• Dissecting the ETP Annual Report (Part 7): Perception Manipulation and Deception Unit

    At PEMANDU, perception trumps reality. This very powerful government agency values perception and spin above genuine transformation. Starting with the headlines, its rosy communiqués trumpeted strong economic numbers in 2011 rather than admit that real gross national income (GNI) growth was below target, let alone explain the causes or articulate measures to close the gap.

    PEMANDU lied in its annual report. It took “100 per cent” credit for the construction of a RM1.9 billion wafer fab plant that was never built. Malaysian official statistics have, until now, been accepted as reliable. This is crucial for investor and public confidence. We hope PEMANDU is not pressuring other government agencies and EPP owners to also dress up their numbers, which will ultimately lead to a catastrophic collapse in confidence in Malaysia.

    Agreed-upon-Procedures (AUP) are not worth much. Contrary to general public perception, PricewaterhouseCoopers (PwC) did not conduct a full audit. It conducted AUP, the ambit of which was so loose that PwC failed to detect a huge RM1.9 billion wafer fab plant that was never built. How many other less audacious lies slipped through the net?

    PEMANDU is driving a delusion. The very foundations of the ETP are doubtful now that PEMANDU has confessed to errors that slashed 45 per cent off the incremental GNI claimed. Also, some so-called transformative EPPs were chosen based on exaggerated numbers. However, PEMANDU’s biggest “success” is manipulating Malaysians into believing that the ETP is transformational, when in fact, workers will take a mere 21 per cent of the incremental income the ETP promises to create, down from their 28 per cent share currently.

    ● PEMANDU is misrepresenting economic performance. The fact is, real growth in 2011 was below PEMANDU’s target.

    ● Even worse, PEMANDU is guilty of telling lies, including the whopper of taking “100 per cent”‘ credit for the construction of a RM1.9 billion wafer fab plant that was never built.

    ● PEMANDU is transforming Malaysia for the worse. It values style over substance, glosses over important issues and misrepresents and deceives.

    ● PEMANDU’s biggest success is manipulating Malaysians into believing the ETP will transform their lives. The reality is the bulk of the incremental national income that PEMANDU promises to generate will go to the elites.

    Masters of Perception Manipulation and Deception 

    PEMANDU has continued to misrepresent information and deceive the Malaysian public in its communiqués and responses to our critiques of the Economic Transformation Programme (ETP) Roadmap and 2011 ETP Annual Report. It has accused REFSA of “nit-picking” and being “an old broken record” but failed to address very crucial points in its convoluted and verbose replies:

    PEMANDU still refuses to acknowledge that real economic growth last year was below its target. Instead, it misleads Malaysians by highlighting nominal growth, which was boosted by inflation. Inflation makes us poorer, not richer. It is real economic growth that makes us richer, not nominal growth and PEMANDU has not articulated any measures to get real growth back on track;

    PEMANDU has not retracted the blatant lie in the ETP Annual Report where it took “100 per cent” credit for the “construction of a 200mm wafer fab” plant that was never built. This is an audacious lie, pretending there was a huge RM1.9 billion investment that never existed.

    Misdirection is endemic at PEMANDU, even in the face of hard facts and analysis. It still has not explained the extremely slow pace of actual investments in the ETP in its first year.

    Truth has been the biggest casualty in PEMANDU’s drive to deliver “Big Fast Results”. Huge, audacious lies are told, goalposts shifted and targets retrospectively set at arbitrarily low levels following which “outperformance” is claimed. Failed projects are still kept “in the books” to boost the headline numbers.

    But the facts can only be suppressed for so long. It is now becoming increasingly apparent that PEMANDU is driving a delusion — that the government can drive the economy.

    PEMANDU manipulates perception on economic reality 

    The perception manipulation by PEMANDU starts with the headline data. It is extremely worrying that this powerful agency within the Prime Minister’s Department prefers to shift the goalposts (by quoting GDP instead of GNI) and misrepresent performance (using US$ and nominal numbers; and dragging in irrelevant 2010 data) rather than face the issues honestly.

    If development and transformation are the genuine aims, then Malaysians would be far better served if PEMANDU acknowledges the reality that economic performance is weaker than it targeted, determines the causes and suggests remedial measures to help economic growth get back on track.

    Here are two examples of PEMANDU’s manipulation of economic data to create the perception that it is performing well.

    PEMANDU: GDP grew by an average of 6.2 per cent in 2010 and 2011; we are meeting our ETP target.

    Fact: Real GDP grew by only 5.1 per cent in 2011, below PEMANDU’s 6 per cent target. 2010 GDP growth was stronger, but should not be included by PEMANDU because the ETP was launched only in October 2010.

    Fact: PEMANDU’s use of GDP (Gross Domestic Product) here is odd. The ETP uses GNI (Gross National Income) to measure economic performance, not GDP.

    Fact: Real GNI grew by just 4.7 per cent in 2011, even lower than real GDP growth and well below PEMANDU’s 6 per cent target.

    The use of GDP instead of GNI is particularly insidious, because PEMANDU, in an earlier 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”.

    Subsequently, PEMANDU decided to go back to GNI, but shifted the focus to nominal instead of real growth:

    PEMANDU: Our GNI per capita 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.

    Fact: Exchange rate movements will change our income in US$ but make no real difference to our quality of life. For example, a salary of RM3,000 per month could be US$900, US$1,000 or US$1,100, depending on how weak the US$ is against the ringgit. However, that fluctuation in US$ makes no difference to the ordinary Malaysian on a day-to-day basis.

    Fact: In ringgit, GNI per capita rose by 11.2 per cent. This may appear impressive, but nominal growth includes inflation, which makes us worse off, not better off. Nominal growth looked high, but it is real growth that matters, and that was very slow. How will real growth be speeded up? PEMANDU has not said anything.

    Liars roam free at PEMANDU 

    PEMANDU: “100 per cent” credit for the construction of a 200mm wafer fab plant.

    Fact: The RM1.9 billion plant was never built.

    More than two months after we unearthed the shocking case of PEMANDU taking “100 per cent” credit in its Annual Report for a RM1.9 billion wafer fab plant that was never actually built, PEMANDU still has not formally retracted that barefaced lie.

    Subsequent to our exposé, PEMANDU said in its ETP blog that capacity increases were facilitated via other companies.

