Slowing Demand Pointing to Recession

Governments in Asia have been advised to help stimulate domestic demand to avoid plunging into deep recession. Markets in US and Europe are suffering from severe slowdown amidst gloomy financial results from corporations and rising unemployment via retrenchments.

Unemployment in the US could hit 8.5% by mid 2009. Sales season has started a month earlier since early November but the numbers are not very encouraging. Sales of new houses dipped 2.9% in November compared to the same period last year.

Japan's production of cars, trucks and buses marked its steepest drop in at least four decades in November, an industry group said Thursday, as the fallout from the U.S. slowdown crimped auto demand.

Vehicle production in Japan, home to Toyota Motor Corp. and other major automakers, plunged 20.4 percent in November compared to the same month a year ago to 854,171 vehicles, the Japan Automobile Manufacturers Association said.

Sales of new autos are expected to stand at 4.86 million in 2009, down 4.9 percent from what it's projecting for this year at 5.11 million, the group said.

New vehicle sales in Japan have never dipped below the 5 million mark since 1980.

The tourism industry should brace for the worse too. The industry is expected to contract by 18% next year.

In Malaysia, consumer sentiment is following similar patterns. Economic and employment data will be telling in the next three months. A few legal officers I have spoken to indicated a rising number of enquiries from employers on retrenchment.

Even if job loses are kept to minimum, many factories are cutting production and have requested their workers to take unpaid leave. This will definitely affect income and consumption.

I would like to urge the government to consider a few pertinent steps:

1. Keep EPF contribution at 11%. The reduction of EPF saving by 3% does not help to motivate consumers to spend. Instead, the government should reduce income tax by 3% and increase the level of taxable income to RM5k per month.
2. Allocate additional funds to state governments to face imminent economic downturn in their respective states. The federal government should give back at least 10% of total direct taxes collected from each state.
3. Prices of many consumer items have not come down despite further drops in retail oil prices. The government should publish a schedule of projected oil prices and provide a guarantee on these prices. This will provide certainty to businesses to consider price reductions.
4. This is the time to put more attention on domestic sector and SMEs. We cannot continue to depend on FDIs to grow our economy. Hence, this is the time to do the right thing including liberalising the FIC guidelines, the ICA and the NEP.

Immediate attention has to be given to address the imminent economic slowdown. We have about a month to come out with mitigating solutions.

Merry Christmas and A Happy New Year

Wishing all Malaysians a Merry Christmas and a Happy New Year 2009. God Bless!

When the Going is Tough, the Tough Get Going in Penang

Chief Minister of Penang, Lim Guan Eng has admitted it was tough going for him in his new role to govern the state. It was never been easy for the last 3 chief ministers. All of them were defeated in general elections.

Penang is tough to govern because its people are very opinionated. Their expectations are high. Hence, politicians who wanted to rule the state should understand the dynamics of this society. Above all, Penangites are very practical.

Gerakan's thirty nine years rule was a reflection of this reality. They appreciated Dr Lim Chong Eu's success in industrialising Penang. Kept him long enough to help develop Penang's economy and booted him out just when he had lost touch of the ground.

Meanwhile, Gerakan was kept in power to keep UMNO away from the crown jewel. This arrangement was kept until it was obvious that the state can no longer grow and prosper under the same model. Moreover, UMNO's excesses and arrogance drew severe criticism and disgust from many.

Gerakan, instead of leading, was led by the nose. Hence, on the 2008 general election the voters decided to turn to an untested alliance for leadership.

Prevailing negative sentiment towards UMNO may keep many from voting back the BN but Lim should take cognisance that his administration cannot depend solely on this perception to stay in power. Politics is never predictable.

Najib Razak will do anything to avoid the disintegration of UMNO and BN. It includes a gradual liberalisation of the NEP to accommodate the interests of non-Malays. Najib will defend the survival of the Malay race through "ketuanan Melayu" but not to the extend it suppresses the non-Malays.

Recent public debate and coarse discourse on "ketuanan Melayu" (Malay Supremacy) can help to redefine the notion of dominance and supremacy. His banker brother, Nazir Razak, was quick to point out that NEP has outlived its usefulness and should be reviewed to ensure the country's competitiveness does not continue to suffer.

