End of Badawi-ism

Special thanks to the 5th Prime Minster of Malaysia, Abdullah Ahmad Badawi for providing the avenue to the rakyat to have an open and independent sight of the word democracy. His failure at administrating/governing the nation has facilitated the ongrowing growth of awareness in relation to human rights and proper disclosure of government facts. It may be harsh, however to root out the rotten apples should be done swiftly to avoid a plague from getting out of control. Nevertheless, an antitode for one man, may be a posion for another.

"Employees are their best asset". Sure anot?

The Chinese New Year celebration is coming to an end. To be precise it's exactly after the fifteenth (15) day, where the thread withholding the world's economy lies hanging, snap or no snap is depending on the magnitude of the consumers' reaction overall since the sub-prime mortgage crisis that mushroomed crisis everywhere across the globe. China's demand for products would shrink further into the abysmally at higher pace as the biggest celebration for them comes to an end. Unfortunately, ill news begins to spread even before the Chinese New Year celebration ended, companies laying off thousands of their employees, and we're talking about huge companies, such as Caterpillar Inc (22, 110 jobs) , Macy Inc (7000 jobs that were equivalent to 4% of their workforce) , etc. It was a massive execution of working employee, literally speaking. In fact is this how these companies treat their employees after admitting that "employees are their best asset"? Short-term solution for the long-term effects to curb expenses in a "cash is king" competitive business environment. True, but only for the current particular moment. Decisions are valid and only looked right at the moment it was decided and not after it. The war on Iraq, decision by former US President, George W. Bush was right only at that moment he signed the declaration of war against terrorism. It was essential to protect the sovereignty of the United States at that time, but unfortunately the war dragged for too long and that was the mistake of the war people identified and criticised. It would be the very same situation that we would be facing in the foreseeable future. Employees are trained to function the way they are, specifically looking at the front line employees (i.e. welders, factory workers, salesman, etc.). It took years to train this people up and laying off them would come a price. If the company is lucky, the dismissed employees could be relocated again and rehired but what are the chances of rehiring them if the period of retrenchment are undefined in this trouble economic conditions. As I say short-term positive solution for a long-term negative effect. Considering that we have not take into account on the social cost it would bring. The Malaysia economic growth is mainly spurred by the manufacturing industry for electrical and electronic products that are also run by a high percentage of foreign workers. Unfortunately the US consumer are our biggest, in fact the world biggest consumer, and further worsen by their slashing on product consumption in light of their sub-prime mortgage crisis which generated massive foreclosure continuing to trigger a lower demand for our electrical and electronic products. You definitely can't expect them to continue supporting our economy when their domestic economy is facing extinction. This ultimately manifest into a halt in production due to overbuilding figures of inventories held in the producers accounts. Nothing goes out, therefore nothing is build in. With no production, employees are not hooked up with their jobs, and employers are facing a hard time to pay their salaries due to the severe amount of incoming revenues resulted from the drop of sales and also deferred payment by debtors. Employers are forced into either liquidation/ receivership or retrench their employees to save cash for the future since no production is on at the moment. And that was how it begins. The next part of the cycle would be social cost (i.e. thieving). Most companies do not self-hire workers into their comradeship. They would prefer to sub-contract out to other contractors that hire workers. In these way, it would be easier for them to control their accounts because requirements such as EPF, SOCSO and Income Tax would not be a hassle for them. So the company would not need to retrench workers and pay for compensation as required by our Malaysian Employment Law, for they need only to terminate the contract. But it would be another question whether the contractors would search for other clients to employ their workers or return them, foreign workers to their homeland (i.e. Indonesia) or worse leave them here. The third choice would be a jeopardy to us because this is where social cost would rise. Our federal government purpose is to safe guard the well being of domestic workers with distribution of EPF, SOCSO, retraining programme, etc. Therefore lay off foreign workers are left with nothing especially if their contractors that brought them here does not pay them compensation or return them back to their homeland. Double jeopardy for our country. In the end everyone looses. How can corporate figures declare that employees are their best asset if they could be dismissed with such ease. Hypocritical!

