The Imminent Return of Great Depression?

It's clear that yesterday's dramatic intervention in the markets by the Bank of England and other central banks will not be a silver bullet to kill the credit crisis stone dead. But to expect so much would be foolish. After all the 100 billion pumped into the money market could only last until after the New Year. What will happen next? Should more money be pumped in? Or governments are allowing for these economic bubbles in the money market to burst in order to correct the economic cancer which is spreading a little too fast?

The extra liquidity will certainly go some way towards tiding over troubled banks during the difficult Christmas and New Year period, but to assume it will rebuild confidence in capital markets is unrealistic.
However, while this is hardly the end of the whole miserable episode, to coin a phrase, it may well turn out to be the beginning of the end.

One reason for optimism is that for the first time in recent economic history, central banks around the world have taken co-ordinated action to clamp down on the money market mayhem which has reigned since August. They have co-ordinated in the past on currency problems. But while in previous years central bank governors would take soundings from their counterparts all over the world, they would still take action independently. To have them club together so explicitly underlines the global nature of the credit crisis.

Might the central banks be groping their way towards a new international framework for markets and financial stability? Recent history would certainly suggest there might be grounds for governments and their central banks to formalise aspects of their policies.

However, we should certainly expect more collaboration and co-ordination as the central banks work out the best way of solving the current crisis. Yesterday's action, while a start, exposed the sort of anomalies that are contributing to the markets' problems.

Why, for instance, was the intervention not announced on Tuesday, hand in hand with the Fed's decision to cut rates? The two together would have had a greater impact.

At a time when central banks know their ability to cut rates is hobbled by the lurking presence of inflation, such tactics would give their activity greater weight.

Finally, the Bank of England seems to have acknowledged that its concerns about moral hazard are now outweighed by the gravity of the situation.

It makes you wonder how much of this year's problems could have been avoided with a more concerted effort from central banks?

Rio should play it cool over BHP's advances

BHP Billiton is trying to crank up the pressure on Rio Tinto, the object of its desire, and make the rival mining group come to the table for takeover talks. Marius Kloppers, BHP's chief executive, published a new presentation yesterday which was little more than a preening self-justification for why Rio should capitulate.

Marius Kloppers sticks to Rio Tinto offer
Now, in these relatively early exchanges you would expect a suitor to try to make themselves look as handsome as possible. Kloppers' proposal is not an ugly one and clearly the market believes there is some merit to a combination, having added nearly a third to Rio's value since the beginning of November when the BHP proposals materialised.

But Rio also has a perfectly reasonable future by staying single. Having acquired Alcan as recently as July and now under the management of new chief executive Tom Albanese, Rio can make a reasonable argument for why it has a rather brighter future than BHP would be willing to admit. This includes a possible $15bn of disposals it could make to enhance shareholder value. Rio is not in a weak position and should hold out against the BHP pressure.

There is no compelling reason why it should open talks given the current proposal of three BHP shares for every one Rio share. BHP needs to open a dialogue in order to try to start unlocking some of the knotty problems its proposed acquisition throws up, most importantly the competition issues that regulators will investigate with relish.

BHP's implausible argument that there is no regulatory case to answer is a serious weak point in its position. Its current proposal may well be a low-risk way of combining the businesses without the extra cost and uncertainty of launching a hostile bid, but it requires a recommendation from Rio's board and obtaining that is going to cost BHP more than is on the table at the moment. Access to Rio's boardroom will cost more in terms of an improved offer, but also more in terms of much greater thought and analysis of regulatory issues.

There are other risks which mean Rio shareholders should be in no rush to embrace BHP. The reaction of the companies' customers is a big unknown. We are not simply talking about orthodox Western companies. This is a global deal that directly affects the potentially rather more unpredictable interests of bodies such as the Chinese state and its large industrial interests, including the likes of Baosteel. The risk is they will organise themselves against the merger, but what form that organisation will take is anyone's guess.

That's another big risk that needs very careful analysis and consideration before any deal is completed.

Certainly the market is anticipating an improved offer from BHP and, in these situations, the market is usually right.

Anyhow, the credit crunch crisis is worsening and it is showing signs of the return of Great Depression days. Bernake, the current Fed Chairman has devoted most of his working life studying the causes of that nasty stint in world economic cycle, and judging by the way he is acting (calling for orchestrated liquidity plan), he is convinced that the Great Depression might reappear! Remember the falling assets prices especially housing in the late 1920s? Compare this to the current situation! surprise, surprise, can we get out of global recession?

Didn't I tell you so?

In my post- the demise of Malaysian judiciary last month on this blog, I have predicted DS Abdullah Badawi's move of appointing Tan Sri Zaki Tun Azmi as the Court of Appeal President.And much to my delight, I was absolutely correct.Wow, how euphoric I felt upon hearing the news! The announcement of the appointment was made on 5th December by Abdullah, who finally made a good damage control of the judiciary mess by appointing Tan Sri Hamid as the new CJ replacing Tun Ahmad Fairuz, who's contract was not renewed amidst the Lingamgate controversy and call of incompetence while in office.Well, it seems I have managed to read the premier's mind, didn't I? It is just basic understanding of politics darling! A generic Malaysian trademark is that we forget things all to easily. This goes for all Malaysians in general, not just the Malays. It is a unifying sentiment to an extent, "Orang Malaysia mudah lupa."(perhaps Tun Dr. Mahathir should pen a poem based on this title while recovering from his heart bypass!) Why am I claiming so? Well being a proud Malaysian, an a staunch supporter of the Barisan Nasional government ("staunch", not die hard and I have reasons for supporting the government, although I might not agree with all its policies, most of them are sound! and i don't believe in the infallibility of leaders!), it is easy to see why.

The government understands the Malaysian public all too well. After all, the current government has been in power for five decades, they could anticipate Malaysian people's reaction to every problem to say the least. One thing the government knows for certain is that Malaysians in general are temperamental. We condemn rapists when we read the news of increasing rapes, we hurl the minister when toll charges rise,we were angry at MAS management team for making losses and now are still angry at them for not making more profit, we curse at an old Datsun 120y on the highway when it is riding too slow, in short, we get easily upset! It is true to suggest that we are emotional people, aren't we? Moreover, we are also very opinionated, privately but not so publicly, until recent weeks that is. We should be in the top three nations that has everything to say about everything, which makes Malaysian such a great nation! It is what I would call a "healthy Asian democracy." Enough about the greatness of our overactive minds, another defining feature of Malaysianness is what anthropolgists have labelled "momentary temper" or sociologists scientifically claimed "periodic sensual response." This feature is the one manipulated mostly by the government!Well, Gordon Brown would be in wonderland if and only if the British public had this feature! All the prime ministers who have walked in the corridors of power in Malaysia knew this and smile broadly whilst confronted with controversies.

Malaysians quiet down easily after a short period of anger display. In evidence, the Harun Idris scandal, Rahim Thamby Chik scandal, UMNO split, Tun Salleh Abbas's sacking, Rafidah Aziz's AP scandal, all these issues went through a brief period of heavy public criticism but the momentum was lost all to soon. The same with the mess of today's judiciary system. Abdullah played his political card right and chose to appoint Tan Sri Hamid as the new CJ over other candidates. After Tun Fairuz's controversial stint at the helm of the judicial hierarchy, a "cleaner" person is needed to clear up the mess for the time being. Tan Sri Hamid is known around the legal circle for his outstanding judicial qualities and intellectual capacity, evident in a few notable judgements to his credit. Although he is bound to retire by next year, Abdullah chose him over many other candidates, especially Zaki Tun Azmi. Many blogs wrote about the possibility of Zaki being appointed as CJ and the comments received were unanimously out of favour with the idea. It is because Zaki is a high ranking UMNO member (UMNO's attorney for a while then deputy chairman of the powerful disciplinary committee) and was appointed straight to the highest judicial hierarchy in the land, without first presiding over trials in lower courts. Abdullah toyed with the idea, only to find it would be like nailing his own poliical coffin. While many expected the worst - that Zaki will replace Fairuz as CJ, Abdullah delivered a better news in that Zaki would not be CJ, and Hamid will. Malaysians were overwhelmed and will and have already put the judicial mess all behind them, forgetting the judicial controversies altogether. Abdullah has won the first round of battle against the public dissatisfaction. While Malaysians in general think the worst is over that Zaki is not CJ, he is appointed as President of the Court of Appeal. As i have said in my older post on judiciary, this will be a better move for both UMNO and the legal fraternity. Why? UMNO will make itself look vulnerable my probably losing a few cases at high court levels, only to have the decisions overturned at the appeal court level. That is awesome isn't it? Lose the first fight, to win the bigger battle! Watch out for YAA Tan Sr Zaki Tun Azmi as he will be the incoming CJ come April 2008!! A record of merely eight months as a judge, to be appointed as chief to all the judges in this country. Hamid can't do much but temporarily pleasing ignorant Malaysians! He is just warming the seat for Zaki, who is now the legitimate next in line for the CJ throne. A funny legal system we have nowadays, where the judicial novice becomes among the most powerful.Malaysian politics is so interesting, isn't it?! Hidup Pak Lah!=)

Religion and Politics- US less mature than Britain?

