• How much did Pemandu Associates Sdn Bhd earn from organizing the Global Transformation Forum 2017?

    Media Statement by Dr. Ong Kian Ming, Member of Parliament for Serdang, on the 27th of March, 2017

    How much did Pemandu Associates Sdn Bhd earn from organizing the Global Transformation Forum 2017?

    Tony Robbins is a household name among those who follow management trends and self-help coaches. He has been a life coach to movie stars such as Hugh Jackman and world class athletes including Andre Agassi. For US$650, you can get nosebleed seats to a 3 day “Unleash the Power Within” Tony Robbins seminar in New York later this year. For US$2995, you can have a seat on the floor and access to the Premier Lounge.[1]

    If Tony Robbins were to come to Malaysia, the private company which has to pay his appearance fee would have to charge very high ticket fees in order to cover their costs and to make a decent profit. It would be hard to imagine this private company getting any funding from the Malaysian government to organize such an event. Perhaps some private corporations may be inclined to sponsor such an event so that some of their management can have special access to the man himself. But the risks and the rewards of organizing such an event would be in private hands, with little or no government involvement.

    Malaysia now has its equivalent of a Tony Robbins ‘make yourself feel good session’ in the form of the Global Transformation Forum (GTF). The first forum was held in 2015 and the headliners to this forum included Arnold ‘the Terminator’ Schwarzenegger and former Olympians Carl Lewis and Sebastian Coe. Fast forward to 2017 and this year’s headliners include businessman and philanthropist Richard Branson and 8-time Olympic champion Usain Bolt.[2]

    For GTF 2015, ticket prices started at RM427 for a university student and went up to a maximum of RM1424 for a regular delegate (Figure 1). For GTF 2017, ticket prices were jacked up to a starting price of RM4,000 and went up to a maximum of RM10,000 (Figure 2).

    If this were a purely private event organized by a private company, this Member of Parliament would have no beef with the ticket prices nor with the hosting of the event itself. But this is not a purely private event. Nor was it funded purely by ticket sales to individuals and the private sector.

    Figure 1: Ticket prices for the Global Transformation Forum 2015

    Figure 2: Ticket prices for the Global Transformation Forum 2017

    The first issue I have with this event is that it involves taxpayers’ funds. The first GTF in 2015 was organized with a government subsidy of RM10 million (Figure 3). Despite the higher ticket prices in 2017, the government subsidy was increased to RM15 million (Figure 4).

    Figure 3: Parliamentary Reply on the cost to the taxpayer for organizing GTF 2015

    Figure 4: Parliamentary Reply on the cost to the taxpayer for organizing GTF 2017

    Since this event is mostly accessible to those who are affluent, because of the high ticket prices, it does not make sense for the government to pour in millions of Ringgit to subsidize this event organized by the rich, for the rich and of the rich. It makes even less sense that the government subsidy increased by 50% from RM10 million in 2015 to RM15 million in 2017 when ticket prices in 2017 have been raised significant and there are no discounts for students and the less affluent.

    The second issue I have with this event is that the revenue for GTF 2017 goes directly to a private company. GTF 2015 was organized by BFR Institute, a company which is 100% owned by PEMANDU Corp, which is a company limited by guarantee under the control of the Ministry of Finance Incorporated.[3] GTF 2017 is organized by PEMANDU Associates Sdn Bhd which is a private company that is co-owned by its CEO and President Dato Seri Idris Jala (Figure 5).

    Figure 5: Ownership of PEMANDU Associates Sdn Bhd (downloaded from the Companies Commission of Malaysia / Suruhanjaya Syarikat Malaysia website on the 26th of March, 2017)

    Since the GTF is no longer organized by BFR Institute, which is a government owned and government controlled company, but by a private company, namely PEMANDU Associates Sdn Bhd, how much of the sponsorship of this event, including the RM15 million set aside by the Government of Malaysia, which is going into the pockets of this private company that is co-owned by Idris Jala?

    The third issue I have with the GTF is that a private company, PEMANDU Associates, is using this publicly subsidized event to increase its own public profile, perhaps in the hope of selling its consultancy services to the government, Government Linked Companies (GLCs) and other companies.