    PEMANDU’s response following our exposé of the non-existent wafer fab

    At the project level, we rejoiced at having a promising early Entry Point Project, L-Foundry Malaysia, a Malaysian-German joint venture that was to move and relocate expensive European wafer fabrication operations to the more economical climes of the Kulim High Tech Park …

    Due diligence was done. The JV management team went all out, and this involved German, Malaysian, Japanese, and American stakeholders. And all the support agencies were in high gear too. But as Murphy would have it, the German partners ran into operational difficulties which obviously they had not anticipated, and were forced to pull out.

    The project as originally envisaged was scrapped. But that was never the end game. The L-Foundry Malaysia project was a means to an end. Our intended “true north” was to increase Malaysia’s wafer fab capacity to create a more balanced semiconductor manufacturing ecosystem, and MIDA did precisely that. They shifted to Plan B, and facilitated capacity increases via other companies.

    Excerpt from http://etpblog.pemandu.gov.my/posts/2012/04/17/keeping-it-real-the-etp-as-a-microcosm-of-life/ Written by Chris Tan, Director, Electrical & Electronics NKEA, PEMANDU. Retrieved 27 July 2012

    There is a huge difference between a gleaming new RM1.9 billion wafer fab plant and “capacity increases via other companies”. “100 per cent” credit is not deserved if the total investment is less than originally targeted. Furthermore, increasing capacity at existing companies is less valuable than introducing a new player which can broaden and deepen the industry.

    The officers involved in this shameless act must be severely sanctioned. PEMANDU is a unit within the Prime Minister’s Department, which means it represents the prime minister himself, the leader of our government. The integrity of the information emanating from this department must be beyond reproach. A clear message must be sent that the government, and especially the prime minister himself, will not tolerate falsehood.

    Data and information integrity is of paramount importance for any government undertaking, and even more so for an ambitious programme such as the ETP. Given PEMANDU’s clear bias towards rosy data, and its unwillingness to admit to misreporting even when confronted, can we be sure that this extremely powerful agency did not and will not pressure other government departments as well as the EPP project owners to overstate their data and “achievements” in order to boost PEMANDU’s apparent performance?

    We must be wary of going down the old Soviet-style path of arbitrary target setting and professed achievements, or more recently, of Argentinean-style suppression of reported inflation to delude ourselves into thinking that our economy is in better shape than it actually is.

    Misdirection is endemic at PEMANDU 

    PEMANDU seems to be driving the nation through smoke and mirrors. One minute dazzling reports appear with a poof, but when questions are raised, they are adroitly deflected with a puff.

    We are incredulous that PEMANDU continues to misdirect and misrepresent in the face of hard facts and analysis. We had revealed that actual investments under the ETP were just RM12.9 billion — a mere 7 per cent of the RM179 billion committed that PEMANDU trumpets. However, rather than address the issue, PEMANDU chose to misdirect.

    PEMANDU: We have been clear in differentiating committed investment and realised investment in our announcements. To suggest we are misleading the public is irresponsible. 

    Fact: The seminal ETP 2011 Annual Report, which was the document we analysed and quoted, made absolutely no mention at all of realised investments, let alone acknowledge that they were exceptionally low. Instead, the Annual Report focused on how investments were well ahead of target.

    It was only in ONE ETP Update last year that realised investments were mentioned.

    Trotting out misleading comparisons and statistics is unproductive and intellectually dishonest. If transforming our nation is the goal, PEMANDU must take the bull by the horns and address the root causes of why the private sector is so slow to invest, especially since many of the ETP projects are so-called “shovel ready”.

    Were dodgy projects chosen as EPPs? 

    Our analysis forced PEMANDU to confess to erroneous assumptions that resulted in the GNI and job creation numbers being slashed by a shocking 45 per cent and nearly 20 per cent respectively.

    The whopping 45 per cent reduction in GNI contribution means that the original forecast was nearly double the level that is now considered realistic. It appears that some EPPs had presented forecasts that extremely exaggerated their potential.

    This throws into question the whole selection process and the very foundations of the ETP. PEMANDU’s much vaunted “labs” selected EPPs based on their economic projections. Now, it might be surmised that some EPPs with exaggerated forecasts were chosen instead of other projects which were more realistic and honest.

    This massive error in the GNI impact calculations was discovered during the Agreed-Upon-Procedures (AUP) method of validation that independent professionals PricewaterhouseCoopers (PwC) conducted with PEMANDU for the 2011 ETP Annual Report.

    The terms of the AUP have never been made public, but it appears that they were so loose that PwC could not compel PEMANDU to clearly admit to the error. Even more worrying is the fact that the procedures and/or PwC’s examination were so cursory that they failed to detect the massive lie of taking “100 per cent” credit for the construction of a multi-billion ringgit wafer fab plant that was never built. One wonders how many more cases of undeserved credit slipped through the AUP validation process.

    PEMANDU is driving a delusion

    PEMANDU is driving a delusion — that the government can drive the economy. There is nothing intrinsically wrong with setting ambitious targets. Ambitious targets underpinned by realistic plans, a ruthless focus on execution and good people take us to levels we would not have thought possible. But it is somewhat hubristic, not to mention delusional, to think that a government agency comprising 80 or so people can boost the economic growth rate by 20 to 50 per cent annually!

    This is even more so when the agency in question, PEMANDU, claims that it is merely an aggregator expediting the real work which is being undertaken by the private sector. Malaysia does not operate under a command economy system whereby production can be cranked up by a percent or two in order to meet designated KPIs given from “above”.

    PEMANDU is now failing for the same reason that command economies and central planning failed. Modern economies are far too complex for any single agency to administer. PEMANDU is now coming up against that economic reality. The splendid plans and EPPs developed and approved in the much vaunted PEMANDU labs are not so easily implemented, even with the red tape cutting skills of the highly-qualified and well-paid professionals at PEMANDU.

    Private sector plans are dynamic and change according to economic conditions. Some projects may grow bigger, some may be downsized and, yes, entire companies may go bankrupt, as was the case with LFoundry and the wafer fab project. But PEMANDU sweeps such economic realities under the carpet in its drive to deliver “Big Fast Results”.  Blatant lies are perpetrated and targets are arbitrarily set at low levels so that they can be shown to have been “exceeded”. Projects which have gone awry still remain ‘in the books’ to boost the headline numbers.

    2 + 2 = 5  

    The phrase “two plus two equals five” or “2 + 2 = 5” is a slogan used in George Orwell’s “1984” as an example of an obviously false dogma one must believe, similar to other obviously false slogans by the Party in the novel. It is contrasted with the phrase “two plus two makes four”, the obvious — but politically inexpedient — truth.

