SABAH STANDOFF, invaders from the Philippines shoot dead!

At least 14 people have reportedly been killed, after Malaysian police ended a standoff with nearly 200 members of a Filipino Muslim group.

Malaysia’s Foreign Affairs Ministry says police launched an assault on a coastal village in the eastern Malaysian state of Sabah early on Friday morning.

The village of Lahad Datu had been occupied by a group led by Agbimuddin Kiram, a brother of the head of a Filipino Muslim royal clan. The group from the southern Philippines landed in the coastal village on February 9th, claiming the territory as their own.

They cited documents from the late 1800s to back up their claim. The owner of the house where Kiram stayed was killed, and the Filipino group was reportedly chased towards the sea.



Najib: All-out action will now be taken against the intruders

Datuk Seri Najib Tun Razak said he was saddened by the deaths in the shootout at Tanduo village in Lahad Datu, because there had been bloodshed despite the Government's attempts to prevent it.

Expressing his sadness over the deaths of two police commandos who were killed and the three who were injured, the Prime Minister said the group of Sulu gunmen had opened fire at the security forces.

He said that with the deadline for them to leave now over, all-out action would be taken against the intruders, who had caused the deaths of the policemen.

“I have given the full mandate to Inspector-General of Police Tan Sri Ismail Omar and Armed Forces Chief Tan Sri Zulkefli Mohd Zin to take whatever action is deemed necessary,” he told a press conference.

“They have been given full powers. It is up to them and the ground commanders can take action.

“There will be no compromise; either they surrender or face the consequences.”

Najib said security had been strengthened and the intruders totally surrounded, adding that vessels of the Royal Malaysian Navy were patrolling the sea to prevent them from escaping.

“What is important now is that whatever means must be used to cripple the group,” he added.

Najib said he had received reports that 12 people from the armed group were also killed in the exchange of fire.

Source: Asia News Network

Related post:

Filipinos’ Sulu militant group in Sabah must leave Malaysia today 

Filipinos’ Sulu militant group in Sabah must leave Malaysia today

Muslims at the Golden Mosque in Quiapo district of Manila on Saturday express their support to Sulu Sultan Jamalul Kiram III and followers who are Sabah in press for their claim. DANNY PATA

LAHAD DATU: Malaysia has extended the deadline for the Sulu armed group to move out of Tanduo village and return home to today, following a request from the Philippines.

The Philippine Government had earlier asked for the deadline to be set for Tuesday to allow them to persuade Sultan Jamalul Kiram III to order his brother Azzimudie Kiram and the armed group of more than 100 to get out of Tanduo village in Felda Sahabat 17 where they have been holed up since Feb 9.

The request was made to Foreign Minister Datuk Seri Anifah Aman by his Philippine counterpart Albert del Rosario after the expiry of the Friday deadline.

Anifah, however, told The Star that he had conveyed the decision on the new Sunday deadline to Rosario.

“We are hoping the stand-off will end peacefully with the latest deadline,” he said, echoing Home Minister Datuk Seri Hishammuddin Hussein's statement that he wanted the two-week stand-off to “end sooner than later” without bloodshed.

Hishammuddin told reporters in Kluang that the extended period would not be too long as his ministry would leave it to the security forces to conduct an operation to end the stand-off.

He said the Tanduo incident was different from the country's past experience with armed groups such as Al-Maunah, Abu Sayyaf and Jemayah Islamiah as this group claimed to be descendents of the Sulu sultanate.

However, he said the country's sovereignty and the pride of the Sabah people must not be taken for granted.

The priority of the armed forces was to defuse the situation without bloodshed as it could affect Malaysia's good relationship with the Philippines, he said, adding that the preparation for the deportation of the Sulu group “is in the final stage”.

As the Philippine Government tries to persuade the Sulu Sultan to take their Sabah claim demand to a diplomatic level, the Kiram family has been adamant and had asked Azzimudie's group to stay put in Tanduo.

Although emissaries have been negotiating with Azzimudie, the political pressure in Manila has been mounting on President Benigno Aquino and his Cabinet to resurrect the long dormant Sabah claim following talk that the Oct 15 peace deal with the Moro Islamic Liberation Front had left out the Sulu sultanate as well as Nur Misuari's Moro National Liberation Front.

To help defuse and bring the stand-off to a peaceful conclusion, Philippine Defence Secretary Voltaire Gazmin said he and his Malaysian counterpart, including the armed forces of both countries, were closely coordinating their actions and exchanging information.

Gazmin said the Philippine military had enforced a naval blockade in the Sulu Sea to prevent undocumented Filipinos from entering Sabah as reports emerged that other groups from southern Philippines were poised to help Azzimudie's gunmen.

Stating that the Sulu group was pursuing its Sabah claim the wrong way, Gazmin revealed that six navy ships and a transport vessel were on standby in Tawi Tawi, about a 15-minute fast boat ride to Tanduo village.

By P.K. KATHARASON, MUGUNTAN VANAR and MOHD FARHAAN SHAH The Star/Asia News Network

Related posts:

The Philippines broken ranks with Asean 

Asean nations feud over South China Sea 

Philippines wants rearmed Japan to contain China   

Tensions in South China Sea: US won’t take sides, US-Philippines Naval drills,students attack US embassy

The Philippines broken ranks with Asean

HIGH STAKES: In its zeal to take on China's claims in the South China Sea, the Philippines has alienated itself
 

The official map of the Philippines labels the South China Sea as the West Philippine Sea and includes Sabah.