    PEMANDU Associates was set up on the 16th of December 2016 as part of the transition for PEMANDU Corp to hand over its responsibilities back to the civil service. According to PEMANDU’s website, “all staff in PEMANDU and BFR Institute will move to PEMANDU Associates Sdn Bhd, a private consultancy firm newly established by PEMANDU management and staff”. In addition, “under our agreement with the Government on 5th January 2017, PEMANDU Associates will be deploying 45 people to the National Transformation Program (NTP) work under the supervision of the Civil Service Delivery Unit in 2017. This number will reduce to 30 in 2018. The current employees not deployed to the NTP work will be doing business development work, as well as to provide consultancy services to public sectors abroad and business turnaround”.[4]

    In other words, PEMANDU Associates will be paid by the Government of Malaysia in 2017 and 2018 for its consultancy services. This means that PEMANDU Associates will have access to the inner workings of various government ministries and agencies. As far as I know, Idris Jala, who was appointed as the Chairman of Heineken Malaysia as of the 1st of January, 2017[5], has not officially resigned from his position as CEO of PEMANDU Corporation or as chairman of the BFR Institute. What assurance is there that PEMANDU Associates will not abuse its position and knowledge of the civil service in order to sell its consultancy services to other government departments or private companies who want to have access to the civil service? The fact that Idris Jala has not clarified his position and role as the CEO and President of PEMANDU Associates Sdn Bhd, the CEO of PEMANDU Corporation, the Chairman of BFR Institute and the Chairman of Heineken Malaysia does not give any public assurance that conflicts of interest arising from the holding of these various positions will not arise.

    Dr. Ong Kian Ming
    Member of Parliament for Serdang

    [1] https://www.tonyrobbins.com/events/unleash-the-power-within/new-york-area-07-20-2017/#pricing

    [2] One of Usain Bolt’s relay gold medals was recently taken away because of a positive drug test for one of the relay runners (not Bolt).

    [3] https://www.pemandu.gov.my/media-room-idris-jala-holds-no-shares-bfr/

    [4] https://www.pemandu.gov.my/pemandu-begins-transition/

    [5] http://www.thestar.com.my/business/business-news/2016/12/01/idris-jala-to-become-heineken-malaysia-chairman/

  • Why is the government of Malaysia spending RM15 million to subsidize an event for affluent Malaysians and big corporate organizations organized by a private company?

    Media Statement by Dr. Ong Kian Ming, MP for Serdang, on the 23rd of March, 2017

    Why is the government of Malaysia spending RM15 million to subsidize an event for affluent Malaysians and big corporate organizations organized by a private company?

    The Global Transformation Forum 2017, featuring internationally renowned speakers and celebrities such as Sir Richard Branson, Jack Ma and Usain Bolt, is currently taking place at the KL Convention Center from the 22nd to the 23rd of March, 2017.[1] It has a number of corporate sponsors including Tenaga, Hong Leong Bank, YTL, MMC Gamuda, KL Kepong and many others. The cost of entrance for this forum starts at RM4,000 for a basic package (“Club Pass”) and going up to RM10,000 for the most expensive package (“Signature Pass”). As of today, tickets for the Circle Pass (RM6,000) and the Signature Pass (RM10,000) has been sold out and only a limited number of Club Passes (“RM4,000) are left (See Figure 1 below).

    Figure 1: Cost and Benefits of the Club Pass, Circle Pass and Signature Pass packages for the Global Transformation Forum 2017

    If this was a purely private affair, organized by the private sector for the private sector, it would be no business of mine as a Member of Parliament (MP) to question the costs of organizing such an event. But a similar forum had previously been organized in 2015 at a cost of RM10 million to the taxpayer.

    In the parliamentary reply given to me today, the cost to the taxpayer for organizing this event has escalated to RM15 million! (See Appendix 1)

    When government funding to our universities and our hospitals are being cut left, right and center, and government subsidies for essentials such as sugar and cooking oil are being cut, why is the government subsidizing an event that will be almost exclusively attended by affluent and well-connected Malaysians? So that the Prime Minister will have more opportunities to take selfies with celebrities? This is a slap in the face of Malaysians who are suffering because of increases in the cost of living and cuts in government expenditure. The organizers of the event should be ashamed of themselves for asking the government for RM15 million to organize this forum for the rich, of the rich and by the rich.

