: 1063510001) are shown in Table 6 below. All of them do not have house numbers and all of them were registered before 2002.

    Malays, Chinese and Indians are all represented in this list of voters. Without the house numbers, how is one supposed to locate these voters?

    If someone wants to object to the inclusion of some of these voters into the electoral roll during the quarterly updates (for newly-registered voters without house addresses), how will the EC send letters to these voters so that they can turn up to during the verification hearing?

    These technical but important questions were not answered by the EC in their ‘truth’ booklet.


    Tip of the iceberg

    To recap, I started this article by pointing out that not all of the 3.1 million potential non-resident voters are dubious voters. Under the previous voter registration, it was relatively easy to register non-resident as voters and that even if one-third of these 3.1 million voters are non-resident, it would constitute one million voters.

    One manifestation of non-resident voters can be found in houses with many registered voters (10 is usually a good cut-off point) or urban and semi-urban localities with many voters without house addresses.

    The EC thought that this problem could be reduced by forcing everyone to register under their IC address. This change was introduced in 2002. But even after this change, the ‘legacy’ issue of non-resident voters has not been resolved as seen by the voters without house addresses in one locality in Petaling Jaya Utara in Table 6.

    More worryingly, in the locality which the EC used as an example of how Mimos ‘misinterpreted’ the electoral roll data, 55 out of 57 newly registered voters since May 2011 did not have house addresses and 54 out of these 55 voters had the Kod 71 in their IC numbers, indicating that they were not born in Malaysia.

    This may just be the tip of the iceberg. If the EC is willing to release the names of the other 1,261 localities with more than 50 registered voters, my team at the Malaysian Electoral Roll Analysis Project (Merap) are more than willing to analyse these localities and present the results for public consumption.

    ONG KIAN MING is the project director of the Malaysian Electoral Roll Analysis Project (Merap) and a lecturer and political analyst at UCSI University.

    This article was published by Malaysiakini.

  • Book Review – PKFZ: A Nation’s Trust Betrayed

    Which is the biggest financial scandal in Malaysian history, someone recently asked me. Without hesitation, I replied, Port Klang Free Zone or PKFZ. This scandal could potentially end up costing the Malaysian taxpayer RM12.5 billion according to the PWC position review report. In real terms, the financial losses associated with PKFZ may be slightly less than the BMF scandal (RM2.5b in 1983), the Maminco scandal (RM1.6b, 1980s) and Perwaja (RM10b in accumulated losses, 1990s) but none of these scandals can challenge PKFZ in terms of financial creativity and the number of high profile politicians involved.

    The breadth and scope of this scandal is revealed in all its ‘glory’ in former Port Klang Authority (PKA) chairman and Subang Jaya state assemblyman Dato’ Lee Hwa Beng’s book – PKFZ: A Nation’s Trust Betrayed, written with former journalist Lee Siew Lian.

    The contribution of this book can be found in four areas.

    Firstly, it provides an insider’s account of what caused this seemingly well conceived project – to replicate the success of the Jebel Ali Free Zone in Dubai – to turn into the financial fiasco we now known as PKFZ. As the former PKA chairman brought in to clean up the mess, as a professional accountant and as a former politician, Lee knew where to look for the skeletons in the cupboard, so to speak. And with access to the full reports involving this case, he knows exactly what pertinent information needs to be recorded for the sake of posterity including details on key events and personalities.

    Secondly, with the able help of his co-author, Lee Siew Lian, Lee is able to piece together all the relevant information in a manner that is relatively easy to understand, especially given the complexity of this case. Here, the various timelines associated with the complicated land sale, firstly from the UMNO controlled Koperasi Pembagunan Pulau Lumut Bhd (KPPLB) to Kuala Dimensi Dimensi Sdn Bhd (KDSB), then controlled by Bintulu MP, Tiong King Sing, and then from KDSB to PKA, are particularly useful as are the timelines associated with the letters of support issued by former transport Ministers, Tun Ling Liong Sik and Dato’ Seri Chan Kong Choy in conjunction with the signing of the agreements and issuing of bonds at various stages to build the PKFZ infrastructure with KDSB.

    The timelines, together with the financial information highlighted, reveal how PKA was seemingly ‘duped’ not just once or twice but many times by KDSB. PKA not only paid above market rates for the PKFZ land but was also charged above market interest rates for the deferred payments.