If the incoming prime minister can deliver quick economic goodies and help to mend the existing rifts among his coalition partners, he may yet enjoy a long and stable premiership. It is a fact that good times are the best remedy to his battered personal image. If Najib can provide a solid, fair and just leadership, his flaws and faults can be easily forgiven and forgotten.

Component parties which were defeated in the last general election are pining their hope on Najib's wisdom to lead them out of the wood. Hence, many of their newly elected leaders are already scrambling for party posts to position themselves for power grab after the next general election.

Their prophecy may just come true and the BN may yet sweep to power again if the DAP led administration allows public expectations and their opponents to overwhelm their true ability to govern.

The fate of the DAP led government in Penang lies in the hand of Lim Guan Eng. He is their most charismatic and influential leader. The ability of his party to see off a resurgent BN led by a more articulate and dynamic UMNO leader depends on Lim's own ability to focus on his role as the head of state.

Facing an intensive 'friendly' competition from his coalition partner, Parti Keadilan Rakyat, to grow and compete for talents means it is not possible for Lim to spend most of his time on Penang. It is crucial for Lim to play a role in the parliament to add prestige to his leadership of the most senior party in Pakatan Rakyat.

This is Lim's major dilemma. He will be attacked on his commitment to the state if he contests both parliament and state seats in the next general election. On the other hand, Lim appears to be the best person to lead the state at this moment. He has yet to fully utilize his star power and huge mandate to mobilise the people to work towards realizing his plans for the state. Given more time, Lim can only get better at his role as the chief minister.

Lim has set his intention right to work closely with Najib to help develop Penang. This is something Najib cannot reject if he wants to build himself a legacy as an inclusive prime minister. Najib may also use this opportunity to lure non-Malay supporters back to BN by showing that he is not a conservative right wing UMNO leader bend at marginalizing the non-Malays.

On the other hand if Lim is able to get more financial support and development projects from the federal government, he might be able to use the assistance to deliver more economic goods to the people and help to cushion the slowdown of export oriented manufacturing sector.

Forging a cordial working relationship with Najib is an important strategy. Both leaders need a cordial relationship more than a hostile one. Najib's popularity amongst non-Malays is much less than impressive. Lim needs to strengthen his position in Penang before he can attempt to negotiate for more decentralisation from the federal government. More decentralisation is good for Penang.

Next, it is almost chronic for Lim to strengthen his line-up in government. A leader said it is easy to get the elected representatives to organise a protest but not when comes to governance. Hence, Lim must take upon himself to become the chief of brain gain in the party. He needs all the talents he can get to help him. Penang in the 21st century has to compete with hundreds of similar size cities in the world.

It is a myth to expect the voters to give him two terms or 10 years at least to lead the state. He needs to be more ambitious. He needs to fully utilize his star power and popularity to provide a transformational leadership we believe he can give to transform Penang in the next 4 years.

If Lim can combine effectiveness, efficiency and innovation with his political agenda to create a honest government, eradicate corruption, abolish racism and enhance democracy, his leadership will create a benchmark for leaders in other states.

The point is Lim and his supporters must believe in transformational change and that this change does not need to wait 10 years to begin. It is already happening. As we move forward, we must be willing to abandon old standards, old habits, old frameworks and old mindset.

Lets aim for a better Penang in next 10 months.

Jeff Ooi's Motor Mouth

Jeff Ooi at the Penang Cultural Nite

CM Lim Guan Eng at the PCN

Penangites and Visitors Having a Good Time

At a dinner last night, I was alerted to statement made by Jeff Ooi in his latest interview with the Chinese edition of Malaysiakini.com. When asked about my last opinion piece on DAP in Penang, Jeff Ooi said this:

"他也嘲讽邱继平为了向政府申请举行槟州文化活动的资金，而不惜采用死缠烂打及以攻为守的批评手段."

Translation: Jeff Ooi sarcastically said Khoo Kay Peng has tried every
tricks and even to the extent of launching offensive criticism, just to secure
funding from the state government for his Penang Cultural Festival.

Jeff Ooi is a member of parliament and a chief of staff in the chief minister's office. His statement is a yardstick of his leadership credibility. Surprisingly, Jeff cannot accept a constructive criticism about his and his party's performance.