    Dr. Ong Kian Ming
    Member of Parliament for Serdang

    [1] http://globaltransformation.com/

    Appendix 1: Answer to my Parliament Question of the Government Allocation for the Global Transformation Forum 2017

  • Sarawak Chief Minister Datuk Amar Abang Johari Tun Openg should show proof that the North Korean workers who were and are still in Sarawak are specialist workers

    Media Statement by Dr. Ong Kian Ming, MP for Serdang, on the 10th of March, 2017

    Sarawak Chief Minister Datuk Amar Abang Johari Tun Openg should show proof that the North Korean workers who were and are still in Sarawak are specialist workers

    On the 8th of March, 2017, Chief Minister of Sarawak, Datuk Amar Johari Tun Openg was reported to have said that the North Koreans who are working in Sarawak are “mostly specialist workers in coal mining, bridge and hydroelectric dam projects”. [1] I received a parliamentary reply on the 17th of June, 2015 to my question on the number of North Korean workers who was then working in Malaysia. The reply stated that all of the North Korean workers in Malaysia were working in the construction and mining industries (See Figure 1 below)

    Figure 1: Parliamentary Reply received on the 17th of June, 2015

    I visited the Selantik coal mine in the Sri Aman district on the 25th of September, 2015. I did not speak to the North Korean coal miners because of concerns of safety and the language barrier. I did see that the living conditions of these workers were very basic. I also saw a woman who looked Korean coming out from one of the run-down accommodations at the mine to wash some plates. My guess at that time was that she was a cook for the North Korean workers. (See Pictures below)

    I also asked the villagers living near the coal mine and they all said that they had very little interaction with the workers there. I find it hard to believe that ‘specialist’ coal miners from North Korea would be willing to live in such basic and inhospitable living conditions which I saw at the mine. There is also nothing from my parliamentary reply to indicate that these coal miners were ‘specialist’ workers.

    Chief Minister Amar Johari can convince the public that these were indeed specialist workers by releasing information about the background, qualifications and work experience of these specialist workers as well as proof that the company employing them had advertised for these positions and were unable to fill them with Sarawakian workers.

    At a time when relations between Malaysia and North Korea is at an all-time low and with the global media’s attention focused on Malaysia because of the recent assassination of Kim Jong Nam, it is imperative that we demonstrate to the global community that proper operating procedures were followed in the employment of the North Koreans in Sarawak. Failure to do so would put Malaysia in a negative light and may even cause the downgrade in Malaysia’s position in the US state department’s Trafficking in Persons (TiP) report.

    Dr. Ong Kian Ming
    Member of Parliament for Serdang

    Picture 1: Coal Mining operations in Selantik, Sri Aman in Sarawak

    Picture 2: One of the accommodation housing the North Korean workers in Selantik, Sri Aman in Sarawak

    Picture 3: One of the accommodation housing the North Korean workers in Selantik, Sri Aman in Sarawak

    Picture 4: One of the accommodation housing the North Korean workers in Selantik, Sri Aman in Sarawak

    Picture 5: A Korean looking woman coming out of one of the accommodation at the Selantik coal mine in Sri Aman to wash some dishes

    [1] http://www.thestar.com.my/news/nation/2017/03/08/north-koreans-in-no-rush-to-go-home/#4grlAk1YbeqsO6oV.99

  • Budget 2017: Reading Between the Lines

    Media Statement by Dr. Ong Kian Ming, MP for Serdang, on the 22nd of October 2016

    Budget 2017: Reading Between the Lines

    To the layman, the budget can be a very confusing thing. There are a slew of programs and expenditure items announced, many of which costs millions and some of which costs billions of Ringgit. Sometimes even the financially literate among us may be confused by the large number of items announced in the budget speech and also listed in the budget estimates (which is over 700 pages long).

    It is often necessary to dig deep into the budget in order to understand the financial and policy implications of some of these items. I call this ‘reading between the lines’ of the budget. To make this exercise easier to understand, I have divided these spending items into different categories. For each of the items listed below, I will also explain their impact on the target groups.

    Category 1: Existing expenditure items with very little change in allocation

    Given the size of the budget (RM261 billion for 2017), it is not surprising that there are thousands of expenditure items which are listed in the budget estimates document that accompanies the budget speech.

    But the majority of these items, even if the amount is big, they are usually items which were already in existence in previous budgets.

    For example, line 225 of the budget speech outlines a number of assistance programs to poor children in primary and secondary schools such as RM1.1 billion for the Hostel Meal Assistance Program and RM300 million for the 1Malaysia Supplementary Food Program for primary school students (Figure 1 below).

    The Budget Expenditure Estimates for the Minister of Education show that all of these are pre-existing programs and that the 2017 budget allocation is not significantly different from the 2016 allocation. The Hostel Meal Assistance Program’s budget has been reduced by RM15 million, the 1Malaysia Supplementary Food Program’s budget has been increased by RM50 million, the transport subsidy for students in hostels has been reduced by RM3.6m while the text book budget has been increased by RM25 million. The food subsidy and the per capita grant for pre-school remains at the 2016 level (Figure 2 below)

    Figure 1: Programs to reduce children’s schooling expenses

    Figure 2: Line Items in the Minister of Education’s Budget Expenditure Estimates (2016 & 2017)

    Category 2: Items which have experienced significant budget cuts

    The Prime Minister also announced an allocation of RM7.4b for the 20 public universities and RM1.4 billion for the 4 teaching hospitals. While this allocation may seem like very large figures, the budget expenditure estimates tell a very different story.