    PKA was further ‘duped’ into paying for the development of the whole parcel of land in a single stage rather than the more financially prudent option of developing the project in stages. Time and time again, KDSB, the party who sold the PKFZ land to PKA, was appointed as the main contractor for an ever expanding scope of development work, without any open tenders. PKA would end up owing KDSB RM4.9 billion, which includes the land as well as development costs, almost 5 times more than the estimated RM1 billion debt level that was deemed sustainable for PKA.

    Thirdly, this book is instrumental in highlighting the exact roles and degree of responsibility of the key players in this grand saga. Given that PKA came under the MCA controlled Ministry of Transportation, it was not surprising that many MCA leaders were named. I was particularly intrigued by episodes documenting Tun Ling’s insistence on buying the land from KDSB instead of the cheaper option of the Federal Government acquiring that piece of land, which was also the preferred option of the Ministry of Finance.

    Other than the two former Ministers of Transportation who are being charged in court, the potential conflict of interest involving Dato’ Chor Chee Heung, the current Minister of Housing and Local Government, who was both PKA chairman as well as a non-independent director of KDSB’s sister company, Wijaya, for a period of 4 months was also highlighted.

    The potential conflict of interest involving the then speaker of the Selangor state assembly, Dato’ Onn Ismail in holding the post of chairman of KPPLB while he was the speaker as well as that of Sementa assemblyman, Dato’ Rahman Pahlil, who took over as the chairman of KPPLB and was later appointed as a PKA director are also highlighted.

    Not all of the names mentioned in this book played negative roles. The support which was given to Lee by former MCA president and Minister of Transportation, Dato’ Seri Ong Tee Keat, despite the pressure put on Ong by the cabinet, was emphasized at various junctures in the book. Lee also credited four DAP politicians – Lim Kit Siang, Ronnie Liu, Teng Chang Kim and Tony Pua – for the roles they played in highlighting the improprieties associated with this case at different points in time.

    Perhaps more important than all the information revealed is the fact that there are still many issues left to be resolved, which is this book’s fourth contribution. For example, the contents of the Skrine Task Force report to turn around PKFZ, which was given to Prime Minister Najib, has not been publicly revealed. The Special Task Force on this scandal, headed by the Chief Secretary to the government, has had no public announcements since its formation in 2009. PKA continues to pay KDSB so that it can pay its bondholders despite the fact that there are outstanding lawsuits by PKA taken out against KDSB. There are also recent allegations that PKA has decided to drop these lawsuits against KDSB as well as its decision to withdraw a complaint made against Rashid Asari & Co to the Bar Council, over potential conflict of interest in the legal firm’s role in acting for both KDSB as well as PKA in the PKFZ land sale. The publication of this book comes at an appropriate time, given that interest in this scandal seemed to have waned as public attention has moved elsewhere. It is a timely reminder that the taxpayer is still on the hook for the mounting losses of PKA and that many of those involved in this case have yet to be charged or convicted.

    If I had any criticism of this book it would be the fact that it badly needs a list of references as well as proper labelling of the various timelines and shareholding arrangements. It would make it much easier for researchers and even the casual reader to find the relevant information after the first reading of what is a forensic and creative accounting page turner.

    I have no doubt that there is other relevant information which Lee has access to which he still has not revealed, perhaps to avoid getting sued and also because of the on-going trials of Ling and Chan. I would be the first in line if he is ever to publish a follow up book revealing new information on this scandal that threatens to be the biggest in Malaysian history. In the meantime, I recommend all taxpayers, current and future, to read about how part of your hard earned tax dollars is being spent.

    * Ong Kian Ming holds a PhD in political science from Duke University. He is currently a lecturer and political scientist at UCSI University. 

    This article was published by The Malaysian Insider and the Selangor Times.

  • EC has not been honest in its rebuttals

    Bersih 3.0 may have been a success in terms of its ability to attract more than 100,000 Malaysians from all walks of life to come out in support of clean and fair elections but the hard work of ensuring that this aspiration is translated into reality needs to continue.

    All the more so when the Election Commission continues to ignore the many problems highlighted by the Malaysian Electoral Roll Analysis Project (Merap) with regard to the electoral roll.