There are moments when America seems like a very foreign country and the US elections very distant from Westminster politics.

Mitt Romney's speech on religion - shortly after Tony Blair admitted that politicians who "do God" in the UK are seen as "nutters" - was such an occasion.

The reviews are in and they are mixed. Christian conservative leaders seem impressed by the Republican candidate's, at times, eloquent dissertation on faith in America.

Pat Buchanan, the former presidential candidate declared: "If Mitt Romney wins the Republican nomination, it will be due in large measure to his splendid and moving defence of his faith and beliefs."

Still, it may not be enough to check the phenomenal rise of the Baptist minister Mike Huckabee.

For those used to secular British politics, what seems most alien is the way Romney used the speech to bind himself closely to all branches of Christianity, with friendly nods to Jews and Muslims too, at the expense of the growing number of Americans (one in five by some counts) of no faith at all.

There are not just conservative and liberal Americas or red and blue states, but a religious divide too. Atheists, agnostics and the irreligious have a standing in a political discourse somewhere akin to illegal immigrants. British listeners will find it hard to agree, as Romney claimed, that you can't have freedom without religion.

David Brooks, a very sensible (and rare) conservative columnist at the New York Times, today describes a "war between the faithful and the faithless" in America that hurts both sides.

"Speeches like his both exploit and solidify this divide in people’s minds," he wrote. "The first casualty is the national community. Romney described a community yesterday. Observant Catholics, Baptists, Methodists, Jews and Muslims are inside that community. The nonobservant are not. There was not even a perfunctory sentence showing respect for the nonreligious.

"The second casualty of the faith war is theology itself. In rallying the armies of faith against their supposed enemies, Romney waved away any theological distinctions among them with the brush of his hand. In Romney’s account, faith ends up as wishy-washy as the most New Age-y secularism."

Romney's speech would be unthinkable and unnecessary in Britain. But that is because there is a similar division between faithless and faithful and in British politics it is the secularists and New Labour New Agers that hold sway. Mitt Romney may not have been candid about his specific beliefs, but he wasn't frightened of trying to explain the importance of his faith. Tony Blair, don't forget, did not do God, on orders from Alastair Campbell.

So American politics can seem an alien environment but that doesn't make it any worse than Westminster.

Consumption To save Britain from Recession?

Over the last week prospects for the world economy seem to have slipped again. Money markets are intensely jittery and equity markets have started to register the potential for a severe knock to corporate earnings. Could things get still worse? Could we be on the brink of a severe downturn or even a recession?

In the UK there are some serious vulnerabilities. For a start, the financial sector weakness has a direct impact on GDP because the sector accounts for roughly 10pc of the economy. Some parts of the financial system have been devastated by the market events of the last few months. Structured financial markets are moribund; private equity is a shadow of its former self; commercial property prices have slumped and trading volumes have collapsed; the buy-to-let mortgage market is severely hit. Moreover, there will be knock-on effects on all sorts of ancillary services - lawyers, accountants, surveyors, printers, conference organisers, head-hunters - even economists.
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But there are other areas where both activity and price levels have been high and where bonus and employment levels should hold up well - commodities, gold and oil trading being some obvious examples. Meanwhile, outside the gilded towers of high finance the bulk of activity in the financial services industry is of a more mundane kind - mortgages, pensions, insurance, savings deposits. Much of this - though not mortgages - is likely to continue unaffected.

Apart from the strains in many financial businesses, where a long period of financial excess and easy money has left much of the sector bloated and incompetently managed, the corporate sector in general looks healthy. Profits are high, balance sheets are in generally good shape and businesses are well managed. So you would think that they should be in a reasonable position to weather a downturn. Accordingly, except in the financial sector, as things get tough over the next year businesses shouldn't automatically wield the axe over jobs.

At the other end of the spectrum, manufacturing has struggled for many years and employment levels have been falling. It is far from being bloated. The sector now accounts for only three million jobs. Even so, there is still scope for further pain and for cutbacks. Prospects depend critically upon exports. The US is the big worry. We do not know how serious the American downturn will be but the signs do not look good. Historically our two economies have been closely intertwined.

There has been much talk about decoupling. The centre of gravity of the world is moving to Asia and in 20 years' time China's economy will possibly be larger than America's. But we are not there yet. Yes, China is a huge country and its influence on the world is large and growing, especially in particular sectors. But for all the bluster, its GDP has only recently surpassed the UK's to become the world's fourth largest economy. Moreover, as a reflection of its huge trade surplus, its role in world trade is more about its exports to us than its imports from us.

Nor will the euro-zone be immune to an American slowdown. Interestingly, in Germany, France and Italy the percentage of GDP accounted for by exports to the US is actually higher than it was ten years ago.

Here in the UK, the government sector is not going to be able to offset any weakness from the private sector. Admittedly, there is scant prospect of huge cutbacks in spending but the public sector's contribution to the economy's growth rate is going to be much smaller than it was. It is coming out of a period when spending increased by 5pc-6pc real. It is now set to increase by only 2pc real. The consequence of this is that the public sector is unlikely to be a net creator of jobs. It may even be a net shedder of jobs under pressure from the Government's productivity improvement objectives. This is significant because private sector employment growth has been negligible for years. Just about all the growth in jobs of the last few years has come from the public sector.

But the part of the economy on which so much else will turn is consumer spending. So far it has held up remarkably well. But the omens are not encouraging. The retailers are screaming - as they admittedly often do. The pressure of debt on disposable incomes is intense and the savings ratio is very low. At the moment, real incomes are still rising and the labour market is strong.

But the position is precarious. As it is, unemployment will probably rise a bit next year. If businesses lose their nerve and cut jobs significantly then it could rise a lot. This would then risk setting off a vicious circle - higher unemployment prompts serious weakness in the housing market, which dents consumer confidence further, thus leading to yet weaker spending, so asset values slide, leading to more bad debts for banks and still tighter credit conditions.

Alarmist? Possibly. Such thinking, though, is a valuable counterweight to the prevailing complacency. Most estimates of the losses from the sub-prime mortgage crisis in America come up with figures which look eminently bearable. The big issue, supposedly, is quite where they will land up. Maybe. But this isn't the only big issue. Six months ago, hardly anyone worried about a crisis in the US sub-prime mortgage market. Now everyone knows about this but blithely assumes that there will be nothing else like it to surprise us. Why not? We are shooting at a moving target. If the economy deteriorates, credit quality will deteriorate with it, affecting sub-prime mortgages, prime mortgages, and just about every other sort of debt as well.

Can you take comfort from economists? Hardly. My current forecast is for a decided slowdown, not a collapse into recession - but I'm worried. A gentle slowdown is also the view of most economists. Although they are pretty gloomy creatures by nature, they are cautious and tend to cling to the consensus view like limpets. It used to be quipped that stock markets have forecast ten of the last two recessions but economists have forecast none. What ends up as a recession begins for them as a gentle slowdown.

The fundamental issue is this: excessive debt has been both the threat hanging over the economy and its salvation. Without the large increase in borrowing of the last few years - by both the public and private sectors - the economy would have already slid towards recession. As the credit supply now tightens, will it prove that this borrowing splurge merely postponed the evil day? The answer will turn, I believe, on the related issues of what happens to the housing market and what happens to unemployment.

Zam Zam Alaka Zam

Dato' Seri Zainuddin Maidin aka Zam, is the reason why I love reading Malaysian newspapers. His remarks amuse me to the core on gloomy mornings in Oxford. Zam who is not as bright as he potrays himself to be,started out as a cadet journalist in Utusan, rose up the ranks in ease with his political buttering of leaders of the day, and then was offered a seat in the elections by Dr. Mahathir. The former premier knew that Zam was an incompetent politician, good for nothing but ass-kissing, nonetheless as they were both from Kedah and of Mamak descends, the grand old man of politics made him an MP and later appointed him as parliamentary secretary and then deputy minister. He was never in the first tier of politics, not in second and sadly not even in third. Arguably, the first tiers in the cabinet are made up of the big guns, Pak Lah, Najib, Hishamuddin, Samy, Ong KT, Rafidah, second tiers are like chang kon choy, rais yatim,aziz shamsuddin, tengku adnan and the veterans, third tiers are made up of azalina, shahrizat jalil,and prominent younger blood like khaled nordin. People like zam, and Nazri Aziz are not in the tiers, they are not as important or influential as they claim to be, instead they are peripheral ministers like maximus ongkili, fu ah kiow and other not so famous ministers.Making up for the lack of importance, Zam comes out with amazing remarks in support of everything Pak Lah does. Khairy who constructed the cabinet on behalf of Pak LAH, elevated Zam from being a lowly deputy Information minister, to a full rank minister. By tradition, the Information minister will also be appointed as Secretary General of UMNO and BN, which is a good combination as the SG can dispense party propaganda and news to the public easily as he is in control of the media. This tradition was broken in Pak Lah's tenure. Why? Firstly, he appointed his old close friend, Radzi Sheikh Ahmad as the SG, but he did not appoint him as Information Minister.Zam was promoted and made the Information Minister but not the SG. This was a very smart move indeed, of Oxford education political degree worth. Khairy wanted someone who would butter Abdullah and close every flaw and weakness in the prime minister and make red, blue in the eyes of government controlled media? Radzi would not do a good job of that, he is a lawyer, he has his pride, ego and dignity intact. Who could be that faithful servant? Zam was the obvious candidate: even if Pak Lah asked him to eat dog pooh, I bet you he would treat it like rib eye steak from Outback Steak! Radzi on the other hand was appointed SG because Abdullah felt that it is about time to put the position in a dignified place in politics. It has been tainted with many yes-man before, if Radzi was to make any critical remarks at least his wings could be clipped, he is Abdullah's close friend. Thus, Zam landed with the job, and everyone was happy. Well yes everyone, he provides us with good laughs and allow us to reflect upon ourself just for one moment- are Malaysians that stupid? Zam will continue making eye-raising remarks which are comical in the quest of showing his undying love for Pak Lah. After all these are the days of Islam Hadhari- when you love your leader more than yourself!