At the recently concluded New Vision for Penang's conference, which I was a panel speaker, a number of DAP senior leaders approached me about the article and told me that they accepted majority of my views.

Most importantly, my intention was sincere. Like many Penangites, I abhor the state UMNO's leadership. I look forward to a new transformational leadership. I want a people oriented and responsible government.

However, this new leadership cannot be yet another mirror image of the old. UMNO's intolerance of criticism is a classic cause of the coalition's failure. To be fair, many of the CM personal assistants and DAP state leaders were very supportive and helpful to us.

I have referred Jeff Ooi's statement to a number of them and they were equally surprised by what he has said.

Those who had attended our event knew that the entire Penang Cultural Fest was well supported by the private sector and fellow Penangites. The organisers had wanted to inspire Penangites that they do not have to depend on the government to celebrate their own diversity and rich heritage.

Only days ago I met Chief Minister Lim Guan Eng at the Komtar Pacific launch and we spoke briefly on the initiative to make next year's Penang Cultural Fest a truly regional event. He enthusiastically gave his approval.

Since Jeff Ooi is the chief of staff, I am surprised that he made such a malicious claim that I was pushing the state government to fund my event. It is obvious that the state government did not give us such financial backing and we did not push for it. We were thankful and happy when state leaders came with their family to participate in our programmes. Chow Kon Yeow and family came to our Korean Orchestra, CM's family was at the Penang Island Jazz Festival.

Penang Governor, Danny Law, Linda Ong, Abdul Malik, Liew Chin Tong, and many more came. Special Assistant Jeffrey Chew and family were at almost all programmes.

Did we look unhappy? Was the Penang Cultural Fest disrupted or affected?

I have said earlier that Jeff will be judged by his statement. It is odd as a chief of staff he was not in the loop. Perhaps he was too busy doing self-promotion. I was spot on that the Chief Minister needs a real chief of staff.

Guan Eng needs someone more sensible and responsible with his words and action. Jeff Ooi was quick to praise a failed event but was even quicker to maliciously put down a successful one. He was at one of our events.

I am giving him 72 hours to retract his allegation. With a member like Jeff, DAP does not need other talents.

An editor of Malaysiakini.com just called me. I have asked him to do 3 things:

1. I was disappointed his writer did not ask for my response before publishing Jeff's interview. He should publish my response by Monday.
2. Contact the Chief Minister office to seek clarification on the matter
3. Ask Jeff to provide a solid evidence on his allegation about me or retract his allegation

If Jeff can't take the heat, he should stay out of the kitchen. He did nothing for Penang Cultural Fest, got a free dinner cum entertainment and tossed us shit. Jeff's allegation is an insult to all our partners, sponsors, performers, state leaders who have helped and encouraged us and fellow Penangites.

Ineffective Politicians Should Quit

Enough is enough. We have had enough of ineffective politicians and policy makers telling us that poor governance is not their fault. Yet, they wanted to rule our life. Making yoga illegal. Trying to become our moral guardians. Make petty, racist and gender chauvinist statements in the parliament. Some acting more like tyrants than policy makers.

It is time for these politicians to do their job. Where are the necessary actions and policy responses to the myriad of issues and problems faced by the society? Why allow indiscriminate hill side development? Why allow express buses continue to menace the lives of innocent passengers? Are we expected to be responsible to check on our own if the buses are safe to take?

Don't be foolish. Do not think that we are fools.

Politicians from both sides of the fence should really start to do something about rising crime, environmental problems, cleanliness and others.

While the global economy continues to wobble, we have not heard of any concise plan yet from the government to help the nation prepare against possible economic downturn. I have received feedback from friends and family members that food cost is still very high although retail oil prices have been reduced. What is the government doing about this?

Minister Shahrir Samad should bring down further the retail oil prices. If he is hiking the prices according to market prices, when isn't he doing the same when the prices have gone down? Shahrir should not just ask the people to be patient. He should do his job or just quit.

I have residences in both Penang and Selangor. Both areas are still filthy, dirty and unsafe. What is the PR government going to do?

People are beginning to find life as usual even after a change of government. We did not hire new people to do the same old things.