By  initiating an arbitral proceeding against China, the Philippines has upped the ante in the South China Sea. Manila says it is left with no choice but to take Beijing to arbitration after exhausting all remedies. However, many see Manila's action as a desperate act -- a publicity stunt to regain international prestige following the Scarborough Shoal fiasco in April last year.

Manila's request for an arbitral award opens up a can of worms, especially when its Regime of Islands claim (to the Kalayaan Islands and Scarborough Shoal) under its 2009 Baseline Law is contestable under international law.

Incidentally, its new official map that has renamed the South China Sea as the West Philippines Sea has re-incorporated Sabah, which is sure to reopen old wounds.

People who live in glasshouses should not throw stones, as they will expose not only the throwers' hypocrisy but also vulnerability.

No one doubts that Manila is fed-up with Beijing's intransigence. Lately, the Philippines has mounted diplomatic and political offensives in the South China Sea in a hope to get the United States and the international community to sanction China. Unfortunately, following a rebuff by Washington, the offensive failed to undermine China, the Goliath who was close to former president Gloria Arroyo, now under house arrest.

As a domestic political agenda, Manila's unilateral legal proceeding is likely to be futile again. Its success record in international arbitration has been dismal. For example in 1927, the US, acting on behalf of Manila, failed to convince judge Max Huber that the island of Palmas belonged to the Philippines. The judge awarded the ownership of the island (now known as Miangas) to Indonesia, although the island is within the 1898 Treaty of Paris Limits.

In October 2001, the Philippines sought permission to intervene as a non- party in the case involving the sovereignty of Pulau Ligitan and Pulau Sipadan. the International Court of Justice (ICJ) rejected (14 to 1) the request.

China, the world's second largest economy and a permanent member of the United Nations Security Council, has said no to arbitration proceedings. Without its consent, it is unlikely for the tribunal to act; furthermore, the tribunal may lack jurisdiction to hear the case.

Manila has insinuated that Beijing can no longer hide behind its declarations under Article 298 of the UN Convention on the Law of the Sea (UNCLOS). In 2006, China declared, "it does not accept any of the procedures provided in Section 2 of Part XV of United Nations Convention on the Law of the Sea with respect of all categories of disputes...", including sovereignty issues.

Manila says this proceeding against China is not over sovereignty. Yet, the notification statement implies the contrary.

Manila wants the proposed tribunal to determine the legality of China's nine-dash line of 1948 and to determine the legal status of 10 features that China has occupied in the South China Sea (mainly in the Spratlys) as either "islands or rocks". These issues are jurisdictional in nature. The nine-dash line relates to jurisdictional and sovereignty issues.

The Philippines brings the case to the tribunal under UNCLOS. Those familiar with jurisdictional claims in the South China Sea are aware of the nine-dash line, published in 1948. This means the line has preceded UNCLOS by thirty-four years; UNCLOS came into force in 1996.

The only way for UNCLOS to have jurisdiction over the case is to give it a retrospective power, which arguably constitutes an abuse of rights and goes against the legal principle of good faith (Article 300 of UNCLOS).

The unfortunate omission of the applicable law under Article 38 of the ICJ Statute in the notification statement has significantly weakened Manila's position.

I also find it puzzling for Manila to ask the tribunal to "require China to bring its domestic legislation into conformity with its obligations under UNCLOS".

On the diplomatic front, Manila has garnered zero support from the claimant parties.

Their silence results possibly from disagreement with the manner the Philippines handled a vital matter in the light of Statement on Asean's Six Point Principles on the South China Sea of July 20 last year.

Moreover, Manila's objection in May 2009 to the Joint submission to the UN Commission on the Limits of the Continental Shelf is still fresh in the minds of Hanoi and Kuala Lumpur.

Is Manila telling the world that it has broken ranks with Asean?

The way forward is not to break ranks but to mend fences with China.

by Dr BA Hamzah New Straits Times

Related posts/articles:

Philippines wants rearmed Japan to contain China 
Tensions in South China Sea: US won’t take sides...
Manila and ASEAN: Upping the ante on the South China Sea
Overhyping the South China Sea 

Malaysia celebrates 55 years Merdeka, a truly independence at retirement age?

Ugly two sides of a coin

Merdeka Day used to bring Malaysians together for one big do, but politics has changed all that
 

National colours, in droplets: The Malaysian flag, or Jalur Gemilang, is reflected in thousands of raindrops on a windscreen of a car during a rainy day in Kuching. It’s Aug 31 — Malaysians from all across the nation are flying the Jalur Gemilang with pride as they celebrate the 55th Merdeka Day. This photo is taken close up with a 90mm macro lense. —ZULAZHAR SHEBLEE/The Star

TODAY, Aug 31, is Merdeka Day. It’s usually an occasion celebrated with parades and speeches remembering heroes in the struggle for indedependence, marked by the singing of patriotic songs and much flag-waving.

The celebrations also generally include groups of participants in colourful traditional costumes to remind us of our rich cultural heritage and diversity.

It should be a time of reflection on what nationhood means for Malaysia and how we want our country to move forward, a time of celebrating together as Malaysians with no regard to race, religion or political affiliation.

Unfortunately, we live in such a politically-charged atmosphere, with the impending 13th general election looming over us, that even National Day has turned into an occasion for petty squabbling and the inevitable politicking.

The official theme of Janji Ditepati (Promises Fulfilled) has been met with derision by the Opposition, who claim it is an empty slogan as many Government promises have not been fulfilled.