Brown : Leader Without Vision

"What am I to do with my life?"


The Tories should not start celebrating too soon because of their opinion poll lead. Indeed, the very words "biggest lead since the Thatcher heyday" should remind them that, between elections, the lady did not normally have opinion poll leads at all; nor did she covet them. Labour was frequently twice as far ahead as the Tories are now - and went on to lose elections with ea

Gordon Brown's far bigger problem is more personal and urgent. It lies in the fact that wherever two members of the political classes meet, it is not just Labour's prospects that are being discussed but his own. More worryingly, the question of "how long he has got" has spread to the more politically-aware pubs and sitting-rooms of Britain.

At one level, this is quite ridiculous. Gordon Brown has been Prime Minister for only five months. The first three of these went very well indeed. Even the ranks of Tuscany (where some of the sceptics were undoubtedly ensconced) could scarce forbear to cheer, albeit through gritted teeth. Brown's confident and inclusive handling of assorted crises flew in the face of preconceptions and silenced all but his most implacable foes, even if they did not quite believe what they were seeing.

The speed with which that mood has changed, not least among those who are generally well-disposed to the Prime Minister, must rank as one of the wonders of modern politics. It is just seven weeks since Gordon Brown was sitting pretty in the polls and the Tories were facing a party conference at which David Cameron's leadership was expected to come under critical scrutiny - precisely because he was making so little headway on the basis of a revisionist Tory agenda.

Then came the incredibly foolish mistake of feeding speculation about a general election to the point at which retreating from it looked like a humiliating climb-down rather than - as it could have been just a week earlier - a magnanimous decision in the national interest taken from a position of strength. (If the novelty of a November election had been pursued, incidentally, it would have been held on the day much of the east of England was encamped in community centres, awaiting the arrival of flood and tempest. Turn-out in marginal Great Yarmouth might have been low).

This single error revived many of the doubts about Gordon Brown's leadership style. He had clearly over-relied on the advice of ambitious courtiers with insufficient experience of either life outside politics or indeed of politics outside the Westminster village. Nobody with any feel for the mood of the electorate could have confused its willingness to be impressed by a new Prime Minister with an enthusiasm for being propelled to the polls, barely halfway through an electoral term.

Since then, Gordon Brown has undoubtedly been afflicted by bad luck. He cannot credibly be held responsible for the unexpected events that have weighed in upon him - the problems of Northern Rock, the case of the disappearing discs or even (as far as we know) the Labour Party funding fiasco. Yet these factors have coalesced to create a public mood that is reflected both in the opinion polls and in speculation about the Prime Minister's own political mortality

Tony Blair never faced the challenge of recovering from a double-digit deficit in the polls, so Gordon Brown has no recent inspiration to draw upon. If one goes back as far as Margaret Thatcher, however, lessons for him are pretty clear, if not wholly encouraging. In the last analysis, the electorate will overlook almost any passing controversy or scandal so long as it is transcended by the strength and appeal of a wider vision which it is the responsibility of the Prime Minister alone to communicate. If Gordon Brown can match Lady Thatcher in that respect, then he too can put all of the current diversions behind him. But can he?

For many who looked to Brown as the prince across the water, eager to revive his bedraggled troops with a message of hope and change, it is the absence of a convincing strategic vision for his Labour government that has been the biggest surprise. To be fair, events have conspired against him. The first few months were spent on managing largely apolitical crises; the last two have been devoted to ducking bullets. Neither context was favourable to the establishment of a clear political credo, setting out an agenda for Brown's Britain.

But modern politics do not really allow the luxury of time for such a crucial piece of image formulation. Quickfire words matched by actions have to set the tone. This is not achieved by a scatter of worthy speeches, many of which come across too much like headline-catching stunts that have not been fully thought through and, crucially, seem to disappear into thin air without the follow-up actions required to imprint them upon public perceptions.

Even when Brown lets it be known that he intends to rely more on the collective wisdom of Labour's relative greybeards, it is irresistible to wonder whether this is a serious message of humility that will be followed up - or alternatively another wheeze from the inner sanctum based on the advice of a focus group that it is something the electorate would like to hear. That is the kind of credibility gap that has to be bridged rapidly with a clear personal agenda and a joined-up programme of government.

One of the big questions before Gordon Brown took over was about the impact on his premiership of his relationship with colleagues, notably those close to Tony Blair, over the previous decade. Would bygones be bygones or would scores be settled? As long as all was going well, it seemed that the former option just might be sustained. That has become less plausible over the past few weeks and Brown must urgently reach out to some of those with ability who have been consigned to outer darkness.

Asked last week what he would like for Christmas, the Prime Minister wryly replied that he would not mind a day off. He should do better than that. However counter-intuitive it may appear to him, he should take a decent break over the festive season rather than flailing around in search of some popularity potion, then come back well-prepared for a fresh start.

Two rules of politics are that any government reaches its sell-by date after a decade while an individual front-line politician might get away with 15 years, after which their face has been around for too long. For governments, the trick is to regenerate through a change of leader and present themselves as a "new" administration. In the current situation, that deals with the first rule but not the second. That one presents a challenge that only Gordon Brown himself can find a way of overcoming.

Life After VW- Proton Survival Game

"Malaysian pride, at home and abroad"

It is officially over. After months of negotiations, the second round of talks between German based automobile company Volkswagen and the national carmaker Proton have finally collapsed. The announcement made by the Second Finance Minister was not entirely surprising as many international analysts have predicted this outcome since the start of the talks. The failure of Proton to offer a more lucrative partnership deal was cited as the primary reason for the failure of the second leg of negotiations which started June this year. Ironically the same reason was behind the fruitless talks between the two companies in 2005. The general Malaysian public would think that Proton was stupid and incapable of making good judgments while presenting their offers. That is a fair remark, given one completely ignores the realm of deal brokering. However, my hats are off to Proton for their remarkable ability to keep playing along with the German automobile firm. It was indeed an achievement for Malaysian thinkers to remain in a competitive psychoanalytical finance game with arguably the smartest race on earth. If you are puzzled as to why I am praising a firm which has failed to close a deal with its potential savior, it is a good sign- I have your undivided attention on this article.

I have always been interested in the studies of bounded rationality in economics. In laymen’s term it is about the behavioral patterns of two competing firms, how they will react strategically to maximize their benefits given that they consider the other firm’s move and at every movement there is definite rationalization of ideas. This was the “game” that Proton was beaten flat at by the established German firm. The tactical and strategic movements of Volkswagen were unpredictable, which sent mixed signals to the national carmaker’s management team. Misinterpretation of information is very costly in international business, which involves immense risks. This is as Joseph E. Stiglitz rightly pointed out- is the product of globalization. Proton miscalculated the risks on both sides and assumed that Volkswagen had written off their initial plan to set up its strategic base and production plant in Indonesia due to factors such as geographical stability. However, the charm of investing in our neighboring traditional economic rival is that the market is under-regulated for international firms excluding Malaysian businesses. This is what historians would identify as Javacentric ideology, the thought of Java as the natural leader of Nusantara and hence the notion that it should remain better than the rest of the cluster Malay islands. Indonesia will never accept Malaysia’s economic leadership in this region which the politicians believe strongly as violating Javacentric optimality position, evident in their eleventh hour hijacking of the proposed merger of PNB’s plantation businesses late last year. Simplifying the situation, Indonesia made a better offer to Volkswagen, which includes a lower tax rate- guaranteeing cost minimization for the German firm hence meeting its primary objective of global expansion. Proton clueless about the ruthlessness of our neighboring economic rival was left to face a bleak future alone, as Volkswagen ended their strategic business game by a full withdrawal. It was like a hard slam on the door for Proton as their German counterpart did not drop any analytical hint of disinterest. One painful chapter in Proton’s short history, but it has to be tightly shut as life has to go on. This reminds me of the famous quote “I can’t go on. I’ll go on,” by my personal favorite contemporary playwright, Samuel Beckett. Can our national carmaker turn over its business fortunes?

