• Open data and policy-making in Malaysia

    (This article can also be read at the Penang Institute in KL Column in the Malaysian Insight, 26th June 2017)

    EARLIER this month, at the launch of the June issue of the World Bank’s Malaysian Economic Monitor, country director for Southeast Asia Ulrich Zachau called for more data to be disclosed to be used for better policy-making. He gave the example of how GRAB, an e-hailing service provider, was sharing its data with the government in order to find ways to better manage traffic flows.

    With the advent of big data coupled with behavioural economics, “nudge” units have been set up by governments around the world with the specific aim of using policy incentives to change behaviour and using data drive approaches to analyse the effectiveness of these policies. Cass Sunstein, co-author of the best-selling book “Nudge” was recruited by President Obama to run a nudge unit under his administration and is probably the best-known advocate of this policy approach.

    While “Big data” is often used as a buzzword by policy makers and politicians, many do not know what big data is and how it can be utilised. In fact, many of these policy makers don’t realise that the data ecosystem in Malaysia, especially when it comes to data analytics, is very under-developed.

    While the various government agencies do collect a lot of data and information, not all of it is published. A study by the World Bank shows Malaysia underperforming in relation to its GDP when it comes to our open data ranking. The same World Bank study also shows a correlation between a country’s open data score and its publication and citation ratios. The higher the open data score, the higher the number of academic publications (See Figure 4 below).

    This corresponds to the experience which many academics in Malaysia have in terms of accessing data especially at the more granular level. For example, even though the Department of Statistics (DOS) has individual level data in its Household and Income Surveys, it does not release this information to the public so that academics can study the figures in more detail and publish their findings. Concerns about the privacy of individual level data being released can be easily overcome by anonymising the data.

    Even in cases where some of this data can be released to the public, it is often costly to purchase. In contrast, the individualised data for the decennial census in the US is released publicly and is a very useful tool for social scientists to use in their academic writings and analysis.

    There have been some recent steps to improve the data ecosystem in Malaysia. The Malaysia Digital Economy Corporation (MDEC) is on the vanguard in pushing for the use of big data especially in the private sector. The Malaysian Administrative Modernisation and Management Planning Unit (MAMPU) is spearheading an initiative to consolidate the publication of government data in one location (www.data.gov.my). At the recent World Bank Event, the Minister in charge of the Economic Planning Unit (EPU), Rahman Dahlan, has called for the collection of data at a more refined and localised level including by parliamentary district.

    The Penang state government is doing its part by releasing detailed information at the state level in the data.gov.my including a list of all 201 nasi kandar outlets in the state! The Penang GIS center (PEGIS) was also established to make GIS and mapping more accessible to users including businesses who want to ‘tag’ their location on PEGIS maps and cycling enthusiasts who want to ‘tag’ their favourite cycling trails.

    In addition to data accessibility, Malaysia is also behind the curve in terms of knowledge workers who can adequately understand and analyse big data. Analysis by the World Bank shows that only 13.4% of the statistical workforce is at the ‘managerial’ level in Malaysia compared to 67.5% in advanced economies (See graph below).

    To build a more conducive data ecosystem, one not only needs more data but also more people who can put the data to good use and to make better policies. For example, a team of data scientists, academics and social workers can work together to evaluate the effectiveness of BR1M payments over the past five years and to see how it can be improved. The local government can make use of information provided by WAZE so that it can repair potholes in a more timely manner.

    So the next time a politician or policy-maker talks about big data, ask him or her how this data can be analysed and used to improve public policies. – June 26, 2017.

    * Dr Ong Kian Ming is the Member of Parliament for Serdang, Selangor and is also the General Manager of Penang Institute in Kuala Lumpur. He holds a PhD in Political Science from Duke University, an MPhil in Economics from the University of Cambridge and a BSc in Economics from the London School of Economics.

  • Visit to Paris, France under the PIPA program by Dr. Ong Kian Ming, MP for Serdang, from the 29th of June to the 4th of July, 2015

    Visit to Paris, France under the PIPA program by Dr. Ong Kian Ming, MP for Serdang, from the 29th of June to the 4th of July, 2015

    I was invited by the French embassy in Kuala Lumpur to take part in an Invitation Program for Future Leaders (Programme d’invitation des personnalités d’avenir) from the 29th of June to the 4th of July, 2015. The following is a report of some of the key takeaway points from my program. I have omitted the names of the individuals I had official meetings with, but have included the institutions to which they are attached to. These takeaway points are the main lessons which left an impression with me, as a result of my visit.