    The Party interrogator of thought-criminals, O’Brien, says of the mathematically false statement that control over physical reality is unimportant. So long as one controls one’s perceptions to what the Party wills, then any corporeal act is possible, in accordance with the principles of doublethink (“Sometimes they are five. Sometimes they are three. Sometimes they are all of them at once”).

    “In the end the Party would announce that two and two made five, and you would have to believe it. It was inevitable that they should make that claim sooner or later … Not merely the validity of experience, but the very existence of external reality, was tacitly denied by their philosophy. 

    “The heresy of heresies was common sense. And what was terrifying was … that they might be right. For, after all, how do we know that two and two make four? Or that the force of gravity works? Or that the past is unchangeable? If both the past and the external world exist only in the mind, and if the mind itself is controllable — what then?”

    At this juncture, we come full circle and draw attention once again to the document that started it all, the Economic Transformation Programme: A Roadmap for Malaysia released by PEMANDU in October 2010. At that glitzy launch, and in the ensuing months, we too were enamoured with the velvety presentations and carrot of high-income nation status that PEMANDU dangled in front of us.

    But here’s the rub. Cast aside our critiques and assume that PEMANDU achieves all it says it will as per its Roadmap. The lives of ordinary Malaysians will still not be transformed. Workers will take a mere 21 per cent of the new wealth, down from 28 per cent currently. The fact that the ETP benefits corporations and the elites more than ordinary Malaysians has been very “professionally” glossed over.

    We close this series with another extract from “1984”:

    “The name of every organisation was cut down into a single easily pronounced word that would preserve the original derivation. For example, the Records Department was called Recdep, the Fiction Department Ficdep, the Tele-programmes Department Teledep and so on. 

    This was not done solely with the object of saving time. Even in the early decades of the twentieth century, telescoped words and phrases had been a characteristic of political language; and it had been noticed that the tendency to use abbreviations of this kind was most marked in totalitarian countries and totalitarian organisations. Examples were such words as Gestapo, Comintern and Agitprop. 

    It was perceived that abbreviating a name narrowed and subtly altered its meaning by cutting out most of the associations that would otherwise cling to it. The words Communist International, for instance, called up a composite picture of red flags, barricades, Karl Marx and the Paris Commune. The word Comintern, on the other hand, suggests merely a tightly-knit organisation and well-defined body of doctrine. 

    Comintern is a word that can be uttered almost without taking thought, whereas Communist International is a phrase over which one is obliged to linger at least momentarily. In the same way, the associations called up by a word like Minitrue are fewer and more controllable than those called up by Ministry of Truth. This accounted not only for the habit of abbreviating whenever possible, but also for the almost exaggerated care that was taken to make every word easily pronounceable.”— The Principles of Newspeak

    Try saying Performance Management and Delivery Unit instead of PEMANDU. What connotations come to you? Do share on our Facebook page and/or tweet us at @inforefsa.

    Previously, in our dissection of the 2011 Annual Report of the ETP …

    Part 1 (The “D”ata in our DEEDS framework) highlighted how PEMANDU very adroitly masked the fact that real national income growth last year was below its target;

    Part 2 (“E”xecution) unearthed the shocking case of PEMANDU lying and taking “100 per cent” credit in its Annual Report for a RM1.9 billion wafer fab plant that was never built;

    Part 3 (“E”nterprise) uncovered the startling gap between committed and actual investments. The RM12.9 billion of actual investments is a mere 7 per cent of the RM179 billion committed investments that PEMANDU prefers to emphasise;

    Part 4 (“D”iversity) revealed that PEMANDU’s “recalibration” of the ETP figures is better described as a massive collapse. The incremental GNI (Gross National Income) and job creation numbers were slashed by 45 per cent and nearly 20 per cent respectively. Were some EPPs selected based on grossly exaggerated forecasts?

    Part 5 (“S” Socio-economic impact) showed that capital investment per employee (CIPE), an indicator of the quality of jobs created, is very low under the ETP. We see this as reflecting the fact that many ETP projects are “recycled projects” that are not fundamentally transformative.

    Part 6 summarised our recommendations for PEMANDU’s benefit, and highlighted the positive outcomes of our analyses and critiques, which PEMANDU had characterised as “nit-picking”.

    DEEDS was conceived earlier this year when we published a series assessing PEMANDU and the ETP on the goals, plans and targets stated in the ETP Roadmap document. 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 Critique of the ETP Roadmap Series, together with related infographics and a powerpoint presentation can be found at www.refsa.org. — REFSA

    * 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.

  • Dissecting the ETP Annual Report (Part 6): Recommendations for Pemandu

    Is asking for a few more facts and some additional background too much? Pemandu has accused us of “nit-picking” and not providing alternatives. That conveniently shifts the focus to other issues while Pemandu ignores our very pertinent questions and suggestions. We summarise here three recommendations, and remind Pemandu of the positive outcomes of our nit-picking.

    Recommendation #1: Be clear about targets, data and methodology.

    Pemandu now has three different targets for national income by 2020. Please be clear, so we can all work towards the same ultimate target. Also, Pemandu should declare now its GNI, investment and job creation targets for 2012 and 2013. This is to prevent a repeat of the discrepancies surrounding 2011, when its `targets’ were declared only after the actual numbers were out.

    Recommendation #2: Remove doubtful EPPs.

    Acolytes of Pemandu might believe success is assured. But the reality is that some businesses, even EPPs, will fail. These EPPs must be removed and the impact on GNI (Gross National Income), investment and job creation targets quantified. If the targets are not revised down, then Pemandu must explain how it will fill the gaps caused by the failed EPPs.

    Recommendation #3: Show clear examples of transformation.

    The impressive investment and GNI numbers trumpeted by Pemandu do not show how the EPPs are transformative in nature. For example, a proper evaluation of the TUKAR initiative under the Wholesale and Retail NKEA would go a long way in convincing Malaysians that this EPP has transformed the operations of the small retailers that participated.

    Recommendations for Pemandu:

    • Pemandu now has three different national income targets for 2020. Please be clear, so that we can all work together towards the same goal.

    • Some EPPs will fail. These must be removed and their impact on income, job creation and investments quantified.

    • Show us examples of transformation. Dazzling headline GNI and investment numbers in the billions do not illuminate how our lives are being transformed for the better.