It is not surprising why there is little faith in a Proton turn over, it has been promised before but not delivered. This is practically revisiting the MAS dilemma in 2005. Efforts for turnover will be dampened as the share market has been hostile towards Proton upon receiving the news of the deal breakdown by slashing its share value by 19 percent, to its lowest price in seven years, standing at RM 4.80 per unit. It is predicted that the price will be floating around the range of RM 4.50 to RM 5.00 until the share market breaks for Christmas. The lowering share value will lessen the treasure chest which Proton needs very much at this point to expand. Why expansion when finances are unstable? The fundamental problem with Proton is the failure to reach the economies of scale. With the introduction of AFTA, Proton witnessed its monopoly power over the domestic market-the only market it is surviving in, sliced by half, to 30 percent in 2006. Today, it stands at only 25.5 percent. There is insufficient demand to supply cars at the competitive prices, with lower costs. That was why Proton wanted badly to tie up with Volkswagen, as the German firm will provide Proton with a springboard to dive into the Euro car market. Proton wanted to infiltrate the Eastern European market in particular, which it has potentials to be a competitive automobile firm. The deal collapsing is an opportunity loss for Proton, a big one. Nevertheless, Proton must expand for its strategic benefits, and its tactic for the time being is to abandon the profit and loss sheets. Financial stability is secondary now and all efforts must be directed towards expanding the firm. With liabilities for the financial year ending March 2007 standing at nearly RM 1.5 billion, can Proton continue expanding?

In my opinion, it can continue chartering its expansion path, but it has to do so within a stipulated framework. There must be a realistic time frame of expansion, say for instance three years. Defining the timeframe has been the main problem for the Proton management. There is an ongoing argument between the management and the major shareholders on the timeframe of the business turnover plan. Official losses reported for this year is a staggering RM 550 million, and if this is taken as the average, Proton has less than five years to survive, on basic accounting principles. It is losing RM 1.5 million on a daily basis and given other things remain constant, five years is the expected date of demise for Proton. Ironically, despite being in the red for the last three financial years, Proton remains an asset rich firm. It has its current and fixed assets portfolios in good shape. This is the reason it is able to expand. The monopoly power for twenty years was fully utilized in accruing assets for rainy days. However, the amount of assets could not be stretched beyond another five years, which is discounting inflation. All in all, Proton has a good ten years of life. Its priority now is tackling the South East Asian market and the Middle East. The launch of Pesona which was well received in the domestic market, will improve the firm’s financial standing. Furthermore, the reported production of “halal” cars- extreme labeling I guess, will be appealing to the Iranians and other Middle Eastern countries. Proton is taking it one step at a time now, surviving in the wilderness on its own. Why on its own?

After Khazanah consolidated the position as the major shareholder of Proton from Petronas, it has been trying to assume more control over the national car maker. This led to an internal rift which witnessed the departure of Proton’s long time leader, former CEO, Tengku Mahaleel. An autonomous Proton is a better Proton, wouldn’t you agree? As we speak, the current CEO is having a tough time dealing with the turnover plan as it has to be authorized by Khazanah. The assurance from the Second Finance Minister that the management team will be given “time” to sort its own house out has an underlying political tone. The government will not bail Proton out anymore. The EPF was the last contributor to Proton funds by acquiring 830 000 shares of Proton in January 2007, and I can assure you, the national carmaker will not receive further assistance from the government. This is primarily because Khazanah is tied down managing all the economic regions launched by the government at various stages in 2007. Khazanah will not make further capital available for Proton, as it believes the economic regions have better potentials of reaping higher returns for the investment arm. It leaves Proton to fend for itself. Is Proton that unimportant in Malaysian economy? Well, the government views that since Proton does not bring in tax revenues for the country, it should not be given priority. Well, this is untrue. Proton provides 10300 job opportunities to the economy, with a further 5000 dealers nationwide. If Proton is allowed to fall flat on its feet, how is the government going to ensure that the mouths of these employees and their dependents are well fed? Proton has come to the point that it has to expand or face the possibilities of shut down within the next decade. If MAS sold their headquarters, what can Proton sell? Nothing, because they need all they have now to efficiently produce. Proton needs to find the market. And they have to find it fast.

In a nutshell, Proton’s future is not as bleak as many believe. There is still a ray of hope for Proton to successfully turn around its business and prove the analysts wrong. Product differentiation and management autonomy are two key issues which have to be addressed before Proton goes on the expansion path. The government must not abandon Proton at this juncture as it is the point where Proton could simply make or break. However, the government itself is facing financial difficulties due increasing fuel subsidies in the world where price per barrel is nearing USD 100. Moreover, the commitment towards building the economic regions further aggravates the government’s financial position. Nonetheless, one could never dismiss the notion that there is an equivocal agenda by certain political powers to drown Proton now, and drive its share prices down, setting the scene for a perfect takeover of the asset rich firm. Is there an attempt to politically take over Proton? Think and you might just find the missing link.

it gets nasty at the HINDRAF rally

Look at our Indian brethren, battling the authorities to voice their rights, but do you absolutely agree with their plights?

Watch it here for the police reactions and news reports from al-jazeera on Sunday's HINDRAF RALLY.
http://www.youtube.com/watch?v=m96FCTKHNA8
it gets nasty, with more teargas and water canon fired at the protesters, democracy humbled by the authorities.

HINDRAF rally..

Well, the political scene in Malaysia is going through one of the roughest patches in history and worryingly this time it is not about the rise and fall of political leaders but it is the most sensitive issue- race relations. HINDRAF will take it to the streets on Sunday to hand in their petition claiming for 4 trillion from the British government for bringing their ancestors here which results in many living in poverty. Well, the underlying reason behind this rally is that the Indians have just had enough. They have been the most bullied and compromised race in the country. Demolitions of temples, insult on their jobs by the country's leadership and the most recent being hosting an assembly of the most important political party in Malaysia -UMNO on Deepavali. The last one found the boiling point of many Indians. The constitution has gazetted a public holiday to be observed on important religious and racial festivities, as a mark of respect to the event and the community involved, only to be ignored by those who walk in the corridors of power. Pathetic to say the least of these arrogant hypocrites. How much more the Indians are willing to tolerate?

Although the claim by HINDRAF might sound like a joke involving the British monarch and government, but they are DEAD serious about the message. Malaysia is for all the races and not only for the Malays. Although some of the claims are extreme but only in extremeties, can WE find the average solutions. These protests starting from the Batu Buruk incident are testimonials to the weakness of the Abdullah's leadership. History has taught us that oppositions must be crushed- that is the symplistic notion of Machiavellian politics. It has to be applied to a country such as Malaysia which has loose racial ties and fake unity and harmony. As i've said earlier in my previous post, we are a state in stable tension, only with the assumption that the leader of the day is strong. But with Pak LAH at the helm, political stability in this country will be rocked and this my friends is a bad news to our economic performance. Foreign investors will definitely shy away after back to back street protests which actually are open challenges to Abdullah's government. Now, the rest of the world will be laughing at us. Thank you, Abdullah.

Back to the HINDRAF rally, although I do not support all their plights but some are true. I have seen them with my own two eyes in estates like Kerling. They live in poverty. Yet again, HINDRAF i s stirring racial sentiments, they are only speaking for one race. What about the Chinese and Malays living in poverty as well? Who are championing their plights? HINDRAF is different from BERSIH in the sense that the former is fighting for common interest of the public the latter is not. Whatever it is HINDRAF is gathering momentum, with many Indians especially teachers are at the forefront of the fight against racial injustice. This is a big problem Abdullah, you must stop avoiding the problems, come back and solve it. After all, you were in MAGERAN back in 1969, you should know what to do. If Mahathir was PM, another OPS LALANG would be in place-which I believe is a correct approach, although I know it is a violation of human rights. But racial tension is a national threat, threat to the very existence of this country, and draconian laws need to be put in place to address it. Just like in economics, when the market forces fail to clear, you use other tools like taxation to correct the problem. It is harsh but needed.
Having said that, OPS LALANG should only be the starting point, but serious discussions are needed to solve racial inequalities in Malaysia, and Abdullah needs to be firm in his executions. Or else, back off, just like how Tunku conceded to Razak, it will be the replay of that, Abdullah to Najib Razak.Abdullah has failed us yet again,his weakness has allowed others to take advantage and voice their dissatisfactions in public! And the publicised arrest of the HINDRAF leaders will be an act of political martrydom of these lawyers, which will raise public anger and pose serious threats to the country's stabiliy! And do not get me wrong, I like Abdullah's personality but i'm just tired of it and feel he is not up for the job and never was honestly! It is my hope that he retires gracefully with his dignity and respect intact.

Lingam Saga-Royal commission a posibility?

Well, according to Rais Yatim, the keKKWA(culture, arts and heritage) minister, the government is considering to set up a government comission to probe further on the VK Lingam tape saga. Well, that is only his view as he stressed, not the uninamous decision of other members of the panel which have been set up to look into this matter. The rest are cabinet member, Radzi Ahmad and the de-facto law minister, Mr Minority Nazri Aziz(the funniest guy in politics since mat sabu of Pas), former Chief Judge Tan Sri Haidar and one time politician now activist, Lee Lam Thye. Well, what do you think? Abdullah will actually enquire?