    The operating expenditure of the public universities have been reduced by more than RM1.4 billion from RM7.6 billion in 2016 and RM6.2 billion in 2017. At the same time, the budget allocation for the 3 teaching hospitals of PPUM, PPUKM and HUSM has been reduced by more than RM150 million from RM1.18 billion in 2016 to RM1.02 billion in 2017.

    The expenditure cuts to the public universities are just one of the many line items which have experienced significant allocation reductions. A more thorough analysis of the budget estimates will reveal more of such items. This clearly shows the underlying situation of a government under tremendous financial strain.

    Category 3: Allocations which are no longer in the budget

    While many people will pay attention to the items which are announced by the Prime Minister, perhaps as much care needs to be given to items which are NOT announced and have been taken off the budget entirely.

    For example, in the 2016 budget, a ‘one-off’ payment of RM593 million was allocated to compensate the toll concessionaires for deferred toll hikes under the Minister of Works. However, this item has totally disappeared from the 2017 budget!

    This can be seen in the significant drop in the fixed charges and payments expenditure from RM603m in 2016 to a mere RM385,000 in 2017. This means that there will almost certainly be more toll hikes including on the PLUS owned North South Highway in 2017, a contravention of BN’s GE2013 manifesto promise.

    Another item which has disappeared from the budget estimates is the cooking oil subsidy. The Cooking Oil Stabilisation Scheme (COSS) subsidy is under the Ministry of Commodities and Plantations but there is no such line item for this program in the 2017 budget. So contrary to the promise of the Second Finance Minister, Datuk Johari Abdul Ghani, there is no indication that this subsidy program will continue under the 2017 budget.[1]

    It is almost certain that there are other items which have been taken out of the budget entirely which will have a direct impact on the cost of living of voters.

    Category 4: New allocations which are ‘dubious’ in nature

    There was much speculation that our health care budget would be cut in the 2017 budget. I was pleasantly surprised when I saw that the operational expenditure for the Minister of Health was actually increased from RM21.4 billion in 2016 to RM 23.4 billion in 2017, an increase of RM2 billion.

    But when I examined the budget estimates for the Ministry of Health, I was shocked to find a special program called “Privatisation of Hospital Support Services” costing RM2.01 billion for 2017! As far as I know, the Ministry has not made any announcements on the privatisation of support services (much of which is sub-contracted out now anyways). And the Prime Minister did not make any mention of this new item in his budget speech. How can such a large expenditure item make its way into the budget without any further clarification? How many other such items will we find in the budget estimates?

    Category 5: Announced expenditure which are not in the 2017 budget

    Many of the big ticket expenditure items announced in the budget speech are actually not found in the budget estimates. For example, the proposed 600km East Coast Rail Line from Tumpat to Kuala Lumpur, which is estimated to cost RM55 billion, is not listed as an expenditure item. Just like the expenditure on the MRT Line 1 and the LRT Extension, these infrastructure projects will be funded by special purpose vehicles (SPVs) which will borrow money under their own balance sheet.

    The problem which such a model of financing is that it hides the true burden of expenditure on the government. Many of these projects will not be able to pay for the capital expenditure and the related interest expenses. Which means the government will eventually have to step in to service the debt of these SPVs. When that happens, the squeeze on the government will likely result in a steep increase in the GST rate in order to help the government ‘bail-out’ these SPVs.

    An initial reading between the lines of the 2017 Budget has already raised many questions regarding items which are present as well as those which are absent from the budget estimates. I am sure that other items will be discovered as more MPs analyse and investigate the details of the 2017 ‘stealth’ budget.

    Dr. Ong Kian Ming
    Ahli Parlimen Serdang

    [1] http://www.freemalaysiatoday.com/category/nation/2016/10/20/johari-subsidy-for-cooking-oil-will-continue/

  • GERAKAN should attend a basic Economics 101 course before it can lecture the Penang State Government

    Media Statement by Dr. Ong Kian Ming, MP for Serdang, on the 17th of October 2016

    GERAKAN should attend a basic Economics 101 course before it can lecture the Penang State Government

    I refer to the Star newspaper report “Ask Rahman Dahlan for help, Penang told”[1] and “Learn economics from Rahman Dahlan, GERAKAN tells Guan Eng”[2] from last week in reference to GERAKAN Secretary General, Liang Teck Meng’s press conference on the GDP per capita figures for Penang. In this press statement, he criticized the Penang state government for the low % growth rate in the state’s GDP per capita figures since 2007. He also suggested that Penang Chief Minister Lim Guan Eng should learn economics from the Minister in charge of the Economic Planning Unit (EPU), Rahman Dahlan. I want to make the following three points in response:

    1) GERAKAN Secretary General should learn how to use the correct figures and calculations

    The calculations in Figure 1 below was used by Liang in order to show that the % growth in GDP per capita for Penang from 2007 to 2015 was the lowest among all the states in the country.