    Previously, in our dissection of the 2011 Annual Report of the ETP …

    1. Part 1 (The ‘D’ata in our DEEDS framework) highlighted how Pemandu very adroitly masked the fact that real national income growth last year was below its target;

    2. Part 2 (‘E’xecution) unearthed the shocking case of Pemandu lying and taking “100 per cent” credit in its Annual Report for a RM1.9 billion wafer fab plant that was never built;

    3. Part 3 (‘E’nterprise) uncovered the startling gap between committed and actual investments. The RM12.9 billion of actual investments is a mere 7 per cent of the RM179 billion committed investments that Pemandu prefers to emphasise;

    4. Part 4 (‘D’iversity) revealed that Pemandu’s ‘recalibration’ of the ETP figures is better described as a massive collapse. The incremental GNI (Gross National Income) and job creation numbers were slashed by 45 per cent and nearly 20 per cent respectively. Were some EPPs selected based on grossly exaggerated forecasts?

    5. Part 5 (‘S’ Socio-economic impact) showed that capital investment per employee (CIPE), an indicator of the quality of jobs created, is very low under the ETP. We see this as reflecting the fact that many ETP projects are ‘recycled projects’ that are not fundamentally transformative.

    Why is it so hard for Pemandu to furnish a few more facts and some additional background?

    Today, in our series critiquing the 2011 ETP Annual Report, we respond to Pemandu’s accusations of “nit-picking” and not providing alternatives. Those are unfair and unconstructive accusations. Doing so allows Pemandu to shift the focus to other issues while it ignores the very pertinent questions Refsa asked.

    Pemandu had presented, in its own words, a very “ambitious” programme to transform Malaysia. As loyal citizens, we took it upon ourselves to delve in detail into the Economic Transformation Programme Roadmap and related material to understand what this powerful unit in the Prime Minister’s Department had planned for us.

    We found numbers that did not add up, projects that looked dubious and decisions, which made little economic sense. However, we did not call for the ETP to be trashed. We asked for clarifications of fact and additional background to help us understand Pemandu’s process and the targets.

    In addition, we also made various recommendations, which Pemandu seems not to have noticed. For Pemandu’s benefit, we summarise here our recommendations, as well as remind it of the positive outcomes of our “nit-picking”.

    Three recommendations for Pemandu and the ETP

    Here are three recommendations as to how Pemandu can be more credible and effective in its attempts to convince us that the ETP is indeed transforming the nation’s economy and not a glossy publicity initiative.

    We hope Pemandu will respond constructively and address our suggestions clearly and directly instead of obfuscating and questioning our motives as it has tended to do in its lengthy and often convoluted responses to our critiques.

    Recommendation 1: Be clear and transparent about targets, data and methodology

    If Pemandu is confident of its investment, GNI (Gross National Income) and job creation figures that have been validated by PricewaterhouseCoopers, then it should not have any problem whatsoever making known the following information:

    1. Be clear about its ultimate target. Right now, Pemandu has communicated three different targets for GNI per capita by 2020 – US$15,000, US$16,500 and US$17,138 . This is a huge range, and begs the question, Can we aim if don’t even know our target?

    2. Release key data for each and every EPP, before and after “recalibration”. As a result of our critique, Pemandu admitted to erroneous assumptions that forced it to slash its forecast for GNI impact by 45 per cent. In addition, the job creation forecast was cut by nearly 20 per cent. These massive changes warrant greater explanation and must not be glossed away as “recalibration”.

    Were Entry Point Projects (EPPs) with exaggerated forecasts chosen instead of other projects which were more realistic and honest? To clear such doubts, Pemandu should release the original and revised investment, GNI and job creation figures for each EPP, in order that analysts can clearly see which EPPs were most over-optimistic in their original projections.

    3. Declare clearly now its GNI, investment and job creation targets for 2012 and 2013 as well as the methodology and key assumptions underlying the targets. This will help prevent a repeat of the doubts cast on Pemandu’s claims of overachievement of economic growth and investment targets for 2011 as these targets were only declared after the actual numbers were already out, and were also low .

    Particularly pertinent at this point is whether Pemandu will increase its overall GNI and private investment targets, as it should, following the revisions made in May 2012 by the Department of Statistics to the historical GDP and GNI figures. For example, GNI in 2011 was revised upwards by 3.4 per cent, from RM830.7 billion to RM859.1 billion. If it does not increase its targets accordingly, at the stroke of a pen, Pemandu is already closer to overachievement.

    We also recommend that Pemandu set GNI, GDP and per capita targets in RM rather than US$ to avoid misleading changes arising from exchange rate movements . As we have previously noted, increases in our GNI per capita in US$ terms merely because the US$ weakened against the Ringgit do not benefit the majority of Malaysians.

    4. Show the details of actual performance relative to its annual targets. For a start, give us the breakdown of the actual investments in 2011 by EPP. Going forward into 2012 and 2013, provide the actual GNI, investment and job creation numbers for each EPP and not just the headline total numbers.

    Such data and disclosure would go a long way to validate the progress of the ETP, in addition to the traffic light methodology used in the ETP Annual Report 2011.

    Recommendation 2: Create a mechanism to remove doubtful EPPs

    Followers of Pemandu can be forgiven for believing success is assured. New EPPs are announced with much fanfare, and the various updates by Pemandu crow about investments, GNI and job creation with barely a hint of difficulties.

    The reality is that some businesses, even EPPs, will fail. Pemandu must establish guidelines on how it will deal with EPPs that are floundering. It must have a mechanism to remove doubtful projects such as the LFoundry wafer plant and perhaps even the Karambunai Integrated Resort City and Tanjong Agas Oil & Gas hub if these are found to be ‘dud’ projects which may end up wasting taxpayer funds in addition to not being transformative.

    Pemandu must also be clear about the impact of the removal of these EPPs on its GNI, investment and job creation targets. If the targets are not revised down, then Pemandu must articulate how it intends to fill the gaps caused by the failed EPPs.

    In the words of one of its directors, Pemandu must “keep it real” and not live in a fantasy world where achievements and professed overachievements are trumpeted while underachievements are glossed over or ignored completely.

    Recommendation 3: Show clear examples of transformation

    Pemandu’s voluminous communiqués focus on headline numbers ― particularly investments and GNI. While impressive on the surface, these numbers do not show how the EPPs are truly transformative in nature, either at the high or lower end of the economic value chain.

    For example, Pemandu highlights a handful of successes to buttress its claims that the TUKAR initiative under the Wholesale and Retail NKEA is a game-changer. A few swallows do not a summer make. What is needed is a proper evaluation of ALL the outlets which have undergone this initiative to determine what percentage of outlet owners enjoy higher profit margins after deducting for the costs of renovation and upgrading as part of TUKAR, and if the positive results can be sustained over time.