He might announce a setting up of a five men royal comission, which will be chaired by Tan Sri Haidar, i think, and all the panel members will be in it. The comission will try to look as though they are doing work- at least Lee and Haidar would, and the conclusions are only to be countered by the three other ministers. Radzi is bound to support Abdullah, as his political life is hanging on the thread. There are talks in the northern UMNO circles that he will not be fielded for the upcoming general elections,and these rumours as usual are self-fulfilling prophecies. Radzi is old, and has not been doing a good job in defending UMNO in public- well others have been doing his job, like Nazri and Zam, so Radzi,you can take a break from being SG of UMNO! Nazri as always, will never challenge his leader of the day. He would die to protect Pak Lah while he is in office. A loyal minister indeed! Rais's position remains equivocal. He is one of the most interesting man to watch. He might just be the link to overturn the commission's concluding results if he wants to retire from politics, but if he wants to stay, at least in Pak Lah's cabinet, then just agree with the predetermined result. The conclusion will suggest that the tape is not clear, or could be fabricated, and the former CJ, Fairuz was not involved. As aresult, Fairuz is a clean man, and will be appointed as the next Penang Governor! A fairy tale ending=)

UMNO, Malay, Malaysian, Malaysia

Same old, same old. Nothing is new at this year's UMNO general assembly, not yet perhaps. Unless Abdullah steps down, which will be bizarre but unlikely to happen. Shouts of denial that UMNO is a racist party is again echoed throughout the hall-this year,most prominently by the PM's son in law and the Youth wing deputy chief-KJ. Well, it is such a disgrace that Oxford has produced such PPE graduate who does not know the depth of his own political party.Beyond any reasonable doubt that UMNO is racist, it is a racial based party-the one which champions NEP- a racial discriminatory policy. Therefore, in other words, by default it is a racist party with reference to the top guns of UMNO who admits that the party is only looking after the interest of the Malay community and not instilling prejudice against other races. Well, if it is confining itself just to one race and championing the plight of that one race, it is only making that particular community better off and worse still the improvement is at the expense of the other races. Yes, economically,Pareto optimality conditions are fulfilled here, the races are efficient, but isn't what UMNO is doing, a racist act? You be the judge.

Well, as much as I am all for Onn Jaafar's "a century too early ideals" of opening UMNO up to other races, as long as the people want racial politics-then let them have racial based politics. It is what we call democracy! But, UMNO must look ahead of the present day, it needs to be more than a party for the Malays, if it is to remain relevant in the future. How much longer can they claim to be the champion of Malay interests? With current disgruntles from within and outside the party, UMNO has to be bold in changing its setup. It cannot keep asking its members to "shut up"and toe with the party line, it has to stop being bold in defending the present, instead it must be bold in facing changes! As the body with the ultimate say in Malaysian politics, it has to make the move first- a mind shift towards a more Malaysian party. The BN coalition should be dissolved and replaced by Parti Nasional where Malays would be the dominant leader by choice and not by the dafault setting of the party! This is similiar to Onn Jaafar's idea in the early 50's, an idea shot immediately at its infancy by the Malays then. UMNO has to stop masking its weaknesses and work effectively in improving them. The only reason UMNO would not dare to take this challenge is because it knows it will end up being a secondary party, and then the "Malay fate" as they argued, would be jeopardised.Why? Malay by nature is a weak race-this is something which hasn't changed since the days of the Melaka Sultanate. I am a Malay, and proud to be one.But, I am a Malay who is willing to accept my weakness and work for the better! History has taught us that Malays are easily tamed by worldly pleasures, Melaka Sultans and their concubines, Ngah Ibrahim with his mining rights which he sold to the Chinese, we are easily manipulated by others! Furthermore, there is always envy in the Malay society-an anthropological illness which traces its origins from the days of Parameswara. " Selagi hasad dengki tertanam di sanubari, Melayu tidak akan dijulang tinggi." These very words forms my political philosophy. If Malays could absolve itself from envy, and the ease of giving into worldly pleasures, we would be the rightful leaders of this country. And this is what I look to embark on when I surrender myself to the public later on in life. This is what I want to fight for- be it in UMNO or other parties which provide me the space to voice my idea. Bangunlah bangsaku, Malaysia bermula dengan mu!

The demise of Malaysian judiciary

Please observe a moment of silence. The Malaysian judiciary is as good as dead. The departure of controversial magnet, Tun Ahmad Fairuz, the former Chief Justice (CJ), marks not the end of a humiliating period in the proud history of the country's judicial system-worse still, it is just reaching the climax.Tun Fairuz's first few years in office was as good as it could get. Slow and not academically assertive, he blended well with the rest of Abdullah's administration. Well, the graph could not just be horizontal forever, it has to have slopes and curves which is the exact extension path the former CJ took. He started going all wrong, from not so academically sound law lectures, to the issues of scandalous and corrupted judges, to his own VK lingam saga, the BAR council resistance, and the appointment of questionable legal practicioners to the board of judges. Gloomy indeed. When one tempered with fate, this is what one gets. If you are not meant to be in a position of power, only trouble awaits you. That is the law of the jungle- the kind of law which is Malaysia's 50th Merdeka version of the Rule of Law follows. Well, let us not reminisce the yesteryears, and look at the bleak future ahead. What do we expect from the judiciary? Surely, we can't expect the shit of two decades to be undone in two years! However, the appointment of a new CJ is the first step in repairing the damages. Let's face it, UMNO will try and promote Zaki Tun Azmi as their candidate, and trust me even if he is not chosen as CJ now, he will be appointed as the Appeal Court president sooner or later- the exact position UMNO leaders would want. With prominent cases looking to reach the appeal court in the couple of years, namely Altantuya murder trial, Anwar's commercial law suits- it would be handy to have the president of the appeals court in UMNO's bag! As for the new CJ, he will just be a temporary case, and Malaysian will not even remember his name because his predecessor has been soaked in the glamorous heat!

General Elections at year end?

"KLCI hit an all time high" exclaims the front page of New Straits Times,Monday 29th Oct o7Another of "Malaysia's once best selling paper's" unworthy headline. Isn't it obvious? Well if you are still puzzled by my skeptical view of Malaysia's "brilliant economic performance," it is probably because you actually believed the news reported by NST press. Of late, NST is becoming less relevant to the Malaysian public. It has replaced Utusan Malaysia as the unofficial mouthpiece of the government. Frankly, I am delighted by Utusan's current boldness, especially in the forum section of its Sundays circulation. Well done to its group of editors. I found myself choosing Utusan over NST on weekends, just to highlight my utter disgust at my once favourite newspaper! Well, enough said about the state of Malaysian press, let us now focus on the main issue-the economic state and possibilities of general elections before we say goodbye to 2007?

The KLCI could reach 5000 points beating CAC 40 and FTSE for all I care, but does it actually reflect Malaysia's economic health? The answer is both yes and no. It is an indicator of economic strength as argued by monetarists, but many agree that it is weak and less reliable. As we know, an economy is measured by its total gross domestic product (GDP) and its strength is reflected by the progress of the GDP on a yearly basis, or simply put as growth. The share market reflects a proportion of the GDP, hence it is not accurate to draw assumptions that the economy is strong, judging solely on its share market performance. Nonetheless, it is the simplest indicator and Malaysian politicians' favourite statistic to quote.

In my opinion, the only reason this issue won the right to be the cover story of the credibility damaged press is because it is an order to hype it up by the Prime Minister and his cabinet members. Why? Purely political- the general elections. Report has it that the Prime Minister, has decided on a date to dissolve parliament, and it is the 25th November. What fueled this speculation is UMNO's refusal to reschedhule its AGM, despite the meeting running over the Deepavali holiday. Furthermore, Samy Vellu who came in defence of UMNO's decision,voiced out that "it is near the end of the year", and the single most important political party in Malaysia hasn't hosted its general meeting yet. This hints that the general elections is just a whisk away because UMNO is rushing to put its house in order and its campaign machinery at full swing before year end. In no way the general elections could be called before UMNO's internal spring cleaning and image strengthening ( more of keris waving fiasco) at the AGM. Therefore, the "feel good" economic factor needs to be generated throughout November, and quoting a credible source, government servants are due to receive "special bonus" at year end, which is as good as confirming the date of the elections before 2007 runs out.

Well, why the end of the year? Why not just wait for 2008, at least it will be a solid 4 years of Abdullah's first term as elected PM. 45 months into a government is an immature time to call for yet another general elections, but if Abdullah is to continue his leadership and Khairy Jamaluddin is to realise his ambitions of being PM by 40, the nation has to take to the polls very soon. In fact, from my political observation, the end of the year is the best time to hold the elections if BN is to maintain an above 80percent control of the Dewan Rakyat. There are at least three cases which would damage BN's credibility and affect its performance if the elections are schedhuled for the end of first half of 2008 and above.