Above that, could the Prime Minister in waiting, Najib Tun Razak, accelerate the introduction of the second stimulus plan or better known as second pump-priming exercise and also fully utilise the first stimulus plan. At the moment only 70% of the first stimulus plan is executed. We're running in a fiscal deficit, every move MUST be scrutinise. Perhaps he didn't notice the impact of the impending recession for the Asian market. China can't hold on long by providing a buffer zone for us, sooner or later China and even India's economy will be destroyed if no other Asian countries reinforces their buying power. HURRY UP, bring out the big guns!!

IJN survives from another stupid government proposal.

07-01-2009: Sime Darby drops bid for IJN


by Surin Murugiah
Email us your feedback at fd@bizedge.com

KUALA LUMPUR: Plantation giant Sime Darby Bhd has withdrawn its bid to privatise the National Heart Institute (IJN), a move that effectively relieves the cabinet from reversing its earlier approval of the proposal.

In an announcement to Bursa Malaysia yesterday, the conglomerate said it decided not to pursue the plan after taking into consideration the public sentiment and feedback received since its proposal was made public on Dec 18.

“Sime Darby would nevertheless continue to look for opportunities for expansion in the healthcare sector,” the company said.

Last Dec 17, The Edge Financial Daily had reported that Sime Darby had expressed its interest to privatise IJN. The following day, the company announced that the government had, in principle, approved its plan to acquire a 51% stake in IJN.

The announcement was greeted with a huge public outcry, drawing criticism from various quarters, despite Sime Darby coming out to assure the public that the social obligations of IJN would not be affected in any way by the proposed privatisation.

Even Sime Darby’s chairman Tun Musa Hitam, who rarely comments on the business proposals of the company, came out to state that the privatisation of IJN would not burden poor patients and pensioners as those requiring medical attention were always given priority. Musa said Sime Darby spent about RM3 million annually at its Subang Jaya Medical Centre for needy patients, including heart cases.

But public sentiment against the proposal was overwhelming, forcing the government to relook at the proposal, just two days after the cabinet had given its green light.

On Dec 19, Finance Minister Datuk Seri Najib Razak announced that the government had decided to defer the decision on the matter pending further study. He said that the finance and health ministries, and the Economic Planning Unit would conduct an in-depth study before the government decides on its privatisation.

The finance ministry owns IJN via its 99.99% stake in IJN Holdings.
Najib had then dismissed suggestions that the cabinet decision had something to do with the Kuala Terengganu by-election.

Critics of the privatisation were primarily concerned that a privatised IJN would deprive civil servants of the almost-free medical treatment they enjoy now while non-civil servants would end up paying higher charges.

Civil servants pay a nominal fee of RM1 not just at IJN but also at all government hospitals for treatment.

There were also issues raised as to why a profitably run heart centre needs to be privatised.
IJN posted a revenue of RM287.3 million last year, up 11.7% from RM257.5 million in 2006, according to filings with the Companies Commission of Malaysia. However, net profit was lower at RM13.6 million against RM22 million previously.

Since its establishment, IJN has earned a reputation as a leading centre for cardiac care in the region. It has treated well over a million patients, including former premier Tun Dr Mahathir Mohamad.

(Extract from :THE EDGE DAILY )

Recession came knocking at the door.

Based on my last post, so the USD$700 billion injection bill was passed after observing a near total collapse of the global financial system, but there was a catch there; the remedy did not HALT THE MOMENTUM of the crisis! Great so the "man made disaster" was so terrible that stocks and indices across the globe felt to their knees at the lowest benchmark they could be in over a decade or so. Eight (8) national central banks made a coordinated rate cut (50bps = 0.5%) that was spurred by the Reserve Bank of Australia (RBA). An unprecedented move I would say in this context. However the market did not felt comfortable with the move and it went on a free fall continuously. Spurring the first Japanese insurance company to go bust, Yamato Life Insurance Co. This is so serious. As of the time of writing, the market seems to be reacting positively now with Dow Jones scoring up a couple of hundred points (*Figure unsure*), hopefully it will sooner or later subside the invasion of one of the worst financial crisis since The Great Depression of 1929.