    Another initiative which Pemandu can and should use as an example of a game-changer is the River of Life EPP under the Greater KL/Klang Valley NKEA. This could be a textbook example of how an agency like Pemandu can deliver significant value-add by coordinating the various government agencies and departments whose approval and cooperation are needed to develop considerable stretches of real estate along the Klang River and convert the currently non-productive land into economically vibrant areas.

    The positive outcomes of “nit-picking”

    Refsa’s “nit-picking” and harping on issues like “an old broken record” has been very useful. It has forced Pemandu to admit to data errors and omissions and highlighted fundamental problems with the ETP and some of its EPPs. We set out here three positive outcomes of our tenacity.

    Nit-picking Benefit #1: Pemandu’s GNI target becomes a little more real

    We pointed out way back in January 2012 that:

    a .Pemandu’s ‘True North’ of RM48,000 GNI per capita by 2020 is a nominal target that would have been reached even without the presence of the ETP, based on growth rates historically achieved when Pemandu was not in existence. We said the ‘True North’ should be higher if Pemandu is adding value;

    b. Pemandu’s GNI target was inconsistent with its own underlying assumptions. Based on its 6.0 per cent and 2.8 per cent per year real growth rate and inflation assumptions, the GNI per capita target for 2020 should be RM54,145, not RM48,000.

    Following our “nit-picking”, there has been a subtle shift in Pemandu’s emphasis:

    a. In a June communiqué, it focused on achieving RM1.7 trillion total GNI by 2020 , which translates into RM53,800 GNI per capita using Pemandu’s population projection of 31.6 million;

    b. Pemandu CEO Datuk Seri Idris Jala in his Transformation Blues column in July referred to US$16,500 GNI per capita which translates into RM52,800 GNI per capita .

    We shall ignore the fact that Pemandu now has three different GNI targets. What is more significant is that following our exposure of how easy it was to achieve the RM48,000 target which was initially much reported and repeated as the ‘True North’ figure, Pemandu has subtly moved its bar a little higher.

    Nit-picking Benefit #2: Questionable target-setting and EPPs brought to light

    Our “nit-picking” and questioning of why Pemandu’s RM797 billion GNI target for 2011 was lower than that of the Ministry of Finance forced Pemandu to reveal its linear approach in absolute terms in setting that target.

    This linear approach in absolute terms makes poor economic sense, as illustrated in our infographic ― Is Pemandu’s True North Taking Our Economy South? A linear approach in percentage terms is more sensible.

    Our analysis has also caused Pemandu to admit to errors in its targets, which had the effect of making its ‘outperformance’ appear better:

    a. Firstly, it understated its professed private investment target for 2011. “We acknowledge that the figure should be RM86 billion and not RM83 billion,” it said;

    b. Secondly, Pemandu conceded that it wrongly compared the nominal growth of private investments achieved in 2011 to the real growth rate targeted in the 10MP which again resulted in its performance appearing to be better than it really was. “We could have been clearer that 19.4 per cent is a nominal figure for private investment growth.”

    We also revealed issues with some EPPs. For example, the group which is developing the RM9.6 billion Karambunai Integrated Resort City EPP is currently being sued by investors in another project. The sum in litigation is a mere RM18 million, which begs the question as to the group’s ability to undertake a project of nearly RM10 billion in investment value, for which taxpayers are providing RM600 million of support funding.

    Nit-picking Benefit #3: Misdirection and untruths brought to light

    Most importantly, we revealed that Pemandu was not being truthful about its progress. The most serious was the case where Pemandu claimed that the construction of a 200mm wafer fabrication was 100 per cent complete in Dec 2011 when in actual fact the company that was supposed to build and operate this RM1.9 billion wafer fab, LFoundry, had already pulled out of the project because it was in the process of being declared insolvent!

    * 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.

  • Malaysia safest country in South-East Asia. Really?

    The issue of crime, especially in the urban areas, has once again surfaced as a hot political issue.

    NONEHome Minister Hishammuddin Hussein was quoted as saying that the fear of crime is a result of ‘public perception’ while Pemandu chief executive officer Idris Jala was reported as having asked the media to focus more on the crimes that have been solved, rather than those which have been committed.

    Meanwhile, DAP MP for Petaling Jaya Utara Tony Pua seems to have been given conflicting sets of crime data on Selangor and has called for Pemandu and the Home Ministry to release detailed crime statistics by the type of crime and the places where they were committed.

    It is very difficult to question the validity of the crime statistics since this data is collected, compiled and later disseminated to the various ministries and later the public at large by the police. An in-depth audit is required in order to get a better handle on the veracity of these statistics.

    However, what we can do is to take a closer look at some of the international indexes which the Government Transformation Programme (GTP) and various ministers including the prime minister, the home minister and the Pemandu CEO have used as ‘external validation’ that the National Key Results Area (NKRA) on reducing crime is working as planned.

    This ‘evidence’ falls apart upon closer examination.

    1) Global Peace Index

    Take the Global Peace Index (GPI) as an example. The 2011 Government Transformation Programme Annual Report says:

    “In the fifth edition of the Global Peace Index (GPI) released in May 2011, Malaysia was declared the most peaceful country in South-East Asia and the fourth safest in the Asia Pacific region behind New Zealand, Japan and Australia.

    “The country rose three spots to 19th place, supplanting Singapore as the highest-ranked South-East Asian nation.

    “In its GPI rankings, the Sydney-based Institute for Economics and Peace also placed Malaysia as the 19th safest and most peaceful country out of 153 nations worldwide. This is the fifth successive year that Malaysia has improved on its GPI score.”

    None other than Prime Minister Najib Razak has used Malaysia’s ranking on the latest 2012 GPI to argue that “one of our country’s achievements that we should be proud of is our ranking by the Global Peace Index, which ranked Malaysia as the safest country in South-East Asia.”

    NONEBut what should be made clear is that safety and security is only one of the three broad themes which the GPI is concerned about – the other two being ‘the extent of domestic or international conflict’ and ‘the degree of militarisation’.

    This index is made up of 23 sub-indicators out of which only six have direct connection to crime and safety.

    These are: (i) level of perceived criminality in society, (ii) number of internal security officers and police per 100,000, (iii) number of homicides per 100,000, (iv) number of jailed population per 100,000, (v) ease of access to small weapons and light weapons, and (vi) level of violent crimes.

    All the other indicators have to do with military conflicts and military expenditure and political and civil violence. Out of the six sub-indicators which are linked to crime, only one – the number of jailed population per 100,000 – have improved since 2007.