Firstly, is the Altantuya murder trial. Although this case has received less attention of late, but its outcome is much feared by UMNO's top guns. The Altantuya murder case will not only affect Najib Razak whom is said to have his hands in all the mess, but it could rip down the whole credibility of Abdullah's administration in particular. Abdullah could not claim to be Mr. Clean anymore because he decided to keep Najib in the cabinet and not seek an independent commission to investigate the claim of Najib's involvement further. Like it or not, Najib is the winner of this political game. He did not just escape the whole conflict tangibly unscathed but had made valuable political gains. Najib has tied Abdullah into this whole fiasco, and brought with him UMNO's already smeared reputation. Therefore, if the parliament is dissolved in the next opportunity which is March 2008, the case will have gotten deep enough to involve big names and ruin BN's campaign. Strangely, no opposition leader has capitalised on the fact that Razak Baginda, one of the accused is an UMNO member, although not a high ranking office bearer, is a prominent behind the scene man of the party.This gives the idea that the opossition parties in Malaysia are only interested in badmouthing big names, and not seriously finding the weak points in the government's arguments. Only when the opposition is able to take advantage of such situation will they then be fully relevant to all Malaysians- including me! I will wait for the day that the Malaysian opposition parties be a formidable force- so to give a good option to the people of this country, who will then in turn make their preference heard.

Secondly, is the issue of Anwar Ibrahim's candidacy. By April 2008, Anwar would be free to run for any public post in Malaysia and the odds are on him to return as an MP. Would Pak Lah allow this to happen? Even the grand old master of Malaysian politics, Dr M, did not tempt his fate against Anwar. Many UMNO members are underwriting the ex-DPM off as an " impotent threat" based on the by-election defeat in Ijok of PKR's candidate, Khalid Ibrahim- in which is Anwar first active campaigning since his arrest in 1998. UMNO big guns are dismissing Anwar mania. But, this is just the first round, and it was not a PKR-UMNO showdown. Had it been, the Malays in Ijok would swing their votes in favour of PKR at least by 30 percent, which would made it harder for BN to retain the seat. Therefore, Abdullah has to carefully bar Anwar's entry by defining the election parameters in his own interest. That is the Prime Minister's special power and he is most likely to take the option. Mr Clean has never been brave throughout his political carreer, "elegant silence" is better interpreted as "dignified cowardice."

The third factor is the internal BN harmony. MCA is not very stable these days. 2008 will be the year of party elections and it could see incumbent being challenged by the amitious uprising politicians. This is coming at a time when MCA is at an all time low with the Chinese voters due to the economic and security issues. MIC is hurt, by the lack of Indian allocation in the new general elections, and PPP is deeply hurt by Ali Rustam's remark. These internal problems, if stretched longer will not heal but it will lead to major cracks. UMNO has to single handedly fight in marginal constituents if say for instance the elections is in the second half of 2008. With PKR gaining momentum and PAS better prepared in Kelantan, BN might just resort to dirtier tactics in the coming elections. After all, 2004 was the dirtiest elections in history of the country, why not give the 50th celebrations of Merdeka a bigger meaning with even dirtier next general elections.

In conclusion, the end of the year is the best time for BN to hold an elections. Catching the opposition fully offguard is not fun to watch, but semi-offguard? It will be intense. Being an UMNO supporter all along, I am interested to see the lobbying for state powers, which I will write later! Till then....

Developing a united Malaysian nation

Fifty years of independence, thirteen kings, five prime ministers, three economic recessions and still Malaysia is one strong nation. The success of Malaysia in establishing a nation is commendable due to the multiracial composition of its society. Different races have different languages cultures, traditions and values. The word “different” itself is by far the biggest challenge facing the country which promotes unity in diversity in maintaining stability and harmony. Many have argued, notably *Shamsul Amri Baharuddin that Malaysia is a state in stable tension. There is superficial stability and harmony with warmness demonstrated only on the surface, but deep down turbulence is waiting to be unleashed in a repeat of May 13^TH racial backlash of 1969. Therefore, there are three major ways in developing a united Malaysian nation in the long run which are the implementation of Malaysianisation policy, revamping of the national education system and fine tuning of the national economy.

Malaysianisation is the fundamental concept which provides a strong foundation in developing a united Malaysian nation. The target group for the policy must be divided into three. The first is the current workforce,secondly school students-the future workforce and the main target group which will be dealt by education and lastly the elders above sixty years old. One nation, one identity was initiated by *Otto Van Bismarck when he united Germany single-handedly in 1871 under the leadership of Prussia. Malaysianisation adopting from Bismarck’s Prussinisation simply means creating purely Malaysian hearts and minds with a great sense of belonging to the country. The primary step is accepting that there are racial problems in Malaysia which are aimed at the current workforce and the elders. The government must allow three months of public display of grievances in newspapers and forums regarding the issue. Ideas must be gathered and solution sought at the end of the period and no one is allowed to speak ill of racial interactions anymore from that point onwards. The next step is to start addressing the first challenge of Vision 2020 which is establishing a united Malaysian nation with a sense of common and shared destiny, not just as a state of mind. The sense needs to be cultivated in every heart and mind of Malaysians. The concept of Malaysian first, race second should be enlivened in every facet of the society. As long as the concept is rejected, the dream of developing a truly united Malaysia will never materialize. Furthermore, *politicians especially from the ruling coalition should stop playing the racial cards to gain support from the public. Political maturity needs to exist and political parties should move into a multiracial build and not a coalition like the Barisan Nasional (BN) - the perfect example of peaceful co-existence of races far from unity! Malaysianisation must be a continuous and collective policy, implemented on everyone without exception. The main mistake of yesteryears was that the BN government targeted only those within the public service; instead they must include the private sector. For instance, all the companies including multinationals must sing the national anthem and raise the flag daily. *The Rukunegara must also be appreciated and recited regularly as a reminder to everyone that the five principles ensure stability and harmony within the country. It must act as the guidance to all Malaysians due to its neutral nature; unlike the Constitution which some claimed to be discriminatory. The Malaysianisation policy must also be bold in the use of languages. The national language must be maintained as Bahasa Melayu followed by English. Bilingualism must be promoted widely, and the use of other languages must not be encouraged. Fifty years have been allowed for the other languages to be used and the opportunity cost is huge- the widening of racial segregation. Moreover, the government must allow reading materials to be printed only in the two languages including newspapers. This is in support of *Ye Lin-Sheng’s idea in The Chinese Dilemma, “as long as we have Chinese reading Chinese newspapers and the Indians reading their Tamil dailies, we will get nowhere in uniting Malaysia because every race will be confined to their way of thinking only”. Malaysianisation must be an active and incessant policy aimed at creating truly Malaysian hearts and minds whereby the people love the country beyond words.

The second approach is revamping the national education system. Education is the easiest way to reach the masses especially the young minds, the largest target group which has the biggest potential of success. The primary step is to abolish all other form of streams and support only the national schools and national secondary schools similar to the vision school idea. National Laureate Dr. Syed Othman Syed Omar even suggested that all the streams should be integrated nationwide from primary schools to universities. The medium of communication will only be Bahasa Melayu and English, while students need to choose a compulsory third language which is either Mandarin or Tamil. If implemented successfully in a decade, young Malaysians will be multilingual with at least sound knowledge in three languages. This will not just enhance interracial understanding but boost the value of every human capital produced by Malaysia and indirectly increases the competitiveness of our workforce globally. However, the main problem according to *Dr. Wee Ka Siong is the inability of the school administrators to encourage healthy racial interaction among students. Thus, government intervention at its maximum must take place. Firstly, the appointment of head teachers must be solely based on merits. The head teachers then should study their schools racial interaction patterns and come out with an immediate solution. Action must be taken for instance in making sure that Malay and Chinese students sit together. Furthermore, other languages apart from the two must be totally disallowed besides the particular lesson hours. *Tan Sri Murad Mohammed Noor of the Murad Report said in an interview recently, “As a teacher who imparts knowledge, teach them how to contribute towards the nation and how to respect the multi racial aspect of our country.” Teachers must promote the idea that a united Malaysian nation benefits everyone if it is materialized. Moreover, the cabinet must only concentrate on making policies while the implementation must exclusively be executed by the Education Ministry and state-level departments. In addition, the education syllabus needs to be revised with phrases such as “racial toleration” deleted and replaced by accurate phrases such as racial integration with constant use of Malaysian nation instead of naming the races. If the Malaysianisation policy in education is executed brilliantly, given the time which is in abundance, a united Malaysian nation will be developed in less than two decades.