For their part, Pakatan Rakyat leaders have said they will skip the official celebrations for their own state-level one, complete with their own theme of Senegara, Sebangsa, Sejiwa(One Country, One Nation, One Soul).



So, instead of uniting the people as befits Merdeka Day, the celebration has been split along partisan lines.

Public reaction seems to range from indifference to disdain. We’re grown weary from waiting for the polls to be called and it’s hardly surprising if people are skeptical of the endless campaigning.

Meanwhile, there’s the important matter of what Merdeka Day means for Sarawak and Sabah. On this day in 1957, it was the Federation of Malaya which gained independence from the British. Sarawak became independent on July 22 1963 and Sabah on Aug 31 1963, shortly before Malaysia came into being on Sept 16 1963.

Some quarters have raised the point that today’s celebration has no relevance to Sarawak and Sabah, and that Malaysia Day on Sept 16 should be the rightful National Day.

Coupled with this is the tricky question of whether Malaysia is 55 or 49 years old, depen-ding on whether the birth of the nation is deemed to be in 1957 or 1963.

We’re in the peculiar position whereby Malaya became independent on Aug 31 1957, but the country of Malaysia was formed on Sept 16 1963 through the merger of Malaya, Singapore (which left in 1965), Sarawak and Sabah.

For Sarawakians and Sabahans, Sept 16 is the more meaningful date because it commemorates the birth of Malaysia, a nation of which we are a part. Peninsular Malaysians need to understand this and realise why Sept 16 is important to us here.

On our part, we should accept that Aug 31 is likewise an important date for the peninsula. However, since Sept 16 is Malaysia Day, it should be given equal, if not greater prominence, than Aug 31 as a truly national celebration of our coming together as a country.

Nevertheless, as we celebrate National Day today, let us be reminded of the Proclamation of Independence read out by Tunku Abdul Rahman in 1957. It ends with the hope that the newly-independent nation “with God’s blessing shall be forever a sovereign democratic and independent state founded upon the principles of liberty and justice and ever seeking the welfare and happiness of its people and the maintenance of a just peace among all nations.”

In line with this, the Christian Federation of Malaysia’s Merdeka Day message is a timely call for Malaysians to forge ahead and invest in building a progressive and better country for all.

“In this celebratory occasion let us dream a new dream for all Malaysians. We pray to Almighty God that He will grant us a new vision of Malaysia for ourselves and all our children. We are a nation truly blessed with so much potential in our multi-ethnic, multi-cultural and multi-religious communities.

“Let us mutually share all our resources, our wealth and opportunities and be a model nation to the nations around us. We can begin to do this by loving God and our neighbours as ourselves. Let us be responsible citizens of our beloved Malaysia. Let us care for those in need like the orphans and widows. May we meet the needs of the marginalised and others left by the wayside. In concert, let us jointly prosper our neighbours first.

“As Malaysians we step forward together in unity and harmony for all Malaysians and not pay heed to the strident voices of some with their narrow interests,” it said.

It also called for justice and righteousness to be upheld and for friendship, unity and harmony to be strengthened in the country.

May this be our prayer and hope for Malaysia as we celebrate this Merdeka Day.

ET CETERA By SHARON LING

 Related:

 

Malaysian 13th General Election Pow-wow, Register as voters now!

On the edge of our seats

The whole country is getting fidgety as Malaysians await the 13th general election.

IT’S an extended silly season. Everyone is ultra sensitive and every event or statement is examined with a fine toothcomb for any underlying political message.

Hardly a day goes by that a politician does not let fly a missile at one opponent or another. From cows, condos to sex tapes, no one and nothing is spared.

One would have thought that after months of this, politicians would have run out of ammunition, and from the quality of the rockets being shot out, they are close to scraping the bottom of the barrel.

Everyone is so tense that even the recent reduction in RON 97 by 10 sen is seen as an indication that the polls is near.

By my vast experience of having covered the past five general elections, the polls should have already been here, gone and dusted. But this time round, Prime Minister Datuk Seri Najib Tun Razak seems intent on dragging out the silly season for as long as he can.

His opponents have joined him by declaring that Selangor and Penang would not hold their polls together with the national elections. Selangor MB Tan Sri Khalid Ibrahim had declared that his government would definitely not follow if it is held this month.

A June general election does not seem likely now (for some unexplainable reasons, the country has never held a general election in the month of June). So does this mean that Selangor will now follow suit if it is held next month?

No way, says Khalid’s boss Datuk Seri Anwar Ibrahim who wants Selangor to go the full distance (sometime in April next year). The games of the silly season continue.

One senior Barisan Nasional official enquired with a party worker recently how things were going and was shocked at the reply he got.

“Boss, we are all very tired. We have been on war footing since October and we do not know how much more we can take,” said the party worker.

Some of the candidates-designate from both sides, who have been campaigning quietly since January, are quietly complaining that they are running out of funds and at the same time cannot do anything about raising money from supporters.

“What am I to tell my supporters? No party will announce its candidates so early for fear they may be bought over or of sabotage,” said one aspiring candidate.

This is why some Umno stalwarts are calling on the leadership to start naming the potential candidates so that they can “be properly introduced” to the branches and avoid any sabotage.

This, I suspect, will also allow these people to make use of the official party machinery which means it will be less taxing on his or her personal resources which can then be reserved for the actual polling and campaign period.

This 13th GE will be a watershed election for Malaysia and every seat will see tough fights. “The mother of all battles” was how one senior journalist described the coming polls.