If only more politicians can be like Balakong Assemblyman Yap. I called him to assist a family in Bandar Tun Hussein and he quickly dispatched his team including Penghulu Mr Neo within minutes and assisted us all the way.

Gerakan leaders are fuming mad about Pakatan's councillors in Penang. What did they do when they were in power? Why were the Cove condominiums in Tanjung Bungah approved? Why gave approvals to 3 of the 4 hotels within the heritage zone? If Gerakan were still in power, they would have approved the PGCC regardless of the public outcry.

We do not need another pot calling a kettle black. Stop the nuisance and just do your job. No one asks you seek for election if you are not keen to do your work.

Framework Institutions for Development

Last weekend I was invited by Professor Woo Wing Thye to speak at the New Economy Vision for Penang conference. I was requested to speak on establishing framework institutions for development.

My initial reaction was to question the need for comprehensive, accountable and transparent frameworks or simply more institutions. Apparently, we have many framework institutions but very few good frameworks. Implementation and enforcement of the development frameworks are often mired with unprofessionalism.

The recent Bukit Antarabangsa tragedy is a prime example of institutional failure. We should focus on establishing common sense and standards in a framework not building more institutions. In this case, the previous state government and the local authority have failed to work within a sound framework for development. Approvals for development were given without taking into consideration long term public safety and environmental protection.

Our current development framework lacked a preventive mechanism. Hence, it is very frustrating to hear calls for a stop of all hillside projects whenever a tragedy strikes. This is not a stand alone case.

Express bus accidents due to negligence by operators and drivers have been repeated despite several sting operations ran by the authorities. We should not take a lukewarm approach to solve a long standing problem.

Until and unless these institutions and policy makers take a more people oriented approach, we are going to witness endless of mismanagement and poor policy decisions.

I pointed out the negative influence of political agenda driving development frameworks. Once we allow politics into our socio-economic policies, these frameworks are no longer based on internal needs and external challenges. In the construction sector, lobbyists are very powerful and influential. Many of these companies have recruited past and present politicians to represent their interest.

Moving forward, the people need to raise their expectations of governance and role of politicians. We must be critical of poor governance and policy decision. To do so, we need to set our priority right. We should choose mutual benefit over zero-sum mentality. Nation over race. Leader over laggard.

These framework institutions for development must help to facilitate and not frustrate positive development.

Not only hillside development must be reviewed, many projects on reclaimed land must be reconsidered as well. In the long run, these projects pose a threat to the environment and human lives.

Bukit Antarabangsa Landslide & A Silly Minister

Ridiculous. This is the right word to describe outgoing Housing & Local Government Minister Ong Ka Chuan.

He said there is no clear evidence to show that the landslide in Bukit Antarabangsa was a result of human negligence.

This is what he said:

"If it was human negligence, the landslide would have occurred a year or two after the houses were built but the houses here were built since 15 years ago," he was quoted as saying by Bernama.

Then, he contradicted himself:

"We have to study the matter, we are saddened by this tragedy and cannot allow it to recur as it affects public safety. We have to carry out a definitive probe," he added.

This silly minister was quick to rule out human negligence before even a proper probe is being conducted. Soil erosion and the possibility of it happening can be projected if a proper EIA was conducted before an approval is given.

If an approval was given without a proper study, isn't this considered as human negligence?

Being too close to the developers will not help Ong being more sober.

In the incident, four people were killed and 14 bungalows in Taman Bukit Utama and Taman Bukit Mewah were damaged. None of the people affected was related to Ong. Maybe this is the reason for his insensitivity.

Penang Cultural Fest 2008

Finally, the show this year is over. We would like to thank enthusiastic Penangites and foreign guests for their support.

When we wanted to organise the inaugural Penang Cultural Fest, many of us were not sure if the people will come out to support us. But you did. Thank you. Hope to see more of you next year.

We need volunteers for next year's festival. Please email me your contact details and area of interest (music, art, food, street market & performance, fun sports)

Read more blog reactions: the Penang Cultural Nite, PCF launch, another on the launch.

News articles:

The Star: 1, 2, 3 (a number of articles on Korean orchestra)

The Edge Daily: 1,

NST: 1,

Many more...just google for Penang Cultural Fest 2008.

I will post more pictures later.