Finally, the money matters. The Malaysian economy needs a major shift if it is to allow the development of a united Malaysian nation. Hence, the number eight challenge of Vision 2020 which involves securing an economically just society must be tackled reasonably. This means a fair and equitable distribution of the nation’s wealth as well as full partnership in economic progress. An economically just society cannot emerge as long as there is a perceptible identification of economic backwardness in race. *Ungku Aziz, a renowned Malaysian academia, argues that positive discrimination must be allowed to set up a level playing field in the initial stages as outlined by the New Economic Policy (NEP) of 1970. The main problem is, with positive discrimination there is no initiative for individual improvement. Thus, the government should set a bold target, for instance having an agreed period of fifty years only for positive discrimination. All the races should be equally discriminated, for example quota of non-Bumiputera civil servants need to be increased in return for a bigger share to the bumiputera in the trade of quarry. Everyone has to sacrifice and move out of their comfort zones in creating a truly dynamic and just economy. *Once the period ends, competition needs to be encouraged as it is the key to economic prosperity. Furthermore, decentralization of the economy must take place as soon as possible and the Malaysian Incorporated policy must be championed yet again. Recently the government has reversed the policy in favour of economic power accumulation by the Government Link Companies (GLC). This is an unhealthy trend because in the wake of globalization, economic freedom, a concept advocated by *Amartya Sen must be granted to the nation. Private sectors need to spearhead the economic advancement of the nation, not the government through the GLC. This will minimize corruption and red-tape. Furthermore, the government must aid the Small and Medium Enterprises (SME) to the maximum because we need to create a larger middle class, an effort which has been keenly blocked by Abdullah and his son-in law, KJ. Just take a look at Malay settlements around KL. They are worse off than when they started some 30 years ago. All thanks to Norza, the I can do it all UMNO Youth exco member. Everyone knows, the larger middle income group grows the better. It is because the higher and lower income earners will be suppressed, hence minimizing the chances of racial dissatisfaction created by large income gaps. Moreover, the level of income for Malaysians needs to be increased. This is to put an end to the brain drain problem where our competent workforce leaves the country in pursuit of greater returns in other economies. If the workforce is maintained and fully utilized, a dynamic open economy will be established which will then guarantee a larger flow of foreign direct investment. As a result a larger and richer economic pie will be created, hence sufficient to satisfy every single Malaysian and in the long run fasten the healthy development of a united Malaysian nation.

In a nutshell, the development of a united Malaysian nation is promising only if all parties are willing to lose and win some. The late *John Kenneth Galbraith, an economist was very much against the idea of a win-win situation as he believes it could never exist due to the existence of opportunity cost. Therefore, Malaysians need to be ready to make sacrifices to realize the dreams of being a united nation. If fifty years back the British were the enemies, today, we, ourselves are the enemies of the state. Our inaction will be the cause of a slow but sure destruction. *Stiglitz summarizes globalization perfectly as the epitome of Darwin’s survival of the fittest. If Malaysia is superficially united but in reality divided, it will not be fit enough to stand up against the currents of globalization. Therefore the government should consider the launch of the Malaysianisation policy seriously and immediately. We are at the mark where we can either make or break easily. After all, the subject you love most is indubitably the hardest to love.

market price

oil prices touched an all-time high of $92 a barrel as the dollar slumped against other major currencies and fears grew for the health of the world economy.Crude futures hit the record level in New York, before dropping slightly to $91.10 a barrel, amid concerns about growing tension between the US and Iran, and a lack of US stockpiles.London's Brent crude rose 87 cents to $88.35, having hit an all-time peak of $89.30 in early trading.

Traders said that with the oil price having risen by $30 in the past year there was little preventing it hitting the talismanic $100 figure. "Now that oil is in the 90s, it is much easier to reach 100 dollars. Anything can happen in this market," said Astmax fund manager Tetsumari.

The commodity's increase came as the dollar dropped in value again, with markets increasingly expecting the Federal Reserve to cut US interest rates again due to the country's severe housing slump. It left the pound a quarter of a cent higher against the greenback at $2.0523 – a three-month high. Remarkably, given its increase against the dollar, the pound was weaker overall on the day, since a number of economists expect the Bank of England to follow the Fed's lead in the coming weeks and cut UK borrowing costs.

In early European trade, the euro struck 1.4375 dollars – the highest level since the single currency's creation in 1999.

Motoring organisations warned that petrol prices would soon increase. The spike in oil prices is largely due to the situation in Iran, which this week became the subject of further sanctions from the US due to fears that it is trying to develop nuclear weapons.

Traders are also concerned about Turkey's plans to launch military strikes against rebel Kurd bases in northern Iraq.

To add to the tension, the US Energy Information Administration said this week that stockpiles of crude had plunged by 5.3m barrels last week. The market had been expecting an increase.

oxbridge interviews- demoralised, better not be!

Oxbridge interviews for international students could be a nigthmare to some applicants. Here, your thoughts and ideas, are just ripped apart, swallowed rare before your eyes by larger than life, know it all interviewers. Being Asians especially, demure and well-mannered as they are, this interview session could eventually lead to watery eyes. It is a challenge. The interviewers want you to challenge their academic authority. If you are up for a game then, play along. But, you need to realise that your knowledge could not rival the interviewer, at least not yet. You need to know who you are, where you stand. In an interview room, you are a student and the interviewer is the tutor. Never pretend to be who you are not. Interviewers having accumulated years of experience in their bags, know, when the applicants are being pretencious. Rule of thumb for an Oxbridge interview is never to tempt your interviewer to go into his or her research interest, unless you are well prepared. That was what I did. But for my case, I reserved it to the end of the interview where i knew i have managed to charm her, and drop the question, in which she failed to answer.She was impressed, and yes, it was a she. Gender bias you might say.Nonetheless, just admit if you cannot answer the questions, the interviewer will guide you, step by step. However, at the end of the day, interviews are not the most important aspect of your application. It is the written examinations. As much as they love you during interviews, and the coherence of your argument and the quality of your speech presented on that day, without worked proof, you are not going to be accepted! In my case, I had to sit for the History Admissions Test (HAT) and the economics written test. Only when i reached Pembroke that i knew the importance of these tests, and from my tutors i learned that i aced both of them! bravo!! Up to then, i thought it was my charm which sealed the deal, but apparently it was my brains! Therefore, there is nothing to worry if you had failed to shine during interviews, as long as you did not make a complete utterly disgusting fool of yourself, you still more or less have a chance to be accepted. For medical students, the BMAT holds the key to Oxbridge, but for lawyers, LNAT (but Oxford law apparently does not rely on LNAT results)! Thus, if you think you have failed the first hurdle, pick yourself up, recompose and give it another try in the written exams. Remember, the interview sessions is just a tiny dosage of your tutorials. The tutorials at Oxbridge are daunting and extremely stressful! So, if you could not survive the acid test, better think twice before tempting to go further with the applications!

Oxbridge Education- the "worth every penny "system

Oxbridge interviews, the season is back. Well, for international students outside EU that is. It is the time of the year when you just have to be "kiasu"! Kiasu a word which traces its origins in an overpopulated island country south of Malaysia, is a must during interviews. Your friends are your opponents, if they are better off, then you are worse off. It has fulfilled the conditions of Pareto optimality, it is now the Darwinian's survival of the fittest. It is a chance of a life time, proving yourself worthy to be in such elite institutions. But,Why do people want an Oxbridge education? It is not even in London, the city of sinners. Oxford and Cambridge are both less vibrant cities compared to the British metropolitan(although Oxford is much better than the other side). Hello, and its wi-fi system is so back dated, that my hometown Ipoh has better facilities!Thus, it is better to attend one of the big four London unis (LSE,Kings, Imperial, UCL), as they are located in such great modern city.If you are considering brand names, these four institutions are renowned throughout the world, even cooler than Oxford or Cambridge. One might argue, that the reason to choose Oxbridge over the rest is because, the marketability of the degrees. At least that was what I thought. And surprisingly, it is true. It is not because of the brand name of these institutions but it is the value of the education. Undoubtedly, an Oxbridge degree costs a bomb, it could be up to 60 pc more than other UK uni's fees for non-UK/EU students, but it is worth every penny. As you might have already known, Oxbridge both are based on the collegiate system. Thus, each college has its own strength, character and field specialty. I am fortunate enough to be in a college where it is medium sized, closed knitted and has arguably the best economics department in Oxford. In a college like Pembroke and other Oxbridge colleges, you get value for money education. We have 8 learning weeks in a term, and there are three terms in a year. I was shocked to be told on the first day that all students are expected to put in 40 hours a day of work during the weekdays. I thought my master was joking and just being a prick on the first day of term. It turned out that, it goes without saying, and that the system works by default. The education system is well designed to make you work a solid eight hours on normal days. It is your introduction to working life. It is like sitting for a class of Career 101!The lectures are just above average ( I have crashed into a lecture at King's which i found to be more interesting), but the teaching done at college is excellent. It is simply the best. The class work makes the students think on their feet, are forever feel inferior of their abilities. Your tutor or college lecturer will grill you in an intense 90-120 minutes on what you have read for the class. They make sure that the students are consistently studying, or not risk being humiliated in front of your peers. It is like a constant peer-review being conducted. And it is on a daily basis. If that is not intensive enough, the speed of teaching is just like a bullet train from Fukuoka to Tokyo. The tutors expect the students to read at least three chapters from three different books per class, and the pace that they are teaching is incredibly fast. However, one is not expected to comprehend everything. That is impossible. Students are only assessed after a six week break- the time used to fully understand what was taught during term time. A term in Oxford, is like two terms in other UK universities. And that is why it is worth every penny. Furthermore, Oxbridge are endowed with all the reading materials in the world. These are the unis where one can undergo a three year course without buying a single book. It is fantastic, every book is in abundance! The life one has here, will definitely enable their graduates from any discipline to get jobs anywhere in the world!It is why, considering its reassuringly expensive cost, the Oxbridge education is worth every drop of juice! Therefore, applicants must go on battle, to secure a seat in such august learning institutions. It is one point in life where kiasuism is endorsed and generally accepted! Fight for it, everyone has equal chance of getting in! Give it a try. It is indeed a different experience altogether. Plus you get to wear fancy dresses all year long! Gowns!!!! Good luck to the applicants and even if you could not get a place, it is worth the try! At least you would not live for the rest of your life feeling guilty, looking back asking-why didn't I apply?