Unfortunately, like all things that are anticipated with such great expectations, I fear it will fall short of everyone’s outlook. GE 13 can’t help but disappoint because we are expecting so much from it.

Prior to last week, when it became obvious that the polls would not be in June or July, everyone seemed resigned to the election being held in September.

But then came Najib’s announcement that Budget 2013 would be tabled on Sept 28.

One could almost hear the groans of frustration going up all over the place. The so-called experts are now even suggesting November or January as the new dates.

One Cabinet Minister even pointed out that Tun Dr Mahathir Mohamad held the 10th general elections in exactly the same manner.

Dr Mahathir tabled the budget in October 1999, allowed the Lower House to debate the budget, but before it would be passed, he went to see the King and had Parliament dissolved. He took his Budget as his manifesto for the polls.

This senior Cabinet member said outright that Najib would do exactly the same because it proved to be a masterstroke by Dr Mahathir to defeat his foes then.

This conversation with the minister took place a month ago, long before Najib announced his Budget date.

So does this mean that the polls will be in October?

If statistics are anything to go by, it is unlikely to be held then because only the 1990 GE was held in the month of October (Oct 21 to be exact).

The following are the exact dates of the past 12 elections.
1st GE - Aug 19, 1959;
2nd GE - April 25, 1964;
3rd GE - May 10, 1969
4th GE - Aug 24 and Sept 14 1974;
5th GE - July 8, 1978;
6th GE - April 22, 1982;
7th GE - Aug 3, 1986;
8th GE - Oct 21, 1990;
9th GE - April 25, 1995;
10th GE - Nov 29, 1999;
11th GE - March 21, 2004; and
12th GE - March 8, 2008

Hopefully, someone out there can find a pattern from this list of dates and then correctly predict the polling date that Najib is holding so close to his chest and does not look likely to reveal any time soon.

Those claiming to know the man’s plans said we should examine Najib’s speech during last year’s Malaysia Day on Sept 16.

“He made many promises there. Once he has fulfilled all those promises, I am sure he will call for the elections,” said one of them.

The polls cannot come fast enough for most of us because we want to get back to some real work.

WHY NOT?
By WONG SAI WAN

> Executive editor Wong Sai Wan has been on election footing since 2010 and will be glad when it comes.

EC: Register now and you can vote in September

KOTA KINABALU: Malaysians who are eligible to vote should register this month to qualify to vote in the general election if it is held in September.

“If they register in the second quarter of this year, they will be able to vote if the election is held after August,” Election Commission deputy chairman Datuk Wan Ahmad Wan Omar said yesterday after briefing 30 officials from 15 political parties in Sabah about electoral regulations.

There are about a quarter million Sabahans above the age of 21 who have yet to register while about 3.6 million eligible voters nationwide have not registered.

Wan Ahmad said there were 946,638 registered voters in Sabah and 258,943 eligible voters have yet to register.

“I hope they will register now,” he said, adding that if everyone registered, Sabah would cross the one million mark and could reach 1,205,581 registered voters by September.

He also said there were very few people, who had come forward to clarify the position of some 13,000 dubious voters when they exhibited the names for three months.

“We believe many of these people are dead and their families did not report the deaths to the National Registration Department. We can't remove their names, so it remains in the rolls until their next-of-kin have not come forward to clarify it.

“That's why sometimes you get cases of someone with an age of 120 who is still in the roll.

“We cannot remove it as we are not empowered by law to delete such names,” he added.

Wan Ahmad also said they would be setting up 31 mobile election enforcement teams to check on offenders for Sabah and Labuan's 26 parliamentary constituencies.

He said there would be two teams each in Kota Kinabalu and Sandakan while each constituency would have a team, comprising an election officer, a police inspector, a local authority official and representatives of contesting parties.

By MUGUNTAN VANAR vmugu@thestar.com.my 

Malaysia's Minimum wage’s benefits and effects

Minimum wage’s benefits are plenty

I HAVE been waiting for a reason to talk about a pizza delivery man I met in a lobby of an condominium while waiting for a lift to arrive. It was in the evening and he was delivering pizza to one of the residents. I struck a conversation about his job, his salary and his aspirations, and got enough from the chat to get his views that the decent salary he was making was insufficient.

The young man claimed he was making RM2,200 a month whizzing through traffic, despite the weather, to send piping-hot pizzas to customers from between 10am and midnight.

He said that after sending back money to his parents in Pahang and paying for his lodging and expenses to live in Kuala Lumpur, the salary was just not enough. Furthermore, the job was wearing him down and he wants to do something else, but is finding it hard to get a new skill with the demands of his current job and the obligations he has.

His story will resonate with many others who are struggling to make ends meet, and whatever little assistance they get will surely be welcome. That small bit of help though came for millions of Malaysians by way of a new minimum wage the Government announced on April 30.

Workers in Peninsular Malaysia were promised a floor wage of RM900 a month and those in Sabah, Sarawak and Labuan RM800 a month. The minimum wage will take effect six months from the time the law is gazetted to allow industries to make adjustments to comply with the new law. Non-professional services companies with fewer than five employees will be given a further six months to make their adjustments.

The higher minimum wage will benefit a reported over three million private-sector employees and the net effect economists have calculated is a negligible increase in unemployment and a small drop in investments.

Economic growth and the investments that will take place and the promise of new jobs will be more than enough to offset those small impediments.

One drawback many can expect is higher prices. You can bet employers will pass on the higher staff costs to customers, but the quantum should be kept in check given the competition that exists in business.

The benefits, though are plenty.