I personally classify this invasion into three (3) waves of attack. The first wave was the fallout of the sub-prime mortgage crisis. The greed of banks to stimulate quick revenue had overlooked the potential disastrous risk looming around the corner since early of 2000s. Alan Greenspan, former president of the Federal Reserve like it or not, did contribute to this disaster. His continuous ambitious plan of cutting rates to stimulate growth, and by hedging those risk by derivatives is uplifting the whole disaster into the reality region. George Soros and Warren Buffet had once stated the destructive nature of derivatives to the financial market long before but this was strongly opposed by Greenspan even till today. The cooperation between banks, mortgage institution and rating agency (Standard & Poor's and Moody's) contributed to the overall downfall.

Second wave, hit the financial institutions across the European continent and starting to infest into the Asian markets with the first casualty of the Japanese Yamato Life Insurance Co. At the current moment although central banks and governments had injected billions of USD$ into the money market to reliquidify it after weeks of being frozen up due to the loss of confidence, the scenario remains the same (free fall). Therefore I would have to agree with other commentators that this is not a financial crisis because even though funds are injected, the financial landscape remain motionless to the injection and it can be conclude it is a confidence crisis. Whereby investors, depositors, policyholder, and et cetera are all loosing confidence to the financial system. They've been fooled once and not wanting twice. The continuous distrust would halt the entire economy form correcting itself. That's what the fearful scenario is happening.

The third wave is when it starts to hit the non-financial institution, such as the manufacturing, agriculture, servicing , etc industries. Giant corporation such as GM, GE, Toyota, Honda and etc are already expecting the deep cut in their yearly revenue. Which would ultimately slash the employment rate, creating unrest, social problems and the lists goes on and on.

Malaysia is still pretty much safe as a result of de-coupling from the US's economy, well maybe at the moment but definitely not for long. Singapore, our very own neighbour had fallen to a recession mid of last week. Should we strike the panic button? I really think we should.

WHAT? NO US$700 billion bail out plan?

ITS like WOOOW!! their faith is about to be sealed for the coming US election. And when I mean 'their' faith, i mean it includes us as well. No bail out plan, more victims of the financial crisis coming up next. So where do we head now? US Congress is playing politics with the world economy. How do we save these so called New York fatcats from utterly destroying the US financial systems? I'll just parrot out whatever they had stated regarding the crisis because in my capacity as a first year business student (Accounting & finance), I'm still lack of the experience necessary to give out comments.

The main reason for the failure to pass out that specific bill was because many lawmakers were unsure of the consequences of the bill's results. Its a major scenario whereby giving one man (Henry Paulson-US Treasury Secretary) wielding too much power to command the distribution of $700 billion tax payer monies. Yea this maybe a plan to save WallStreet from crumbling through buying out toxic assets from troubled financial institution but who is saving and protecting the tax payers monies. What happens if the whole bail out plan turns to out to be a failure? We're talking about $700 billion , no small amount. There was lack of discussion between the congressman with the US Treasury-Henry Paulson and Federal Reserve-Ban Bernanke. Too much information are remaining ambiguous. The bill stated that it would:

"Give power to the US Treasury Secretary- Henry Paulson the authority to
buy out toxic assets at a price he deems fit in the market price".

"He deems fit" is too ambiguous for these bill to be accepted by many lawmakers.

Secondly, many lawmakers hold a stand in their principle of a freemarket, whereby government intervention is unnecessary because hoping the market to stabilise itself as times goes by. But that would also leave room for more financial institution to fail. Every second is money, on Monday morning when Asian markets reopened, we could see waves after waves of drooping share prices, serious bearish outlook where thousand of sellouts occurring at once even though at that time the bill was still on discussion (no rejected yet). However though the Western countries are at the brink of recession, we here in the Asia are being supported by the continuous growth of China and India. Therefore the upcoming potential would not be a spillover effect in Asia although there will be slight turbulence form time to time. What the Deputy Prime Minister also the new Finance Minister said that "our fundamentals are strong" was a complete crap statement because its not because of our fundamentals but because of the ongoing growth rate of China and India that plays a supporting role in stabilising us. Our reliability to the US to buy our products especially crude palm oil is still strong, therefore the recession impact would definitely have a knock-on effect on us but perhaps only a lighter dose.