    (We are jailing fewer people as a percentage of the population which doesn’t necessarily mean that crime has fallen. We may be less efficient in catching criminals and putting them behind bars).

    NONE

    The rest have remained the same. Where we have made improvements is by decreasing military expenditure as a percentage of GDP, the number of armed personnel per 100,000 and in our relations with our neighbours (below). All are laudable achievements but have nothing to do with the state of crime and safety in our country.

    NONE

    The GPI cannot be used as evidence that Malaysia has become ‘safer’ than Singapore under the GTP.

    Yes, Malaysia became more ‘peaceful’ than Singapore in 2010 according to this index. But this was driven largely by a significant increase in the number of military imports to and exports from Singapore, which obviously has nothing to do with crime and safety.

    In the latest 2012 GPI, Malaysia is ranked 20, three spots ahead of Singapore, which is at 23. It would a very brave (or ignorant) man to say that Malaysia is safer than Singapore from a crime and safety perspective.

    And in fact, this is not what the index is trying to say since crime and safety is less than one third of the total indicators. It is therefore misleading for to use this indicator in the GTP 2011 Annual Report as evidence that the NKRA on reducing crime has been successful.

    It is even more misleading for Najib to equate the Global Peace Index to safety and then make the leap to claim that Malaysia is the safest country in Southeast Asia.

    2) Positive Peace Index

    Sadly, the prime minister forgot to read the second part of the Global Peace Index (GPI) where details of a new index, the Positive Peace Index, were unveiled.

    According to the GPI report, “the Positive Peace Index (PPI) is a measure of the strength of the attitudes, institutions, and structures of 108 nations to determine their capacity to create and maintain a peaceful society.”

    It is important to note that the PPI is not a measure of crime and safety but rather, it describes ‘the optimum environment for peace to flourish’.

    The components of this index include the following domains: (i) well-functioning government, (ii) sound business environment, (iii) equitable distribution of resources, (iv) acceptance of the rights of others, (v) good relations with neighbours, (v) free flow of information, (vi) high levels of education, and (vii) low levels of corruption.

    According to the PPI, Malaysia is ranked at 47 out of 108 countries.

    More worryingly, Malaysia is flagged as one the top 10 countries with the largest positive peace deficit, which is the difference between a country’s GPI and PPI rank.

    NONE

    These countries with a high positive peace deficit are described as “relatively peaceful but theoretically lack the institutions to adequately deal with external shocks or move closer to peace”. These high deficits also “suggest that while these countries have relatively moderate levels of violence, they comparatively lack positive peace”, meaning that they are “vulnerable to external shock or violence”.

    In the Malaysian context, for example, this deficit, which points to shortcomings in the rule of law and respect for democratic rights and due process, may indicate a future rise in violence in the event that there is a transition in power at the federal level.

    3) World Justice Report’s Rule of Law Index 2011

    According to the GTP Annual Report 2011, “the World Justice Project (WJP)’s Rule of Law Index 2011 too has ranked Malaysia safest among 19 upper-middle income countries and 12th globally.

    “Malaysia’s 12th position out of 66 countries covered under the WJP’s assessment on ‘Order and Security’, has placed the country ahead of the United States (13th position), followed by Britain, Belgium and France.”

    But only one in three of the components of the ‘Order and Security’ factor have to do with crime and safety. The WJP assessment on the extent to which ‘Crime is effectively controlled’ is the most relevant component.

    ‘Civil conflict is effectively limited’ is an assessment of the extent of armed conflict and terrorism in the country, which Malaysia is thankfully free from but is also not directly related to crime and safety. A drug-infested area, for example, may have little civil conflict but would have a high crime rate.

    ‘People do not resort to violence to redress personal grievances’ is the third component of this factor and while we should be thankful that vigilante justice is not practiced in Malaysia, this is not a measure which directly touches on crime and safety. Malaysia’s ranking for these three components are 37, 1 and 6 respectively (out of 66 countries).

    NONEIn other words, Malaysia’s ranking of 12 out of 66 in this index is largely driven by the fact that we do not have any serious civil conflicts and that we do not practice mob or vigilante justice or revenge killing.

    For the one component which actually relates to crime directly, Malaysia did poorly, coming in at 37 out of 66, putting it at sixth position in South-East Asia – behind Singapore, Indonesia, Vietnam, Thailand and Cambodia.

    The GTP Annual Report also fails to highlight the fact that Malaysia was ranked 33 out of 66 on ‘Effective Criminal Justice’, the other crime and safety-related indicator in the WJP Rule of Law Index 2011.

    NONEWhile Malaysia’s ranking on some of the sub-components are commendable, e.g. 18th for ‘Crimes are effectively investigated’ and 14th for ‘Crimes are effectively and timely adjudicated’, its performance on other components which contribute to the overall crime and safety environment are quite appalling, for example, 49th for ‘The correctional system is effective in reducing criminal behaviour’ and 57th in ‘The criminal justice system is free of improper government influence’.

    4) World Economic Forum’s Global Competitive Report

    The GTP Annual Report 2011 says: “In the 2011 Global Competitiveness Report (GCR) conducted by the World Economic Forum in the sub-category of ‘Business Costs of Crime and Violence’, Malaysia’s ranking improved by 30 positions from 93rd in 2010 to 63rd place in 2011.”

    Malaysia’s ranking in the ‘Business Costs of Crime and Violence’ sub-category did improve by 30 places from 93 in 2010-2011 to 63 in 2011-2012. Indeed, Malaysia’s ranking on the ‘Organised Crime’ ranking also improved from a high of 83 in 2009/2010 to 54 in 2011-2012.

    NONEBut if these rankings are to be used as ‘external validation’ for the success of the ‘Reducing Crime’ NKRA, then an explanation also has to be provided as to why Malaysia’s ranking for the reliability of police services, at 39, although an improvement from the 50th ranking in 2010/2011, is still worse than the 2008-2009 ranking of 37.

    ‘Publicity first, deception now’

    It is frankly silly to erroneously quote indexes as ‘evidence’ that Malaysia is safe country from a crime and safety perspective, especially if the index in question – the Global Peace Index – only partly measures crime and safety.

    For indexes such as the World Justice Project’s Rule of Law 2011, an examination of the components of the ‘Order and Security’ factor shows that Malaysia does poorly in the only component which measures crime and safety.

    police crime roadblock frontimageEven for the Global Competitiveness Report sub-category rankings which measure crime and safety, one important measure – ‘the reliability of police services’ – actually shows a result that it is worse than the 2008-2009 figure.