The higher wage that almost a third of the workforce will benefit from will be a boost to the economy, which in recent years has been driven by consumption.

The higher wages will also manifest in other benefits for workers. A higher base salary will mean higher contributions to the Employees Provident Fund (EPF) and the extra will go some way to shore up the retirement savings of many Malaysians.

Companies will see an increase in their payments to the EPF, but with productivity having risen 6.7% per year over the past 10 years and companies making a lot more money than before judging by profits announced by listed companies and tax collection by the Government, they can afford to pay a little more for their workers without diving into bankruptcy.

With a third of the workforce soon enjoying a higher base salary, the increased income will go some way to satisfy the requirement of banks under the new responsible lending guidelines.

Under the new loan criteria, banks will look at the basic salary and decide whether a person can afford a loan. With higher salaries, maybe that will be enough for low salaried people to qualify for a loan to get the small car or home they need.

The minimum wage will help those in need. It might help those like the pizza delivery man if the minimum salary together with allowances are fixed. It is a start that many Malaysians will be thankful.

● Deputy news editor Jagdev Singh Sidhu needs to get a lucky charm ahead of this weekend's FA Cup final.

Minimum wage effects manageable

Effects of the minimum wage policy are expected to be manageable and unlikely to have a significant impact on companies, with rubber glove manufacturers seen to be the hardest hit, analysts said.

UOB KayHian Research head Vincent Khoo said there will be no significant wage rise for most listed companies, especially given the flexibility for the floor wage to include allowances and benefits, hence no wage restructuring is required.

"However, small and medium enterprises in particular, may still be impacted by higher overtime and there may be an upward cascade effect for some listed companies."

In terms of sector, he said glove manufacturing remains the most impacted but the effect should be significantly softened with the incorporation of some allowances into wage calculations.

"Minimum wages would lower industry profits by as much as over 10% as a significant portion of the industry's staff force earn only RM600 to RM700 a month before allowances and benefits."

Consumer companies emerge as the winner as overall demand for fast-moving consumer goods should improve with higher disposable income among low-wage earners.

"We expect manufacturers to raise product prices during the implementation grace period to maintain profitability," Khoo said.

Affin Investment Bank economist Alan Tan said: "The direct effect of a minimum wage increase will result in increases in the relative prices of goods produced. However, even if minimum wages were to lift prices (especially in low-wage industries), we expect the inflationary impact to be manageable, as the minimum wage is set at a relatively low level, which will not raise production costs and overall price level significantly.

"Overall, we expect the broader economic effects of minimum wage in the country on company profits, prices, and inflation, to be manageable and unlikely to have a significant impact on the economy."

However, CIMB Research said higher wages will release pent-up consumption, albeit with some inflationary impact.

"Our view is that an appropriate minimum wage could over time achieve a big push, which is moving the low-wage, low-consumption and informal labour market to a high-wage, high-consumption and formal labour market."

For rubber glove makers, HwangDBS Vickers Research said staff costs would increase by 17-22% while earnings could fall by 5-19% .

"We expect the additional staff costs to be passed to customers over time, but in the immediate term, we expect earnings and margins to be dampened."

It said Hartalega Holdings Bhd is the least affected while Top Glove Corp Bhd would be most affected.

"Based on our estimates, Hartalega's salary costs could rise by RM10 million a year, an increase of 17% and this would lower the 2013 estimated net profit by 5%. For Top Glove, staff costs could rise as much as RM39 million (an increase of 22%), denting 2013 earnings by 19%. Meanwhile, we estimate Kossan Rubber Industries Bhd's annual salary costs to increase by RM18 million (a rise of 17%) and net profit to fall by 13%."

However, it said that if fixed allowances or cash payments are allowed in the calculation for minimum wages, the impact will be softened.

It maintained a hold on Top Glove at a target price of RM4.80 and Hartalega (RM7.70) and Kossan (RM3.30).

Affin Investment Bank said rubber glove makers have indicated that they will most likely reduce or re-categorise certain allowances to help offset the increase in their workers' basic salary.

Ee Ann Nee
sunbiz@thesundaily.com

Glove makers to gain from wage rule in long run

PETALING JAYA: While the new minimum wage will dent glove makers’ earnings in the near term, it is expected to be beneficial for the industry in the long run, CIMB Research said.

“It will encourage glove makers to reduce their use of low-skilled labour and improve their manufacturing processes by using more advanced technology and methods.

“Also, we believe that wage inflation will make the smaller glovemakers less competitive and catalyse consolidation in the sector. This will strengthen the positions of the large glove makers, favouring those with more efficient processes such as Hartalega (Holdings Bhd),” the brokerage said in a note to clients.

On Monday, Prime Minister Datuk Seri Najib Tun Razak announced the details of the country’s wage floor for the private sector, with the monthly benchmark set at RM900 for Peninsular Malaysia and RM800 for Sabah, Sarawak and Labuan.

This translates to an hourly rate of RM4.33 and RM3.85 respectively.

Some analysts say the new minimum wage rule may encourage glove makers to reduce their use of low-skilled labour and improve their manufacturing processes by using more advanced technology and methods.

The policy applies to all workers in the private sector, save for those in domestic services, but it will only take effect six months after the Minimum Wages Order is gazetted.

The law, which will be reviewed every two years, affords some flexibility to employers as they can absorb a certain amount of allowances and fixed cash payments in calculating the new wages.

