Chavez’s legacy will live on by Martin Khor - The STAR

While his death sparked an outpouring of grief, his legacy will forever be remembered.

HUGO Chavez, who died last week, mourned by millions of Venezuelan citizens and people around the South American region, was a figure that was larger than life.

During his 14 years as president of Venezuela, he managed to institute profound changes with effects on his country and the developing world long after his death.

Some leaders and media outlets in the West have been giving misleading or trivialised commentaries, just as they tried to demonise him during his lifetime.

This is to be expected, since Chavez was felt by the establishment as a thorn in the flesh.

He had not minced words in criticising and acting against the so-called Washington Consensus, a nexus of policies and institutions (including the International Monetary Fund, the World Bank and the US Treasury) that promoted a version of free-market fundamentalism that adversely affected the economic and social life of the Latin American region.

Chavez’s greatest feat was to identify and break out from the straightjacket of the Washington Consensus and to formulate policies that were very different, which he believed would benefit the people, especially the poor.

One of the first things he did as president, after being elected in 1998 with a large majority, was to re-organise the national oil industry and to play a leading role in reviving Opec, the organisation of oil exporting countries.

The price of oil shot up from around US$10 (RM30) a barrel in 1998 to US$20 (RM60), and then to around the US$100 (RM300) level where it now is.

The country’s net oil export revenues climbed from around US$14bil (RM42bil) in 1999 to US$60bil (RM180bil) in 2011.

The hugely increased oil revenues was the basis for financing many innovative social programmes.

Known as “missions”, they included raising literacy and education levels, providing healthcare to the poor through thousands of doctors and health assistants in the communities and providing cheap food for the urban population through special supermarkets.

In the rural areas, there were separate “missions” to look after the peasants, resolve problems of mining communities, and meet the interests of indigenous peoples.

These well-documented social programmes and accompanying economic policies did much to improve the lot of the poor.

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GE13: How to choose our Leader using the C.A.P.I. method

This GE 13 we the rakyat will be choosing our leaders; MPs and ADUNs. These Malaysians will eventually steer our nation the next 5 years. Our votes are crucial and enormously important. We must be guided with reason, know-how and conscience.

I would like to share with you a method I designed for the corporate leaders in choosing Top Talents for their organization. This one is free, because Malaysia is worth it.  We call it C.A.P.I., making it easy for recall. I hope it will help you choose the best for Malaysia.

Capacity

A person’s capacity is the basic foundation of his or her ability to deliver. No amount of training or exposure can bring out what is expected from a talent if he or she lacks the capacity. Like a car engine, capacity determines the ability to perform under different circumstances. The larger the capacity, the greater the propensity to deliver. We cannot ask a car with a 4 cylinder engine of 1500CC to perform like a 12 cylinder with 6000CC one no matter how much we try to modify it. That would be sending the person to failure. When the leader fails, our country suffers.

Achievement

True achievement is about results; not efforts, not promises, not words. Top talents focus their energies on where the results are, they make things happen, they deliver. They spend more time doing and delivering. They don’t talk as much as they do. When they talk, it is to engage people to perform. They want to get things done, make things right. They lead people to actions that are based on clear goals. We must choose leaders that deliver.

People Skills

Top talents deliver through working with and through people. They harness and focus the energy of others toward common goals. They are team leaders. Talent who prefers working alone are specialists and they are great support for top talents. Remember that we must choose talents that work with others in their effort to move up in an organization, not rise up by stepping on them. The latter will cause future disunity to the team.

In the Malaysian context we must also choose leaders who are willing to listen and work with not just a particular race, but every ethnic group. Not just with those in the Peninsular but also Sabah and Sarawak and vice versa. Care for those in urban as well as the rural areas plus willing to engage not just the old, but the middle aged and the young. In short, we must choose a leader that is with the rakyat, one that will work with us and care much about our well-being.

Integrity

Leadership must come with integrity - there is no compromise. Without integrity talent is a liability. No matter how brilliant, knowledgeable or successful, lack of integrity disqualifies any and all talent for any leadership position. We must check their track record like their propensity to lie, practice double standards, say one thing and do the other. In short in choosing our leaders, integrity is the final sift that must not be put aside no matter what.

Anas Zubedy

Kuala Lumpur 

First ABU, now ABCD, and then what?

In striving to make Malaysia a better nation we must be careful with the road taken.

We must not sacrifice the journey for the goal, the means for the end. We need to change Malaysia in the right way towards the right goal. It may take a longer time and we may not be able to see the fruits of our labour but our future generations will profit from it. It is slow, but sure. Good and lasting change needs time to be cultured, we cannot be in a hurry.

That is why on many occasions I have registered my disagreement with the ABU’s unthinking, irresponsible and destructive approach in choosing our MPs and ADUNs in the effort to advance Malaysian politics. The method in effect follows the framework that promotes the kind of decision making that uses blanket, all-or-nothing, blind support or rejection. Such a campaign breeds a longer term danger. It spurs more unthinking divisive positions and a precursor to civil hostility.