    If street crime has dropped by 40 percent since 2009 as reported in the GTP 2011 Annual Report and if these results are genuine and can be sustained, the public would naturally feel safer and perhaps even have the confidence to terminate the services of the private security companies which patrol most of the middle-class neighborhoods in the Klang Valley.

    If it was truly ‘People First, Performance Now’ rather than ‘Publicity First, Deception Now’, the people will validate the results by voting with their feet by walking on the streets without being scared of snatch thieves and robbers.

    Indeed, there will be no need for ‘external validation’ to tell the people what they are already experiencing for themselves.


    ONG KIAN MING holds a PhD in Political Science from Duke University. His house was attacked by three thugs while he was doing research for this article. His account of the attack can be read here.

    This article was published by Malaysiakini.

  • Dissecting the ETP Annual Report (Part 5): The EPPs do not seem to be creating high-income jobs

    Capital intensity is very low in the ETP so far. An increasing level of capital investment per employee (CIPE) is an essential part of economic development. Higher CIPE usually translates into higher salaries due to the higher skills and productivity associated with working with more efficient machines and technology. Therefore, the ETP is expected to have high CIPE.

    PEMANDU is not doing much better than BAU. On the surface, the RM571,000 CIPE of the ETP projects last year is above the average RM554,000 achieved by the Malaysian Industrial Development Authority (MIDA) in the last five years of business-as-usual (BAU). However, the ETP total includes the MRT and RAPID mega-projects. Stripping these out, the CIPE of the remaining ETP projects is a mere RM305,000 — well below what MIDA has been achieving.

    Electrical & Electronics (E&E) EPPs seem low-end. PEMANDU may say the headline comparisons are unfair as the ETP includes projects that may not be as capital intensive as the manufacturing projects under MIDA’s purview. But then, even in the E&E sector, we find that the ETP projects brought in a mere RM429,000 CIPE last year. MIDA delivered more than that in four out of the previous five years, the 2009 crisis year excluded.

    The ETP will not transform the lives of ordinary Malaysians. Notice that PEMANDU’s communiqués focus on investment numbers and projects. There is hardly any mention of the types of jobs created. That could be because most of the jobs are low-skilled. The bottom 36 per cent of ETP jobs will pay just RM1,122 per month in today’s terms. And as we show in today’s focus paper, the low capital intensity of the ETP projects underlines the lack of real transformation.

    ● The ETP is not doing better than business-as-usual (BAU, as PEMANDU puts it) in attracting high-value investments.

    ● Excluding the MRT and RAPID mega-projects, capital intensity per employee in the ETP projects is a mere RM305,000.

    ● MIDA achieved a much better RM554,000 average capital intensity in the last five years!

    ● Rising capital intensity per employee is an essential part of economic development. In this regard, the ETP is certainly far from transformative.

    Previously, in our dissection of the 2011 Annual Report of the ETP:

    Part 1 (The “D”ata in our DEEDS framework) highlighted how PEMANDU very adroitly masks the fact that real national income growth last year was below its target;

    Part 2 (“E”xecution) unearthed the shocking case of PEMANDU lying and taking “100 per cent” credit in its Annual Report for a RM1.9 billion wafer fab plant that was never built;

    Part 3 (“E”nterprise) uncovered the startling gap between committed and actual investments. The RM12.9 billion of actual investments is a mere 7 per cent of the RM179 billion committed investments that PEMANDU prefers to emphasise;

    Part 4 (“D”iversity) revealed that PEMANDU’s “recalibration” of the ETP figures is better described as a massive collapse. The incremental GNI (Gross National Income) and job creation numbers were slashed by 45 per cent and nearly 20 per cent respectively. Were some EPPs selected based on grossly exaggerated forecasts?

    Socio-economic impact — the ETP is for the elites 

    This week, in our series critiquing PEMANDU and the Economic Transformation Program (ETP) 2011 Annual Report, we tackle the socio-economic impact of the ETP. We had earlier highlighted that:

    1. The ETP will take us further away from sustainable high-income status. Workers’ share of national income under the ETP will be just 21 per cent compared to 28 per cent currently. The share that goes to corporations will be 74 per cent, much higher than the current 67 per cent;

    2. The ETP will perpetuate income inequality. Of the small 21 per cent share of ETP national income going to workers, the top 15 per cent of wage earners will take 40 per cent of all wages. The bottom 36 per cent will have to make do with just 12 per cent of total wages;

    3. A significant number of ETP jobs pay poorly. The average wage of the bottom 36 per cent of ETP jobs is just RM1,122 per month in today’s terms.

    The ETP Roadmap Report was published in October 2010. Now, less than 18 months into this Roadmap that is supposed to take us to high-income nation status, PEMANDU slashed the job creation numbers by nearly 20 per cent in the ETP Annual Report but has not told us which jobs were lost and how this will affect the distribution of income under the ETP.

    Capital intensity is a measure of economic development

    In the absence of information from PEMANDU, we use capital intensity as an indicator of the types of jobs that the ETP created in 2011. An increasing level of capital investment per employee (CIPE) is part and parcel of the economic development process. Developed economies have a higher level of CIPE compared to less developed countries.

    Higher CIPE usually translates into higher salaries due to the higher levels of skills and productivity associated with working with more efficient machines and technology. For example, multinational enterprises in Japan tend to employ a higher amount of capital per worker and this is associated with higher productivity and wages. MIDA, the Malaysian Industrial Development Authority, has this to say in its 2011 report:

    The CIPE ratio of manufacturing projects has registered an increasing trend  … This reflects the general trend towards more capital-intensive, high value-added and high technology projects.

    Given the ETP’s promise of transformation, we would expect the capital investment per employee of its projects to be significantly higher than those of MIDA-approved projects which had been driving business-as-usual (BAU, as PEMANDU puts it) growth before PEMANDU came along.

    Overall investment per job in the ETP is abysmal

    The CIPE ratio is not the only measure of the kinds of jobs which will be created as a result of certain levels of capital investment. But it is an important measure, and on this metric, the latest data from the 2011 ETP Annual Report shows a dismayingly low level of capital intensity.

    The RM571,000 CIPE of the ETP projects is only slightly above the RM554,000 average achieved by MIDA in the last five years between 2006 and 2011. The amount of CIPE in the ETP does not seem to promise transformation or high-income jobs beyond what MIDA has achieved.

    The headline numbers actually flatter the ETP, because the ETP total is boosted by mega-projects. Just two mega-projects — the MRT and the RAPID project — comprised more than 50 per cent of the total committed investment of the ETP as at the end of 2011.