According to CIMB Research’s forecasts, the minimum wage could shave some 1% to 7% off glove makers’ financial year 2013 core net profit, but the brokerage has kept its “neutral” rating for the sector and estimates for the companies under its coverage as they may yet find ways to mitigate the impact of higher staff costs.

Other research houses have also maintained their ratings pending further clarification from the companies and the actual gazetting of the law.

Among the glove makers, Hartalega is the least affected by the setting of a wage floor due to its highly automated production facilities and high margins relative to its peers.

“We believe Hartalega will emerge the strongest from the higher wages as its operations are already lean and management is working hard to further automate its manufacturing process.

“With the highest margins (lowest post-tax cost base), technologically advanced manufacturing process and an aggressive eight-year expansion plan, Hartalega has the most wiggle room in the sector to price gloves competitively and gain market share,” CIMB Research said.

Management was aggressively working on further automating the stripping and packaging portions of its manufacturing process to reduce the use of low-skilled labour and optimise operating expenditure, it added.

CIMB Research said Top Glove Corp Bhd would be the hardest hit as a result of low margins and an oversupply for its gloves that could take two to three years to work off.

“We believe it would be challenging for management to pass on the cost of the minimum wage to customers. This would put further pressure on margins and Top Glove’s high-volume low-price model.”

Top Glove shares have reflected this, with the counter losing 13 sen, or 2.72%, to RM4.65, making it one of the day’s top losers.

In contrast, Kossan Rubber Industries Bhd and Supermax Corp Bhd dipped one and two sen respectively to RM3.24 and RM1.87 yesterday, while Hartalega was unchanged at RM7.80.

For Supermax, CIMB Research said the manufacturer was ramping up nitrile production to 53% of capacity by financial year 2013. This could help curb rising staff costs, the brokerage added, as the cash cost of producing nitrile gloves was 20% lower than natural rubber.

Kossan, meanwhile, is poised to tap on the growth in China, where glove usage is a mere two gloves per person per annum versus 50 in Europe and 96 in the United States. Kossan entered the market in financial year 2012 via its 53%-owned Cleanera HK Ltd.

Moving forward, HwangDBS Vickers Research expects the additional staff costs to be passed on to customers over time.

Affin Investment Bank, in a report, also noted that Top Glove had previously said it would likely pass on 80% to 90% of the higher costs by increasing prices, which could prompt other glove makers to do the same. - The Star Business

Related post:
Malaysia's minimum wage, and its implications 

Is Malaysia's history all about semantics? A lesson on Sept 16!

Tweet

ONE MAN'S MEAT By PHILIP GOLINGAI

The debate over when is Malaysia Day, Aug 31 or Sept 16, will continue as there are still differing views. But one thing is certain – there are Malaysians who are very passionate about our history. 
Image via Wikipedia

Last week I had my Zainal Kling moment. In case there are those who are clueless on the recent big issue concerning Malaysia, here’s a summary.

Datuk Prof Dr Zainal Kling of the National Professors Council stirred a historical controversy when he declared that Malaya was never a British colony but only a “protectorate”.

Last week, in this column, I wrote an article titled “A lesson on Sept 16” (see below).

It was a history lesson that the Federation of Malaya, not Malaysia, was created in 1957. And that Sabah and Sarawak did not join Malaysia – they formed the country together with the then Malaya and Singapore on Sept 16, 1963.

That was that, I thought. Until I received brickbats mostly from my fellow Sabahans. Though most comments were good-hearted ribbing, I felt as if I was a snake that bit its own tail.

There were jocular warnings that Sabah will use its special immigration power to bar me from entering my state.

There were also warnings that went for the jugular. I was accused of living in Kuala Lumpur too long.
Factually correct, as I’ve been living in Greater Kuala Lumpur for more than 25 years. But parochially incorrect as you can take Philip out of Sabah, but you can’t take Sabah out of Philip.

And it was as if I did not live through Parti Bersatu Sabah’s ‘Sabah for Sabahans’ political era.

Factually, there was nothing incorrect about my article. It is just that I neglected to mention something that is close to the heart of many Sabahans.

The first brickbat was from a reader who may or may not be a Sabahan or a Sarawakian.

Sonny68mak emailed: “If I recall correctly my history lessons, Sabah, Sarawak and Singapore declared independence on Aug 31, 1963.

“They could not form Malaysia on that day because they were waiting for the official referendum results to be declared by the United Nations which was delayed by Jakarta and Manila’s protests at the UN,” wrote the reader, who could even be a Singaporean.

“So therefore the Borneo states independence was effective Aug 31, 1963. They formed Malaysia on Sept 16 as two-weeks-old independent sovereign states.”

“Please ask your Prof friend to recheck the facts so that the public is not confused.”

Fair comment, I thought. As if I was debating the issue, I would have taken a similar stand.

However, just to show him that I was not a hack, I replied: “Yes, I did check that fact with the Prof.”

“I told him for example, North Borneo gained independence on Aug 31, 1963 so it must have been an independent country,” I wrote.

“He said ‘no’ as even though the British granted independence to North Borneo on that day, it still administrated Sabah.”

As soon as I sent that email, I received an SMS from a Sabahan who is a veteran journalist. Though the timing of his SMS was coincidental, it was as if he sensed my “betrayal” in cyberspace.

The 40-something journalist SMS-ed: “I beg to differ. On Aug 31, 1963, the Union Jack came down and the Sabah flag went up. Sabah and Sarawak were independent nations until Sept 16, 1963. You’re selling propaganda. Ha ha”.

Immediately I called him. And after 30 minutes we agreed that history is about semantics. And, quoting Winston Churchill, “History is written by the victors”.