    The EC has recently published a booklet with 12 points of rebuttal against allegations that the electoral roll is full of problematic registrations and that the EC has been complicit in not cleaning up the electoral roll.

    In this article, I want to highlight two of the rebuttals to illustrate that the EC has not been honest in its responses which reflects its inconsistent policies in managing the electoral roll and electoral boundaries.

    EC’s boundary ‘correction’ exercise

    One of the EC’s rebuttals is that it has not redrawn any electoral boundaries since such an exercise would require parliamentary approval. What the EC has been doing instead, is to correct previous errors of putting voters in certain localities in the wrong parliamentary and state constituency.

    This was done after the introduction of a new Electoral Geographic Information System (Egis) in 2004. The EC used the power given to the chief registrar under the Section 25(3) of the Elections (Regulation of Electors) Regulations 2002 where it is state that:

    “Where an error has resulted in any person being registered as an elector of a registration area which is not a registration area in respect of which that person should have been registered, the Chief Registrar may enter that person’s name in the principal electoral roll or the supplementary electoral roll for the appropriate registration area.”

    NONEThis was the reason given for why Selangor Menteri Besar Khalid Ibrahim’s voting area was shifted from Petaling Jaya Selatan (P105) to Lembah Pantai (P121) – Section 16/2 is part of Wilayah Persekutuan rather than Petaling Jaya.

    The ‘correction of boundaries’ according to the EC has affected 19,342 voters in the whole country.

    I have three concerns with regard to the EC’s rebuttal on this point.

    Firstly, if the Egis system was introduced in 2004 after the 2003 delimitation exercise, why were these corrections not done until long after the 2008 general elections?

    The following is the EC’s statement in Bahasa Malaysia with regard to the introduction of the Egis system:

    “SPR menyedari kedudukan beberapa lokaliti yang tersalah letak di dalam bahagian pilihan raya hanya selepas Sistem Egis (Electoral Geographical Information System) digunapakai dalam tahun 2004.”

    And again, when referring to the correction to the Section 16/2 locality and shifting it from PJ Selatan to Lembah Pantai:

    “Apabila sistem Egis (Electoral Geographical Information System) dilaksanakan pada tahun 2004, SPR mula menyedari kesilapan penentuan kedudukan lokaliti berkenaan.”

    The fact that the EC only choose to make these boundary ‘corrections’ more than four years (after the 2008 general election) after the introduction of Egis is very troubling and concerning.

    Affected voters not informed

    Secondly, what is more troubling is the fact that the EC did not notify the 19,342 voters which were affected by this exercise. They only wrote to the political areas in the areas which were affected.

    Again, this raises concerns in regard to the intent of the EC to keep voters informed about their respective voting constituencies. Is it the responsibility of the politicians or is it the responsibility of the EC to keep voters informed of the changes made?

    Most reasonable people would argue that the EC has the obligation to inform voters when they have been shifted from one voting constituency to another since this means that their political representative at the state (for the non-Federal Territories voters) and at the parliamentary levels have been changed.

    The EC has since stated that it would send letters to each of these voters to inform them of these changes before the next general election. We hope that these letters will be sent in a timely fashion and that all of these affected voters will be duly notified.

    Thirdly, the EC has not been consistent and transparent in this boundary ‘correction’ exercise.

    When they informed political representatives that localities have been shifted in and/or out of their respective constituencies, they failed to provide updated maps of the newly configured constituencies showing exactly where the new localities are placed.

    This lack of transparency points to the possibility that the EC has not been transparent in terms of the standards used for these boundary ‘correction’ exercises.

    I shall firstly illustrate one case involving the movement of localities which does not make sense according to pre-existing electoral boundaries in the state seats of Seri Setia (Kelana Jaya parliament) and Kota Damansara (Subang).

    Map 1 below highlights one of the areas affected by this boundary ‘correction’ exercise in the state seat of Seri Setia (N32).


    Map 2 below highlights the localities which have been transferred from Seri Setia to Kota Damansara (N39).


    The electoral boundary of Seri Setia is demarcated by the major highways highlighted in red. This is the pre-existing boundary which was used in the 2004 and 2008 general elections.

    What is perplexing is that Saujana Resort, which lies on the southern side of the old Subang airport road (highlighted in red at the top of the map) has now been shifted to Kota Damansara, which lies on the northern side of the old Subang airport road.