    Key takeaway points

    1) Institutional reform in the National Assembly and the Senate

    In my visits to the National Assembly (lower house) and the Senate and in my discussions with various individuals, I found that that there has been significant reforms in the legislative process on July 23, 2008. These reforms were part of a larger constitutional reform, the most significant since it was drawn up in 1958[1]. These legislative reforms include:

    • Allowing parliament to set the legislative agenda for half the time when parliament is sitting, rather than allowing only the executive to set the entire agenda
    • The recognition in the Constitution of political groups comprising of individual MPs, which can introduce and amend legislative bills
    • The recognition of the rights for the opposition and minority groups including the setting aside of one day during each sitting to propose legislative agenda, holding the chairmanship of the Finance Committee and the ad-hoc committee in charge of checking, and auditing the accounts of the National Assembly and the right to request for a Commission of Inquiry during a sitting, just to name a few.[2]

    The effect of these legislative changes was to empower parliament, parliamentary committees and opposition groups in parliament, so that it can play a more effective check and balance role on the executive. There are many legislative reforms from the 2008 constitutional amendment which can be examined by the Malaysian parliament, especially now that the speaker of the Dewan Rakyat in Malaysia has announced his intention to introduce significant legislative reforms in the near future.[3]

    2) The relationship between the legislative process and the EU

    There is a special parliamentary group overseeing European Affairs which has to examine the impact of EU legislation on French laws. The briefing I was given by one of the ‘clerks’, who is one of the civil servants who provides the relevant information regarding EU legislation to French MPs, was very helpful in giving me a general idea on how the relationship between the EU and the French legislature is managed. The team of research ‘clerks’ would categorize various EU laws according to their level of importance and priority, so that the MPs could focus only on the most important laws. Of course, some MPs would sometimes question the prioritization choices but on the whole, it seemed to me that the experience of the research ‘clerks’ allow them to accurately categorize most of the EU legislation. There would be a natural gravitation of certain lawmakers towards certain topics and because of the relationship between the research ‘clerks’ and members of the European Affairs committee, the ‘clerks’ would often know which EU law to highlight to which legislators.

    This briefing also highlighted to me the importance of the research ‘clerks’ in analysing and filtering the relevant EU legislation for presentation to the MPs.

    3) The lack of awareness and knowledge among MPs on Malaysia and South-East Asia

    I met an MP from the National Assembly or the lower house who was listed as the head of the France-Malaysia parliamentary friendship group. She was very friendly and provided a useful picture on the semi-urban constituency she represented and the challenges her voters faced, including having to face global competition and industrial hollowing out. But she told me that she had stepped down as the head of the France-Malaysia friendship group because she felt that the position ‘deserved someone better’. She had not been to Malaysia and the only reason why she was still listed as being the head of this group was because no one had replaced her.

    I also met two other MPs from the Senate who are part of the France – South East Asia inter-parliamentary group. One of the Senators had recently visited Malaysia and the other had not. Again, they did not display much knowledge or interest on Malaysian related issues.

    It is not surprising that the level of knowledge and interest in Malaysia among French MPs is low, since Malaysia is a small country and was not a former French colony. Perhaps, the Malaysian embassy in Paris needs to do more to promote French-Malaysia ties among the relevant French MPs in the National Assembly and in the Senate.

    4) Changes in Regional and Local Autonomy

    Through my conversations with various politicians and other individuals, I got the impression that the regional as well as local (at the department level) governments have significant autonomy over policy, as well as budgetary issues including infrastructure spending and education.

    There is obviously some inequality between government spending in the more affluent versus the less affluent areas. For example, a municipal councillor in Saint Denis, a municipality just outside Paris with a large immigrant population, complained that the spending on education and policing is much lower than in central Paris.

    I also found out that the 22 regional governments are in the process of being reorganized in 14 regions.[4] The rationale behind this was the reduce bureaucracy and red tape and save money in administrative expenditure.[5] Not surprisingly, these reforms have received their fair share of criticisms and are unpopular in certain regions, because of the prospect of losing the status of regional capitals and identities.[6] At the same time 10 new city regions will have public services created and spending redistributed.[7] For example, the above mentioned Saint-Denis will be included as part of the Grand Paris super-metropole, which hopefully will decrease some of the imbalances in public services that currently exist in the larger Paris metropolitan area.