Then I received a call from a Penangite who is more Sabahan than me. Well, he has lived in Sabah for more than 20 years.

“We can buang negeri (kick you out of Sabah) you!” he said.

“Your article missed the point. You should have written that Sabah was a country before it formed Malaysia! And you should have written that 1/3 of Sabahans wanted to form Malaysia, 1/3 did not want to and 1/3 were undecided.”

“You’ve also missed the point that it was four equal nations (Malaya, Sabah, Sarawak and Singapore) forming the Federation of Malaysia.”

“But, but, but,” I replied. “The point of my article is just to discuss Sept 16.” “No, you missed the point!” he said.

“Do you know that Sept 16 is also Lee Kuan Yew’s birthday?” I said, just to change the topic.

However sharp the comments I received throughout the day, it was delightful to know that 48 years after the fact, Sabahans are still passionate about their history.

Still, it made me feel as if I had sold Labuan to the Feds. Wonder where’s Zainal Kling? I need a hug. And some historical semantics.

A lesson on Sept 16

ONE MAN'S MEAT by PHILIP GOLINGAI

The federation of Malaya, not Malaysia, was created in 1957. Sabah and Sarawak did not join Malaysia – they formed the country together with the then Malaya and Singapore on Sept 16, 1963.

ON AUG 31, I spent my Mer-deka Day holiday tweeting history lessons. I found certain historical inaccuracies on my Twitter timeline as annoying as – to misquote a tweet from @ATM2U – seeing a straight man eat cupcake.

For example, one of Malaysia’s tycoons tweeted: “Independence day for Malaysia today.”

As a Sabahan, I just had to correct him even though he is worth a billion times more than me. So @PhilipGolingai admonished: “Sir, independence day for Malaya. Malaysia was formed on Sept 16, 1963.”

Then someone – not the billionaire – tweeted: “Why Singapore not celebrating Malaya’s Indepen-dence day?” History was definitely not her favourite subject.

I replied: “When Malaya dec-lared Merdeka, Singapore was under the British. On Sept 16, 1963, Singapore, Malaya, Sabah & Sarawak formed Malaysia.”

My colleague @ChiaYingTheStar (Lim Chia Ying) tweeted: “How can a tv station say Happy Birthday to M’sia on Aug 31?? My gosh, no wonder kids can never learn real facts?”

On Merdeka Day, Faridah Stephens, daughter of one of Malaysia’s founding fathers, Tun Fuad Stephens (Sabah Chief Minister), reminded her Peninsu­lar Malaysian friends of our country’s history.

“(Some of) my friends wished Happy 54th Birthday Malaysia. They always say Malaysia. But it is not Malaysia’s independence but Malaya’s,” she lamented.

On Facebook, Faridah watched a video clip of Negaraku sung in Chinese. The rendition was “beautiful” but the ending of the video was a “dampener”.

“Alamak, I thought, when I saw ‘Happy 54th Birthday Malaysia’ at the end,” she said.

How did her friends’ respond to her reminder?  “Some people went quiet,” she said, laughing heartily.
      
Some Malaysians mistake Aug 31 for Malaysia’s birthday, according to Faridah, because “we tend to be West (Peninsular) Malaysia-centric”.

“Many forget that Malaysia did not exist until 1963. Malaysia was not created in 1957. Sabah and Sarawak did not join Malaysia, they formed the country,” she said, adding that “I’m just stating a historical fact.”

To get my historical facts right, I called my old classmate, then a history buff, at La Salle secondary school in Tanjung Aru, Sabah.

“Why are there Malaysians who confuse Hari Merdeka as Malay-sia’s birthday?” I asked Danny Wong Tze Ken, a history professor in Universiti Malaya.

Wong lectured me on the birth of Malaysia. Here’s a summary: On Aug 31, 1957, the Federation of Malaya was established. It was expanded into the Federation of Malaysia on Sept 16, 1963. The country became larger with the inclusion of Singapore, Sarawak and Sabah. And in 1965, Singapore left.

“If you think of the day for independence for Malaysia, then Sept 16, is logical for Sabahans and Sarawakians as that was when both states achieved independence, in 1963. But for the people of Peninsular Malaysia clearly it was Aug 31, 1957, as that was when Tunku Abdul Rahman declared Merdeka,” Wong ex-plained.

“So when is Malaysia’s birthday?” I asked.

“The best answer is to take the case of the United States. Their independence day is July 4, 1776, even though at that time there were only 13 colonies. Although the rest of the United States was incorporated only later, all the 50 states observe July 4 as Indepen-dence Day,” he said.

“So when is Malaysia’s birthday?” I asked again.

“As a newly formed Federation of Malaysia the birthday of Malaysia will be Sept 16 whereas the Independence Day of the country remains on Aug 31,” he said.

Wong said over the years, Sept 16 was no longer celebrated as Malaysia Day.

“In Sabah it was celebrated as the TYT’s (Governor’s) birthday. And Sabahans wondered why that day was then celebrated as the TYT’s birthday and not as Malaysia Day,” he added.

“It was only last year that Sept 16 was declared a public holiday to commemorate the formation of Malaysia.,” the historian said.

So, on Friday, if you are on Twitter, don’t forget to tweet “Happy 48th Birthday Malaysia!”

Related posts:

The decline of the West

Malaysia's history, sovereignty violated, semantics need truly national!

British Massacre - Batang Kali Victims win UK court scrutiny 

PAS Deputy President, Mat Sabu, In the spotlight for wrong reason?