    I fail to see why Egis would show that this locality should be shifted to another constituency when it clearly falls within the boundary of the Seri Setia state seat.

    What is also perplexing is that two localities that are to the east of the Jalan Monfort highway boundary (highlighted in red at the left of the map) – Pusat Bekalan Polis Shah Alam and Pangsapuri Melewar – have also been shifted to Kota Damansara.

    If the EC had shifted these two localities to Kota Anggerik (N40), it could have at least been more defensible. It does not make sense for these two localities to be moved up to Kota Damansara when the Taman Glenmarie locality, which is closer to the Kota Damansara seat, remains in Seri Setia.

    This is just one example of how the boundary ‘correction’ exercise done by the EC does not seem to be using consistent and transparent standards which includes using natural boundaries like rivers and other man-made boundaries such as major roads to demarcate constituencies.

    Another example which shows the EC inconsistency in adopting a consistent set of standards in its boundary ‘correction’ exercise is the inclusion of a locality in Bukit Jalil, which should be under the Bandar Tun Razak parliamentary seat, not the Lembah Pantai parliamentary seat.

    A new locality called POLIS (Pusat Tahanan Sementara Bukit Jalil – Kod Lokaliti: 1210017701) was created in 2011. As its name indicates, this police holding facility is located in Bukit Jalil.

    But the almost 500 police postal voters in this locality were allocated to the Lembah Pantai parliamentary constituency, a marginal constituency which is likely to be contested by Federal Territories Minister Raja Nong Chik.

    The EC would be hard pressed to explain why its boundary ‘correction’ exercise failed to put this locality into the Bandar Tun Razak parliamentary constituency, especially since it falls outside the current boundaries of the Lembah Paintai parliamentary seat.

    To ensure that this boundary ‘correction’ exercise is not a stealth delimitation exercise, the EC should publish maps of the areas affected indicating clearly the localities which have been shifted as well as why they have been shifted.

    42,051 doubtful voters in electoral roll

    After initially promising to erase 42,051 voters whose information and status was not clear according to the National Registration Department (NRD) records, the EC retracted on this and said that they had no right to remove these names even though Section 25 2(g) of the Elections (Regulation of Electors) Regulations 2002 states that the chief registrar may “strik(e) out the name of any person who, in the opinion of the Chief Registrar, is not entitled, for any reason, to remain or be in the principal electoral roll or the supplementary roll”.

    This figure was later revised downwards by 1,248 voters to 40,803 when these names publicly displayed and the NRD was able to update their records accordingly.

    However, the EC has failed to account for why 14,577 names were deleted in the Quarter 2 2011 because their records were not active in NRD – “rekod tidak aktif di JPN (NRD)”. Not that these names were not deleted because the voters in question had died – that figure was reported in a separate category.

    Hence, if in one quarter, the names of almost 15,000 voters were deleted because their NRD records were not active, why was it the case that over 42,000 voters whose status was not identifiable by the NRD in another quarter not dealt with in the same manner?

    Again, this calls into question the EC’s consistency in applying the same standards for the same cases.

    What is also disconcerting is the fact that a very high percentage of the voters among the 42,051 not deleted as well as the 14,577 deleted voters were very old voters. For example, 13,183 or 90.4 percent of the 14,577 deleted voters were over the age of 70. Similarly, 33,421 or 79.5 percent of the 42,051 not deleted voters were above the age of 70.

    It also raises questions about the utility of publicly displaying these records when most of the voters among the 42,051 are probably not very mobile and would not be able to ‘verify’ the fact that they are still very much alive. And if they are dead and do not have family who happen upon this list, then there is no way that their names can be removed from the electoral roll.

    It would be much more effective for the EC to form investigative teams, together with NRD, to try to track down as many of these voters as possible instead of just relying on public displays and relying on politicians and political parties to track down these voters.

    As long as the EC is not pro-active in ‘going to the ground’, the list of ‘dubious’ voters, including those who are aged over 100 years old, will continue to populate the electoral roll. The identity of these voters can easily be used by irresponsible parties to cast a vote.

    Dr ONG KIAN MING is project director of the Malaysian Electoral Roll Analysis Project (Merap).

    This article was published by Malaysiakini.

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