Today this divisive scheme has given birth to another blanket stupidity, ABCD; Asalkan Bukan Cina DAP. I have seen this acronym popping in my FB threads and posts that belong to PAS supporters. This trend perhaps was triggered after CM Lim Guan Eng politicised the ‘Allah’ issue via his Christmas message.

What if that ‘Cina DAP’ is better than the other candidates no matter what their background or ethnicity? Similarly, in the case of ABU, what if the UMNO candidate is the better choice? Aren’t we giving the other candidate a free ride? Will we be able to secure the best of Malaysians to be our lawmakers with this method?

First ABU, now ABCD, and then what? Is this the way we want to go?

Anas Zubedy

Kuala Lumpur

Malaysia under Pakatan Rule (Video) - Dr Chandra

When does Malaysia’s debt becomes a problem? Just the facts please!

Since March 2008, Malaysians find it harder and harder to get non-partisan balance and factual point of views. Each time we read an article whether it is about politics, education, and economics and even bread it would likely be colored with politics – one side trying to paint the other as worst as possible and show off that they are the smarter one. Facts and figures are twisted, half-truths made like solid analysis, hoodwinking the innocent public. All these have made many Malaysians on the verge of giving up on politicians and their cohorts.

One such example where half-truth was made as though it is an intellectually factual economic paper was the recent writing by ‘an enemy of the state’ who go by the name of Pak Sako. I consider him or her an enemy of the state because he or she prefers non-peaceful options like what happened during BERSIH 3 rather than the peaceful and productive action during #KL112. He or she constantly writes article to create panic, negativity and hatred. This fella is tarnishing the name of a national laureate who has left us and the fact is we are not even sure if this person masquerading as Pak Sako is a Malaysian!

In the article about our national debt (http://www.freemalaysiatoday.com/category/opinion/2013/02/27/govt-debt-to-reach-rm1-trillion-by-2020/ ) this Enemy of the State, tried to deceive and alarm readers by focusing on 2 main themes. Firstly, noting our debt in Ringgit so it will look enormous to the average reader instead of the more exact approach by observing percentage over GDP and secondly, by forecasting a sharp increase in debt within the next few years second guessing that the government will continue the current populist agenda even post GE 13. This Enemy of the State did not even offer any comparative figures with other economies!!!

I wanted a more non-politically biased point of view so I asked a close associate who is knowledgeable about economics and not into politics to explain the economics of debt without any partisanship.

Just the facts, please. 

The following is a balanced explanation. At the end of the article, I will also provide a comparative debt ratio of countries all over the world so readers can see for themselves.

Here we go.

If like the US, government is expected to bail out the banking sector debts apart from its own debt, then we need to compare how much revenue government has to cover for any banking debt crisis and government debt crisis. To do that the formula will be as below;

1. Malaysia p.a. (3^rd qtr 2012 figures)
2. Gov. Debt (RM484b) + Private Sector Debt (RM77b)
3. DIVIDE BY Gov. Revenue (52b)

So Malaysia has a Debt cover of 10.8x (times)

How does this debt cover “debt gearing” as per accounting term compare with other countries?

In 2011, a comparative data with other country figures are as below;

• Ireland 43x
• Japan 37x
• United States 16x
• United Kingdom 14x
• Spain 11x
• Portugal 10x
• Netherlands 10x
• France 10x
• Germany 9x
• Greece 8.5x
• Australia 8.4x
• Italy 7.5x

So the debt gearing might look high and of concern, but is almost on par with Germany, France & Netherlands and even lower than US and UK.

But we may also realise that the problem countries like Italy, Greece have slightly lower gearing, and we are on par with problematic Spain.

Are all debt gearing the same?

It all depends on the income generating capacity and economic efficiency to service that debt. Just like companies and individuals, we can borrow to fund productive ventures and invest for income potential or borrow for current consumption i.e. welfare programs by government or cover large public spending deficits etc.

  

Example : Greece debt gearing figure may look good in comparison to Germany, but Greece is having a debt crisis while Germany is not because Germany has managed to consistently run a current account surplus (income positive) for the last decade  compared to Greece which has more consistently run a current account deficit (income negative). So same with Italy & Portugal, even though have similar “gearing ratio” with Germany.

With Malaysia, as long as we get more money/trade flowing into the country, the better we are at servicing our debt. However, since the last 2008 global economic crisis, the government had to spend more on the local economy to help cover the decline in current account surpluses, but it has still consistently been in surplus territory and beginning to show a trend reversal (if CPO prices & manufacturing export figures recover)

Japan is not in the news for any debt crisis, even though very high gearing of 37x, because they borrow heavily from internal country funds rather than foreign (9% of Public Debt), where Malaysia is even lower at 3.6% of Public debt from foreign sources (BNM). Local sources like retirement funds and deposits are more stable source than fickle foreign lenders. And most importantly Japan still consistently runs a current account surplus (however increasing trend/historical high in foreign borrowing, as more foreign funds are needed to fund trade surpluses that have shrunk due to CHINA issues)  

With regards to Malaysian banking sector loans disbursed are for more productive business working capital/loan uses (52%), compared to US (only 15% business loans – while 35% for real estate loans etc ).