    5) The influence of think tanks and their relationship with the government and political parties

    I had the opportunity to meet with academics and representatives from various think tanks and research units in universities. I found that there is a close relationship between academics in these organizations and policy makers in the government. Not surprisingly, this arrangement has its pros and cons. On the one hand, it can be very useful for academics with good ideas and policy proposals to be able to channel these ideas to policy makers in the government, so that they can be considered for implementation. For example, one academic I met had a very fascinating proposal to allow the private banks to buy up credits for green investment schemes which would be guaranteed directly by central banks and possibly the European Central Bank (ECB). This proposal was a win-win in that it allows for investment and avoids the liquidity trap and at the same time, helps the government meet its goals for reducing carbon emissions and promote environmental sustainability. The academic was attached to the Center d’Etudes Prospectives et d’Informations Internationales (CEPII)[8] and he was working closely with France Strategie[9], a policy think tank under the Prime Minister’s Office. The proposal can be read here[10] and France Strategie is advocating this proposal through seminars like this.[11]

    On the other hand, the close relationship between the government and think tanks may restrict research projects, especially those which may harm the relationship between the French government and other countries.

    Unlike the German system where each major party has their own think tanks which are publicly funded as a result of their links to the respective parties, not all French parties have their own think tanks. The Jean Jaures Foundation is the one which is most closely associated with a political party – the Socialist Party. It receives most of its rather limited funding from the state and some from private sources, but none from the party so that it can maintain its independence.[12] The Jean Jaures Foundation has some policy influence through its ties with MPs via the party. It also does public advocacy on issues such as climate change and international cooperation, mostly in the former French colonies.

    Of course, international organizations which are based in Paris such as UNESCO and the OECD are independent bodies of which France is only one member country among many. I found my meeting with OECD representatives especially interesting from the point of view that it is a think tank which does extensive and internationally acknowledged research on a number of topics such as education, investment and trade, but who is also answerable to a council made up of representatives of all the OECD member countries which may have slightly different views in regards to the objectives of the OECD. The OECD has recently increased its interactions with South East Asia governments, including the setting up of a small office in Jakarta. It seems likely the level of interaction will only grow over time, perhaps with the admission of its first South East Asian member country.

    6) The economics of the EU, Greece and the Euro

    I expressed my interest in learning more about EU economic policy especially in regards to the Eurozone and to Greece to the French embassy in KL prior to my departure. Little did I know that the “Grexit” issue would take such great prominence during my visit to Paris. In my discussion with different economists, I found the following points of agreement with some individual nuances:

    • That Greece needs to have some or all of its debt forgiven by the European countries if it is to have any chance to get out of its current economic predicament. The nuances would involve the process by which the debt is forgiven / written off and the conditions attached to this. Some economists think that that the Germans are overly rigid in its rules based approach towards its negotiations with Greece.
    • That it would probably be better for Greece to exit the Eurozone and default on its debt obligations if it cannot find a way to reduce the overall debt burden.
    • That the Greek economy is very uncompetitive and tremendously reliant on tourism and to a lesser extent, olive oil. There was a consistent level of disdain towards the Greek economy and a general feeling that the current situation which Greece finds itself in was created by bad government policies and corrupt and compromised governments.

    7) Minorities in France, especially Muslims

    One of the biggest challenges facing the French nation is the issue of how to ‘manage’ or deal with minority groups, including Jews and the Romas but especially the large and growing Arab / Muslim population (Not all Arabs in France are Muslims but a majority of them are).

    France has been and continues to experience a large emigration of its Jewish population to Israel, possibly as a result of high profile terrorist attacks against the community.[13] This predates the attacks on the Charlie Hebdo office in January of this year. This trend continues despite the attempts of the French government to protect the Jewish community from further attacks. I was told that Jewish synagogues and schools are constantly under surveillance by the French security services for their protection. A personal story which was related to me by Jewish activist working against Anti-Semitism was his experience of going to his synagogue and finding three French soldiers sleeping in there because they were taking a break from their duties. He found this comforting as well as disconcerting, because he felt that he should not be living in a country where synagogues needed such a level of protection.