    Figure 1: Liang’s calculations show the absolute and % increase in GDP per capita by state, 2007 to 2015

    I am not sure why Liang used the Department of Statistics (DOS) data from 2011 rather than the updated DOS data from 2014 which is shown in Figure 2 below. I want to highlight, in particular, the GDP per capita figures in 2007 for Terengganu and Sabah were 19,476 and 14,104 which is higher than the 17,284 and 13,067 figures used by Liang.

    Figure 2: GDP per capita by state, 2005 to 2013, Department of Statistics

    When the DOS statistics in Figure 2 were used, the state with the lowest % growth in GDP per capita from 2007 to 2015 was Terengganu (36.2%) followed by Sabah (40%) and not Penang (43%). Indeed, one wonders why Liang didn’t use the starting year at 2008 (rather than 2007) since this was when there was a change in the state government in Penang. If the GDP per state growth rate from 2008 to 2015 was used, then Sabah would be clearly at the bottom of the rankings at 13% followed by Sarawak at 19% and Terengganu at 26% with Penang coming in at 33%.

    2) GERAKAN should praise the Penang state government for leading the state out of a serious economic recession in 2008

    Liang also fails to acknowledge that one of the main reasons why GDP per capita in Penang did not grow, in percentage terms, as fast as some of the other states is due to the 2008 global financial crisis which hit Penang particularly hard. In 2009, Penang’s economy contracted by 10.5% as a result of the 2008 global financial crisis, of which the Penang state government had no control over. Penang’s economy was the worst hit out of all states because of Penang’s much higher exposure to global trade. The overall Malaysian economy only contracted by 1.5% in comparison (See Figure 2 below).

    The Penang State government had to work hard to recover from this serious crisis which it did with impressive results. From 2010 to 2015, Penang’s GDP growth rate was higher than the Malaysian growth rate in all years except for 2012 (See Table 1 below). Penang’s GDP growth rate was also higher than Sabah’s growth rate in all years from 2010 to 2014.

    Figure 3: GDP Growth Rate for Penang, Sabah and Malaysia, 2008 to 2015

    3) GERAKAN should ask Rahman Dahlan why Sabah’s GDP and GDP per capita growth figures rank among the lowest in the country

    The GDP per capita figures post 2008 global financial crisis tell a very different story. The GDP per capita growth rate for Penang from 2010 to 2015 was 33% or an absolute increase of RM11,250 from RM33,597 in 2010 to RM44,847 in 2015. Penang ranked 6th out of all states. In contrast, at the bottom of the pile was Sabah with an absolute increase in GDP per capita of only 11%, from 17,831 in 2010 to 19,734 in 2015. (See Table 2 below)

    At the same time, Penang’s GDP per capita was the 3rd highest in the country in 2015 – after WP Kuala Lumpur at RM94,722 and WP Luan at 58,577 – while Sabah was third from the bottom after Kelantan at RM12,075 and Kedah at RM18,249.

    Rather than asking Lim Guan Eng to take economics lessons from Rahman Dahlan, Liang should ask Rahman Dahlan to explain why the GDP and GDP per capita growth figures for his home state of Sabah ranks at the bottom or near the bottom of the pile.

    It is sad to see GERAKAN, which used to pride itself as being an ‘intelligent’ party, use bad statistics and poor economics to criticize the Penang State government on its economic performance when the facts on paper and the situation on the ground tell a completely different story. If the people in Penang were not satisfied with the performance of the state government, they would not have given the Pakatan state government an overwhelming level of support (67%) during the 2013 general elections.

    I suggest that Liang attend a basic Economics 101 lesson before he issues any further statements on economic issues. I would be happy to give him and his GERAKAN leaders a free lesson.

    Dr. Ong Kian Ming
    Member of Parliament for Serdang

    [1] http://www.thestar.com.my/news/nation/2016/10/13/ask-rahman-dahlan-for-help-penang-told/

    [2] https://www.malaysiakini.com/news/358895

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