    Stripping these two mega-projects out, the capital investment per employee of the remaining EPPs is a minuscule RM305,000 — which is about half the RM554,000 CIPE that MIDA-approved projects averaged from 2006 to 2011!

    The Electrical & Electronic EPPs seem low-end

    Of course, PEMANDU may say that we are unfairly comparing rambutans to durians, as the nature of the ETP is such that it includes many projects that may not be capital intensive in the same way as the manufacturing projects that are under MIDA’s purview.  Let us then focus on the Electronics and Electrical (E&E) sector. The ETP projects under the E&E NKEA (National Key Economic Area) brought in a mere RM429,000 capital investment per employee in 2011. This pales in comparison to MIDA’s achievements. Excluding the 2009 crisis year, MIDA achieved a CIPE range of RM414,000-RM520,000 in the past five years. In fact, except for 2009, MIDA outstripped the ETP’s RM429,000 in four out of the past five years.

    Anecdotal evidence supports the view that some Entry Point Projects (EPPs) are far from transformative. For example, industry sources tell us that the LFoundry EPP planned to relocate old equipment from its plant in Germany to produce 200mm wafers in Malaysia. State-of-the-art wafer fabs such as in Singapore are already producing more technologically advanced 300mm wafers.

    The ETP will not transform the lives of ordinary Malaysians

    The very low capital investment per employee is one important indicator of the fatal flaw of the ETP — that it will not transform the lives of the vast majority of Malaysians.

    Notice that PEMANDU’s communiqués focus on investment numbers and projects. There is hardly any mention of the soft infrastructure necessary to take us to sustainable high-income status. For example, what skills and job types will be required in the 3.3 million jobs that the ETP promises to create? Accountants? Lawyers? Electrical engineers? Chemical engineers? Tour guides? Plumbers? Plantation workers? Doctors? Nurses? Technicians? Farmers?

    Information on the types of jobs that the ETP will create is crucial to other divisions of the government as well as ordinary Malaysians. For example, surely the Ministry of Education and Ministry of Labour would need to tailor their education and human resource policies to dovetail with the ETP. Malaysian youths and adults planning their own education and careers will also find such information very useful.

    PEMANDU’s silence on this matter could be because most of the jobs that the ETP promises to create are low-skilled. That the ETP consists of EPPs that are generally not transformative is not surprising as:

    Many of these EPPs are “recycled” projects using past or existing business models which are far from being game changers;

    These projects were selected in a lab environment where truly innovative ideas are unable to flourish.

    Instead of being transformative, the ETP is, at best, just a very slick repackaging of old ideas. These “recycled” projects cannot be expected to result in transformative change or high-income jobs.

    What should PEMANDU do?

    PEMANDU has shifted goal posts, set low targets and misrepresented data in order to present a rosy picture of how well the economy is doing. This is a disservice to all Malaysians, especially to the poorest and least educated who have been deluded into believing the government can drive the economy.

    Part 6 next week concludes with our recommendations.

    About DEEDS

    Earlier this year, we published a series assessing PEMANDU and the ETP on the goals, plans and targets stated in the ETP Roadmap document. To facilitate constructive discourse and 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 Critique of the ETP Series, together with related infographics and a powerpoint presentation can be found at www.refsa.org. — 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

  • Thugs at my doorstep

    At approx 4.45pm [yesterday] (July 10), three thugs, in their early to late twenties, tried to break into my house in Petaling Jaya.

    Thankfully, they were unsuccessful. Thankfully, I am not hurt. I am immensely grateful at the outpouring of support shown by my friends and family. I am thankful to the police for their quick response in sending three squad cars to my house five minutes after I reported the incident and their follow up on this case.

    Many are probably wondering why I think it was politically motivated rather than just a simple attempted break in. I cannot be 100 per cent sure that it was politically motivated but I’m quite sure of it. And here’s why:

    The thugs came in a car and they parked directly in front of my house, which is about 200m from the community guard house. It is a simple and spartan double story terrace house. It is not a flashy house. I drive a Toyota Vios.

    There are other houses along the same row with Mercedes-Benz and other nicer cars. Some of my neighbours were not at home. It would have been much easier to break into their homes instead of mine (not that I am recommending that they do this). Or a house that is more secluded. Or a house which seems to have more stuff to steal.

    My car was in the driveway. The thugs must have considered the possibility that someone was at home. They broke the automatic gates, which create a huge noise, rather than scaling over the gate, which would have been easy to do and much more discreet.

    I was in the living room when they broke the automatic gate. I got up immediately and shouted at them, screaming “Police! Police!” They didn’t even break their stride after I got up but kept on coming, which indicated to me that they knew I was at home.

    They proceeded to try and kick the door down while I kept on shouting. If it was an opportunistic break in, they would have left knowing that there was someone at home.

    They then left even though they could have kicked the door down. On the way out, one of them pointed his finger at me as if to give me a warning. He then used a screwdriver or some metal instrument to make a puncture in the bonnet of my car. If they had really wanted to break in even knowing that there was someone at home, they could have kicked the door down and easily overpowered me.

    They were in and out of the place in less than three minutes. Not long enough for the police to come and catch them but long enough to send a message.

    I don’t think it is a coincidence this happened a few days before a Bersih event in Malacca on Friday and three Bersih events in Kedah and Penang on Saturday and Sunday, at which I will be speaking. I don’t think it is a coincidence that Ambiga has been targeted as well as Wong Chin Huat.

    I am no Ambiga or Chin Huat but I have been publishing a series of highly damaging articles regarding the many problems in the electoral roll that I know that the Election Commission, National Registration Department and even some members of the Cabinet have read and are aware of.

    Initially, I said to a Malaysiakini reporter that I thought that this attempted break in could be due to my critique against MCA on the Talam issue, the Economic Transformation Programme (ETP) and other government policies.

    After giving it some thought, I think that it is much more likely that it was due to my Bersih-related activities given the record of how thugs have been deployed to harass and intimidate various people related to the Bersih movement.

    Regardless, I won’t allow this incident (if it was indeed an intimidation tactic) to cow me into fear or submission. I will continue to publish my findings on the problems with the electoral roll and share these findings with members of the public.

    I will continue to write my critiques as a contributor to Refsa on the Economic Transformation Programme (ETP). I will continue to write political commentaries. I will continue to play my own very small part in trying to make this country a better place.

    * Ong Kian Ming is an analyst for Research for Social Advancement (Refsa).

    This piece was also published at Dr. Ong’s Facebook page.

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