    I also found out that France has a small but significant population of Romas (or the Romani people) – as many as 500,000 – many of whom are fully integrated into French society. I had not realized this before, since my impression of the Romas were that they were nomadic peoples and mostly found in big cities in Europe seeking out a living as scrapers and pickpockets – but there are actually different groups of Romas with origins from Germany, Italy and Spain.[14] The Romas who are nomadic only number 20,000 but they have received a lot of publicity over the past two years because of their clashes with the French government.[15]

    The Roma activist whom I met who is from Albania (and not a French citizen) had many interesting viewpoints on how to advocate for the rights of the community. For example, he said that activists for minority groups in France should not adopt a victimhood mentality and also minimize dialogues which he found to be ineffective. He preferred action over dialogue and viewed the admission of past guilt by the French authorities with slight disdain, as this would give an excuse to the authorities to say that they have done enough for minority groups while ignoring current transgresses. When I asked him if he would support a move by the French government to establish a Holocaust-like museum for the Romas who were exterminated during the Second World War, he replied that he was lukewarm towards the idea. One take away point from this conversation is not to refer to Romas as gypsies, as this was considered as a pejorative.

    The biggest challenge for the French authorities continues to be how to deal with the Arab and especially the Arab-Muslim population. The French concept of the state as being secular and being encapsulated in the concept of Laïcité is currently being challenged most strongly by the Muslim community over issues such as the wearing of the Muslim headscarf or hijab in public, the eating of halal food in public schools and praying on the streets during Friday prayers, just to name a few. The fact that many Arab-Muslims live in economically backward and dilapidated suburbs or ‘banlieues’ on the fringes of major French cities only further complicates the challenge of ‘managing’ this community.[16] The disturbing development of many young French men (and some women) joining the IS (or ‘daesh’[17] as it is called in France) also further complicates the dealings of the French state with its Muslim population.

    The French authorities do not want to be criticized for either privileging the Muslim community nor do they want to be seen as targeting the Muslim community. The Muslim community feels marginalized since they feel that there is a larger phenomenon of Islamaphobia which exists in society and in institutions, which is made worse by the fact that the government does not admit to the existence of such a phenomenon. The Muslims can’t help but feel that some laws have been enacted to target them using the concept of laicite as a smokescreen, such as the banning of the display of religious symbols in schools and the prohibition against wearing the face veil in public.[18] From my discussions with various individuals including a representative from the Collectif Contre L’Islamophobie En France (CCIF)[19], it is very likely that the tensions between the state and the Muslim community will continue to simmer.

    It is also likely that the Muslim community will form more Muslim NGOs in order to mobilize support for its causes, such as battling Islamaphobia and other community advocacy initiatives. CCIF, for example, collects and then investigates reports of discriminatory attacks and actions against Muslim individuals[20] and then publishes the results of their investigations.[21]

    The French authorities do seem to be acknowledging the need to do more outreach to the Muslim community, including having regular dialogues between the Minister of the Interior and representatives from the Muslim community including those who are not from the officially recognized French Muslim Council[22] which has a legitimacy problem in the eyes of some French Muslims. The Ministry of Foreign Affairs also has a special ambassador who is in charge of dealing with religious affairs, which includes issues within and outside France which have a religious dimension to them. In my conservation with the ambassador, he acknowledges that the Muslim world, especially near to France in the Middle East and Northern Africa are his key priorities for now.

    One particularly interesting conversation I had was with a municipal councilor in Saint Denis, who is in charge of anti-discrimination policy. He is a French-born Muslim with parents or grandparents from North Africa who is a strong supporter of Palestine. He represents the Left Front[23] who sits on the left of the Socialists. At the same time, he is also a strong supporter of the LGBT movement. In his opinion, Muslims in France should not support policies which discriminate against any group including LGBTs, even though they may not agree with their lifestyle choices. He noted that even though some Muslim groups had initially joined anti-LGBT protests by far right groups, most Muslims groups would refrain from joining such protests in the future.

    8) Urban regeneration

    I specially asked to visit the Stade-de-France which is located in Saint Denis, to see if the development of the stadium in an economically depressed area just outside Paris had brought about long-term development and urban regeneration 17 years after the staging of the 1998 World Cup.