Overall outlook is still not good, near horrible if nothing is still done tomorrow by the US lawmakers. So from onwards after these crisis, the credibility financial institution of US banks would be a legacy to them, no longer able to rise again after so much of scandal revealed. Some layman may say the economy is bad, but why is bad? Its because the banks across the globe, including our central bank (Bank Negara) are too greedy with their slow but steady income and sought more income by commiting unethical business dealings. Our central bank governor may had retained our interest rate to promote growth, but who knows whats happening in the administration of Bank Negara. Some screw up matter could be happening in there.

This is already a world issue sophisticatedly brought to unprecendented level of fear in a new form of World War coming in the form of survival for the fittest. I do hope I'll still be able to find a job after I've graduated. GULPSSS!!! If there is SOMEONE out there who could mobilise the recapitalisation of important financial institution. PLS DO APPEAR QUICK!!

The stupidity of Malaysian government

Are we viable enough to achieve Vision 2020 like what Mahathir Mohammad had promised during his tenure as Malaysia's 4th Prime Minister. To me, its becoming more of a vague promise. Oh my my, the act of heroism by Mahathir when he save us from the 1997 Asian Financial Crisis by refusing delibrately to receive immediate financial aid from the International Monetary Fund (IMF) and the World Bank seems to be forgotten by time. His influence is just not that powerfull anymore, no more the ohmm in him. With the recent 12th General Election just passed when our "beloved" Malaysia's 5th Prime Minister Abdullah Ahmad Badawi rejected the speculated date of the dissolvement of Parliament only to give us a shock the next day by announcing the dissolvement of Parliament. Contradicting his own words and I have no bloordy idea does he even realised that. Secondly after the election, was the sudden announcement of "harga petrol naik" again when all along they fooled us by publicly declaring that petrol price will increase only in the month of August by earliest. Another so-called suprise action being taken by Badawi. Not bad, he got potential to be a liar. (Psst..., I haven't even touch on the issue of how he got Jeanne Danker to be Puan Abdullah, but I won't come to that because that is his private life) Then came to this issue about having to change the uniform of female school students, who the PAS people convey their disgust on how old man are being turn-on by these younger girls. To be honest with you, I felt like laughing loudly the moment I read that even now while typing this up. How stupid can a stupid person be? I wonder have they ever listen to Frank Sinatra's "My Way". A little freedom in spirit of democracy here perhaps would be vital to ensure that we are still on track to achieve Vision 2020 to be a developed country. The key difference why we are facing a mountain of task to accomplish Vision 2020 when other countries without Vision 2020 can achieve developed country status is because of people like them who talk bullshit and walk on cow shit. Oh ya i forgot, there is also the Lingam case "judge fixing scandal" with the Royal Commision of Inquiry being established to evaluate the authencity of the video clip taken by Loh Gwo Burne (MP of Kelana Jaya) and produce to the government and media by Anwar Ibrahim (de facto PKR leader). The whole scenario was just to prove that the person in the video clip is indeed Lingam himself and not another person who "looks like him, sounded like him but not him". If you take a stroll at the highest floor in Pyramid Subang Jaya new wing, you'll notice there is a Radioactive shop that sells shirts with those words printed on it. Nothing unique, but I think Radioactive is quite a popular brand (can be argue or counter-argue) and they are taking this new pick-up line from Lingam. I wonder do they pay him royalty? Next was the newly announcement to bar media into the Parliament. Is that called a move to promote transparent governance?
Some of these things might sound trivial (media barred) while some are seriously important (petrol price increase), but what I'm trying to shine here is that how can a government make such stupid moves in the first place. In my humble opinion, aren't every action done had been past through a series of check and scrutinisation before commiting to it. If a government policy is to be question massively by so many non-political parties, then what are they doing in the Parliament? Something must not be right for that to happen right? If things goes on like this how is it possible to see Malaysia achieve a developed country status via Vision 2020.