Tory leading, Labour trailing, LibDem falling

Britain has ushered in a new, young and relevant opposition leader.This is the land that is obsessed with no white hair leaders. Age politics matters the most in Britain. If you look old like Ming Campbell, your critics confine you to a wheelchair, brushing away all your ideas and labeling you UNFIT for public duty. At least, that was what happened to Ming.Britain, an ancient nation state, needs young blood to run it. This is probably because the HM, herself is old, therefore, the people are always looking for the fresh, below 50 politicians to lead the country. In the newly released YouGov poll last night, Tory has for the first time since 1992 hit the 40 point mark, the crucial support threshold and precisely it has gone pass that mark by 1. This is a massive jump by at least 15 points since the summer- the last and only time Gordon Brown actually enjoyed a good political period this year. The Cameron effect is actually starting to materialize. This was a leader, who inherited a party which have lost three general elections in a row, re-packaged it and now is selling the product well. Party politics in Britain to say the least, is politics of "emulate the winning side" politics. It is not so much based on ideology, whether you are right or left winged. New Labour shifted far right to the middle, and Cameron Tory have shifted arguably far left to the mid point between centre and mid-left. Now,the conservatives have become more left than Labour itself. But, that is the winning formula. Blair-Brown knew this in 1994. Cameron, being a very bright PPE oxon, followed this path, and now he finds himself sitting very comfortably at the poll. Cancelling an autumn elections might not be the wisest move by Brown, he hasn't made any wise move to date, but it will certainly buy him more time. After the Blackpool conference, Labour knew it would suffer had an elections be called then. Many of his ministerial colleagues would not have survived the acid test. Alaistair Darling might have lost in his constituency, now as the opposition is campaigning hard for his seat. On the other hand,Cameron's approval rating is improving by the minute, by the day, alongside his shadow cabinet members.
The shadow chancellor is looking strong after his inheritance tax speech at the conference and William Hague looks better now as Cameron's follower.Brown will hope that God will save Labour now. Although the You Gov poll had still put Labour as winner if an election is held now but this is just because the electoral system does not favour the Conservatives, that's all. Popularity wise, Brown and Labour might just switch sides with Tories in the commons. Now, since the elections have been roughly schedhuled for 2009, Brown must repair the damage. He must be saved by the LibDem. A new, young and relevant Lib Dem leader needs to appear to win back the supporters whom have fled to Tories. Lib Dem is falling at a pace more rapid than throwing a tennis ball up in the air. With 14 percent showing on the YouGov poll, Britons must be wondering, why do we need a third party anyway? It will just be a vote splitter and never will make an impact. The underlying principle is, it provides choice and that is the basis of democracy. This democratic fundamental is the one badly needed by the premier at this juncture of his career. Brown needs LibDem more than ever in the next eighteen months. He needs a new partner in battling the conservative currents which is gaining momentum. If Brown is able to work things out with the new leader of Lib Dem than he could take a deep breath of relief. From that point, he could chart his elections campaign and retain Labour on the government side of the Commons. It might as well take a natural catastrophe to hit Britain which then would allow Brown to
form a government. If that does not appear, Brown has to work much harder to stay in Number 10.

Brown in Black

British PM Gordon Brown is in political darkness, a territory he has never traversed prior to his appointment as premier. He is caught in a catch 22 situation, a classic game. The European constitution reform is giving Brown a headache. Claiming to be a Euro-positive Labour MP, he contrastingly has never proven his virtue, not even once in his political career. But, it is never late to start, especially when you are a leader of one of the most powerful governments in the world- Her Majesty's government. That is why now, he is trying to prove himself worthy of European support, interestingly at the time when he has not consolidated his full authority and political power at home. Ironically, he is perhaps one of the most Euroskeptic and hostile members of the British high office since Neville Chamberlain. His economic lectures to European finance ministers during a conference in Brussels, is just one of the examples of this Scotsman's arrogance. Having said that, in last week's PMQ time, he re-iterated that this issue as minute as it is just an "amendment to the European constitution" and not a reform. Perhaps, having appointed a young and naive foreign secretary in the name of David Miliband- known for his Europhilic nature and lack of diplomatic experience, is after all a wrong move by Brown. Miliband, being a young rising star of Labour, perhaps a successor to Brown one day, is too naive to read the writings behind the wall. His career has been centred much on domestic issues and not the skills of international diplomacy.An amendment in Europe is merely a disguise for constitutional reform. The European Union is gaining strength by the day, despite a few hiccups a couple of years ago, again on constitutional issues. It's economic stability is cemented and the currency has bettered predictions made during its debut. This is the time when Brussels is not looking foolish and attempts to absorb as much power as it could from its member countries.
Thatcher famously said in her No, no,no speech in the Commons in 1987 that "we have given away much power to the community (now EU) and I think that is enough."Brown, an open admirer of the Iron Lady, has perhaps forgotten all this surrendering power to the Europe problem . Or probably, he does not know the treacherous water he is in. Denying a referendum on the EU constitutional issue is a U-turn from his maiden prime ministerial speech of I will listen to the British people. It is his first promise broken. His refusal for a referendum is primarily because he has no confidence in winning it. Had he campaigned for a yes, and loss, it would be political suicide. It shows the level of support the British are giving him. It would be another blow to know, that this is his only weakness compared to Blair. Tony Blair, to an extent has inculcated a modern form of cult of personality. Blair will go down in the history books as a first-tier prime minister-young when he took office and was well received until his Iraq blunders. Blair would have won the referendum in his first hundred days of office-Brown would and could not. Having calculated this, Brown and his team of advisers decided to pull the plug off a Euro referendum, and defied the general British appeal for a referendum. He might have lost some respect for this, but it was far less damaging from being defeated at the referendum. Politicians break promises and make new ones while campaigning. Brown is no different. Perhaps, the past should make way for the future, as said by the Opposition Leader, David Cameron. But what is the future for Britain? Tory is still too conservative for modern Britain. Like it or not, the British society is synonymous with New Labour. The tories know this and they are working hard to overcome such tragedy.There is no future with Cameron. He is an opportunist, and does not seem to offer fresh and genuine agenda. Brown on the other hand, has stayed in the cabinet for far too long. A new breed of Labour needs to emerge, just like how Blair and Brown refreshened the party in the early 1990s. But they need to scout for talents away from populist figures such as the Miliband brothers, there are other grassroot leaders that could be groomed for top office. Brown is certainly black these days, having achieved neither international supremacy nor domestic authority. After all, the public have not endorsed him as PM yet. No referendum and no Autumn elections. Both have eroded Brown's grip on the British people.Brown could go down as the unelected Prime Minister of Great Britain.

Rais Dilemma- September 07

Expectations met- Happy 50th Merdeka

Malaysia is known for grand parades among international tourists and the one last Friday definitely lived up to expectations. The fiftieth edition of the Merdeka Day Parade was indeed pompous, vibrant and extravagant to say the least. Well, 31st August had finally dawned upon Malaysia, marking its half a century of nationhood and guess what, lives,have to go on! Heartiest congratulations to Datuk Seri Utama Dr. Rais Yatim for heading the organising committee. The event was arguably his biggest contribution to the country. It was the job that had saved him from standing on the edge of UMNO's political cliffs. The PhD holder from King's College London, a supreme council member in Malaysia's biggest political party, is known to be a Mahathir supporter. Ironically, he was not one in the late 80's. Rais supported Razaleigh-Musa's Team B against Mahathir-Ghafar's Team A in the UMNO elections of 1987. This led to his expulsion from the cabinet and reclusion from centre-stage politics for twelve years. It was the boss he had betrayed, whom saved him from the political wilderness and gave him the kiss of political life. Well, Mahathir only brought Rais back into the limelight in 1999 mainly to streghten his grip on UMNO- undone after the controversial sacking of Anwar. Recently, Rais was made to pay for his support to the former premier. He was asked to bid for the Secretary General of the Commonwealth- with full backing from the cabinet. This is a clear showing of exit by his colleagues- the first casualty of Abdullah's administration. Najib Razak, the deputy premier led the chorus of praises sung for Rais and highlighted the qualities in the elderly minister which made him a good candidate for the post. However, having been a veteran politician, Rais was not to be shown the dignified exit-worse than Harun Idris's offer to be made an ambassador by Hussein Onn, he played his political cards correctly. Rais at first disguised his intention of accepting the offer-his answers when asked about it were vague. A suave politician indeed. Then he leaked it out to the media- and not to Abdullah who was very busy attending to pre-marital matters, that he declines the offer due to his tight schedhule as the Merdeka Celebrations organising committee chairman. The cabinet members were stunned, many taken offguard. Age is afterall wise, and in Malaysian politics it is indubitably true. Rais avoided his political assasination, but who is the next casualty? Abdullah (Khairy) is playing his political cards with a rush- hinting at the nearing general elections. Happy Merdeka to all Malaysians.