    What I saw was indeed encouraging. The upgrading of the Canal Saint-Denis, in conjunction with the development of the Stade-De-France, which has become a tourist attraction and used by many for recreational purposes, is arguably one of success stories of urban regeneration.[24] There is a public cycling / jogging path of 6.6km on both sides of the canal which leads all the way up to the famous Saint Denis Basilica[25], located in the heart of Saint Denis town, that was the burial place for the Kings and Queens of France. When I visited the Basilica, it was being prepped for the Saint Denis Festival featuring a symphony orchestra.[26] The festival predates the World Cup – it started in 1970 – but I can’t help feel that some of the positive ‘vibes’ surrounding the Stade-de-France had also filtered into the town of Saint Denis. While there are still some pockets of poverty around the town area, I could see a very diverse crowd in the town center which had a street market, busy restaurants and small shops.

    As a result of the construction of Stade-de-France, a large highway from Saint Denis to Paris called A1 was converted and this added new and valuable real estate to the area. Much of this was converted into public parks and many neighbourhoods which were previously separated by the A1 highway were reunited, with positive results.

    On the whole, one would say that the building of the Stade-De-France has been a success story in terms of urban regeneration for the Saint Denis area.[27]

    9) Paris COP 21

    There was great awareness of the Paris COP 21 summit on climate change, which will be taking place in November and early December this year. There were also many signboards and public advertisements promoting Paris COP 21.

    Unfortunately, because I had not indicated my interest in environmental issues, I was not able to arrange for specific meetings with the relevant experts to discuss the details of Paris COP 21.

    10) The experience of Paris

    Finally, one cannot go to Paris without experiencing the sights and sounds of Paris. I had the pleasure of running along the Seine on the Left and Right Bank and seeing the many famous landmarks in the heart of Paris. I also managed to visit the Picasso museum which had been recently renovated. I had dinner and drinks with a Singaporean academic who was also on the PIPA program. I met up with a Malaysian friend for dinner and she introduced me to other academics who are interested in Malaysian / South East Asian issues. I had dinner with a French academic whom I knew from her research visits to Malaysia, and her husband was kind enough to give me a ride back to my hotel in his scooter. So I can say that I saw Paris in a car, on foot, on a train and on a scooter. Sadly, I didn’t manage to rent a bicycle to cycle through Paris because of the unseasonable heat wave that hit Paris during my visit. The accessibility of Paris as a city really struck me as a visitor.

    I even managed to squeeze in some time to buy some Belgian chocolates from my friends and family back home.

    Finally, my visit would not have been so memorable without the assistance of three people – Marie-Pierre Levert, the person at the Ministry of Foreign Affairs in charge of my program, John Ritchie, my interpreter and chaperone, and my driver, Patrick Gagnaut.

    It was a fantastic learning experience and one which I will not forget for a long time to come.

    Dr. Ong Kian Ming
    Member of Parliament for Serdang

    Some pictures from my visit

    Running along the Seine and around the Louvre in the morning

    With two Senators at the Senate building, Jardin du Luxembourg

    Bicycles for public rental

    With activists fighting for minority rights

    With Paul, my driver, and John, my interpreter, at Stade-de-France

    From the Picasso Museum

    [1] https://en.wikipedia.org/wiki/French_constitutional_law_of_23_July_2008

    [2] These changes can be found in the document entitled: “The National Assembly in the French Institutions”. The pdf file in English can be found here: http://www.assemblee-nationale.fr/connaissance/fiches_synthese/septembre2012/national-assembly.pdf. The latest version has been updated to November 2014.

    [3] http://www.themalaymailonline.com/malaysia/article/pandikar-starts-parliament-reforms

    [4] https://en.wikipedia.org/wiki/Regions_of_France

    [5] http://www.theguardian.com/world/2014/jun/03/france-redraws-boundaries-map-revolution-francois-hollande

    [6] http://www.economist.com/news/europe/21650564-redrawing-regional-boundaries-causing-big-rows-and-will-save-little-new-kids-block

    [7] http://www.citymetric.com/politics/france-just-created-10-new-city-regions-over-night-615

    [8] http://www.cepii.fr/cepii/en/welcome.asp

    [9] http://www.strategie.gouv.fr/

    [10] http://blog.en.strategie.gouv.fr/2015/02/policy-brief-proposal-finance-low-carbon-investment-europe/