In terms of government debt as per our Gross National Production (GDP),  our revenue capacity, globally we are still below the critical 100% level.  

And if future trends are a concern, IMF forecast (2011 figures) suggests that Malaysia Debt per GDP ratio will be incremental to a still comparatively safe 60% level by 2016 (please refer the table below).

Conclusion

So as long as we can maintain our GDP growth, and get business growing rather than hinder it, then we should be okay.

At the end of the article, The Enemy of The State suggested that, “Tackling debt ought to be a major subject of political discourse in Malaysia.”

Any thinking and caring Malaysian should want the government to be vigilant with our debt. But the major subject of political discourse in Malaysia should be tackling these enemies of the state who are doing a disservice to the country by deliberately propagating lies and half-truths just to win some votes. Politicians and the rakyat from both sides of the political divide including those non-aligns must not support them.

‘When the facts change, I change my mind. What do you do, sir?’

                                                                                      John Maynard Keynes

Note :

1. Current Account

Current Account is the sum of the balance of trade (exports minus imports of goods and services), net factor income (such as interest and dividends) and net transfer payments (such as foreign aid). The balance of trade is typically the most important part of the current account. And a current account surplus is usually associated with trade surplus. However, for the few countries with substantial overseas assets or liabilities, net factor payments may be significant. Positive net sales to abroad generally contribute to a current account surplus as the value interest or dividends generated abroad is bigger than the value of interest or dividends generated from foreign capital in the country. Net transfer payments are very important part of the current account in poor and developing countries as workers' remittances, donations, aids and grants and official assistance may balance high trade deficits.

2. Gross government debt (sortable; in percent of GDP)

Source:

International Monetary Fund, World Economic Outlook Database of September 2011

IMF: M’sia economy resilient by Cheryl Poo - The STAR

PETALING JAYA: The International Monetary Fund (IMF) praised local policy makers for successfully mitigating the harsh external economic climate, bringing about sustained growth in the first three quarters of 2012 and bringing headline inflation down to a welcome low of 1.3% last September.

Growth was primarily driven by domestic demand supported by improved sentiment and fiscal transfers to low-income households, as well as investment growth in the private and public sectors.

The IMF, in its Malaysia: Financial Sector Stability Assessment report, forecast that improving exports would help the economy expand 5% this year, in spite of the uncertainties of the coming general election.

The report highlighted the capitalisation and profitability of banking institutions, evidenced by significant improvements of asset quality in the last five years.

The IMF relied on stress tests indicators to determine the banking system's resilience to economic and market shocks, and concluded that smaller banks and liquidity would be a potential vulnerability, given banks' reliance on demand deposits.

The report also stated that pre-emptive measures taken by Bank Negara included reductions in the Policy Rate, extension of access to the central bank's standing facility to insurance companies, a temporary reduction of the Reserve Requirement and the extension of a Government Deposit Guarantee (GDG) on all local and foreign currency deposits.

Although total government debt as at December 2011 stood at RM456bil (52% of gross domestic product), IMF credited the Government for the development of its bond market, which had a market turnover of 2.5 times a year comparable to regional peers.

Concerns over the household debt were raised, as it was now the highest in the region. House prices in urban areas had also spiked.

Bank Negara took recovery measures, revising eligibility requirements for credit cards in 2010, and tightening its lending conditions based on the loan-to-value or LTV ratios on mortgages.

The Federal Government also reintroduced the Real Property Gains Tax for housing disposals within five years of purchase, which was further raised in January 2011.

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You cannot legislate the poor into prosperity by legislating the wealthy out of prosperity.

Shared by Steve Forbes on Facebook

An economics professor at a local college made a statement that he had never failed a single student before, but had recently failed an entire class. That class had insisted that Obama's socialism worked and that no one would be poor and no one would be rich, a great equalizer.

The professor then said, "OK, we will have an experiment in this class on Obama's plan".. All grades will be averaged and everyone will receive the same grade so no one will fail and no one will receive an A.... (substituting grades for dollars - something closer to home and more readily understood by all).

After the first test, the grades were averaged and everyone got a B. The students who studied hard were upset and the students who studied little were happy. As the second test rolled around, the students who studied little had studied even less and the ones who studied hard decided they wanted a free ride too so they studied little.

The second test average was a D! No one was happy.

When the 3rd test rolled around, the average was an F.

As the tests proceeded, the scores never increased as bickering, blame and name-calling all resulted in hard feelings and no one would study for the benefit of anyone else.

To their great surprise, ALL FAILED and the professor told them that socialism would also ultimately fail because when the reward is great, the effort to succeed is great, but when government takes all the reward away, no one will try or want to succeed. Could not be any simpler than that. (Please pass this on) These are possibly the 5 best sentences you'll ever read and all applicable to this experiment:

1. You cannot legislate the poor into prosperity by legislating the wealthy out of prosperity.

2. What one person receives without working for, another person must work for without receiving.

3. The government cannot give to anybody anything that the government does not first take from somebody else.

4. You cannot multiply wealth by dividing it!

5. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that is the beginning of the end of any nation.

Can you think of a reason for not sharing this?

Neither could I.