    [11] http://www.strategie.gouv.fr/evenements/transitions-bas-carbone-role-institutions-financieres-internationales-banques-centrales

    [12] http://www.jean-jaures.org/

    [13] http://www.theguardian.com/news/datablog/2015/feb/05/is-there-really-a-jewish-exodus-from-western-europe

    [14] https://en.wikipedia.org/wiki/Romani_people_in_France

    [15] http://www.bbc.com/news/magazine-25419423

    [16] Of course, there are various communities within the larger Arab-Muslim community with those from Tunisia and Algeria being the largest.

    [17] http://theweek.com/speedreads/446139/france-says-name-isis-offensive-call-daesh-instead

    [18] http://www.nytimes.com/2013/12/03/opinion/french-secularism-on-trial.html?_r=0

    [19] http://www.islamophobie.net/

    [20] http://www.islamophobie.net/contact

    [21] http://www.islamophobie.net/sites/default/files/CCIF-Annual-Report-2015.pdf

    [22] http://uk.reuters.com/article/2015/02/25/uk-france-islam-dialogue-idUKKBN0LT1OB20150225

    [23] https://en.wikipedia.org/wiki/Left_Front_(France)

    [24] http://uk.tourisme93.com/canal-saint-denis.html

    [25] https://en.wikipedia.org/wiki/Basilica_of_St_Denis

    [26] http://www.france-voyage.com/events/saint-denis-festival-31.htm and http://www.festival-saint-denis.com/

    [27] http://unhabitat.org/wp-content/uploads/2010/07/GRHS2009CaseStudyChapter08Paris.pdf

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

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

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

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

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

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

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

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

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

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

    Dr. Ong Kian Ming
    Member of Parliament for Serdang

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

  • Wish list for the 11th Malaysia Plan

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

    Wish list for the 11th Malaysia Plan

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

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

    1)      Wish One: A new definition of poverty

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

    Dr. Ong Kian Ming
    Member of Parliament for Serdang

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

    [2] According to the 2012 Household Income Survey

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

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

    [5] http://mhdr.my/

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

  • SEDA has only managed to commission 56% of the quota distributed in 2012 and 2013 but yet it has asked for the contribution to the Renewable Energy (RE) Fund to be increased from 1% to 1.6% starting in 2014

    Media Statement by Dr. Ong Kian Ming, MP for Serdang, on the 21st of April, 2014

    SEDA has only managed to commission 56% of the quota distributed in 2012 and 2013 but yet it has asked for the contribution to the Renewable Energy (RE) Fund to be increased from 1% to 1.6% starting in 2014

    According to the Sustainable Energy Development Authority 2012 Annual Report, the total approved capacity under the FiT scheme was 183.41MW in 2012 and 144.18MW for 2013 giving a total of 327.59MW for the years 2012 and 2013. (See “Exhibit 4” below)

    Unfortunately, as of the 17th of April, 2014, only 100.71MW was installed for 2012 and 83.41MW was installed for 2013 giving a total of 184.12MW for 2012 and 2013.[1] (See “Operational Plants” below)

    This means that only 56% (184MW out of 328MW) of the quota for 2012 and 2013 has been successfully installed.

    SEDA’s Annual Report 2012 shows that the current assets of SEDA has increased from RM330 million in 2011 to RM561 million, an increase of RM231 million or a 70% increase. If SEDA cannot show that it can achieve installation of its distributed quota from 2012 and 2013, how can it justify asking for consumers to pay more by increasing the contribution to the Renewable Energy (RE) Fund from 1% to 1.6% for usage above 300kWh per month?

    The increase in the RE fund in 2014 surcharge will only add to the cash reserves of SEDA without increasing SEDA’s ability to achieve its installation targets. Thus far, the results for 2014 have not been very positive. As of today, only 0.27MW of RE energy under the FiT scheme has been installed according to SEDA’s website. This represents a pitiful 0.3% of the 101MW allocated under the 2014 quota thus far.

    SEDA needs to explain its poor performance and justify why consumers need to contribute more to the RE fund in 2014 and beyond in light of this poor performance.

    Dr. Ong Kian Ming
    Member of Parliament for Serdang