Malaysia Day: Let’s celebrate Sept 16 for its significance!

Malaya, look east to boost Malaysian racial unity!    

Malaysia's future: A time for Malay renewal ! 

Malaysia still in pursuit of full independence  
The true meaning of independence 
Reviving our winning ways    

Malaya, look east to boost Malaysian racial unity!

Tweet

Look east – to boost racial unity

ON THE BEAT WITH WONG CHUN WAI

For the first time since 1963, we will celebrate National Day and Malaysia Day together. This should emphasise some points about our beloved country.
Image via Wikipedia
IT was just a year ago that Malaysia Day – Sept 16 – was celebrated as a public holiday to commemorate the date the country was formed.

In 2009, Datuk Seri Najib Tun Razak announced that Sept 16 had been declared a public holiday and that from 2010, Malaysia Day would be celebrated with activities that would foster the 1Malaysia spirit.

This year, it is even more special: With divine intervention, National Day and Malay­sia Day will be celebrated together for the first time.

This has been made possible by the fact that with Hari Raya Aidil Fitri falling on the last two days of August, it would not have been practical to hold the national day parade on the 31st.

A dual celebration would bring even greater meaning. It would also emphasise the point that there would have been no Federation of Malaysia if Sabah and Sarawak had not helped to form it on Sept 16, 1963.
Let’s get it right, Sabah and Sarawak did not join Malaysia, they helped to make Malaysia a reality.

Many young Malaysians in the peninsula wonder why they have to bring along their identity cards or passports when they travel to these two states or, worse, why they need to apply for work permits if they wish to work there.



This is a case of our history being badly taught in schools. Until today, our students are not properly told why these two states are different when it comes to control over their immigration, and their state administrative systems.

In the peninsula, state leaders are known as state executive councillors. In Sabah and Sarawak, they are known as state ministers. Both states, however, are led by chief ministers.

In the administration of justice, the courts in Sabah and Sarawak are part of the Federal court system but the Federal Constitution provides that there shall be two High Courts of coordinate jurisdiction – the High Court in Malaya and the High Court in Sabah and Sarawak, formerly called the High Court in Borneo.

But the most important focus of this year’s joint celebration should be this reminder that Malaysia does not comprise only Malays, Chinese and Indians.

Let us drive this point that in Sarawak, there are 27 distinct indigenous groups speaking 45 different languages and dialects while Sabah has 32 officially recognised ethnic groups with over 80 languages and dialects. Despite the diversity, there is racial harmony.

In many ways, those of us in the peninsula have fared badly in the area of race relations, no thanks to self-appointed guardians of our communities and morality too, in some cases.

The people of Sabah and Sarawak do not have any hang-ups about race. Take, for example, Datuk Seri Idris Jala, the Minister in the Prime Minister’s Department. A Kelabit from Sarawak, and a Christian, he has a Malay name. But this does not raise any eyebrow in the state. It is perfectly normal.

Another is Datuk Anthony Bujang, chief executive officer of the New Straits Times Bhd. He is a Malay from Sarawak but has a Christian first name. The accountant turned media boss’ name would not earn him any glance in his home state either.

It is well known that Sarawak Chief Minister Tan Sri Abdul Taib Mahmud has no qualms about opening churches, and he does this even in the middle of election campaigns. He has openly declared that he studied the Bible in school and his family has donated money to churches.

No Malay leader in the peninsula, in his right mind, would have dared to make such a statement unless he wished to commit political suicide.

It is in these two states that the spirit of 1Malaysia truly lives.

It is a joy to see people of all races sitting down together and enjoying their coffee in the old kopi tiam in these two states.

We need to see each other as Malaysians and nothing more. We need to remove racial prejudices and ignorance if we are serious about being 1Malaysia. Let’s make it a reality and not just a slogan.

Related posts:
Malaysia Day: Let’s celebrate Sept 16 for its significance!  
Malaysia's future: A time for Malay renewal ! 
Malaysia still in pursuit of full independence  
The true meaning of independence  
Reviving our winning ways  

Malaysia Day: Let’s celebrate Sept 16 for its significance!

Tweet

Let’s celebrate Sept 16 for its significance

WHY NOT?  By WONG SAI WAN saiwan@thestar.com.my

It’s time to recognise the date our country was actually formed so that we can truly be a single nation.

THIS Aug 31 must have been the quietest ever in our 54-year history since independence from the British – no grand parades, no multi-million ringgit fireworks display and no days of closed roads to cater for all sorts of rehearsals.

Instead, the streets of Kuala Lumpur were empty as city folks deserted the Klang Valley for their hometowns over the Hari Raya Aidilfitri holidays.

The Government realised that it would have been practically impossible – and very unpopular – to stage the Merdeka Day celebrations as usual because it would fall on the second day of the Raya celebrations.

Even if they could have forced the civil servants, soldiers, police and other uniformed units to participate in a parade, there would not have been anyone to witness any of the festivities.

Instead, the celebrations will now be held on Sept 16 to coincide with Malaysia Day – that is the exact day 48 years ago Sabah, Sarawak and Singapore joined Malaya to form the Federation of Malaysia.

Decades ago, the whole nation used to observe Malaysia Day but later, in the 1970s, it was only left to Sabah and Sarawak to do so.

It would not be far wrong to say the separation of Singapore from the Federation in 1965 left a bitter taste in many in the ruling Government, thus making it difficult to continue to commemorate that date.

However, things have changed recently. The rising political importance of Sabah and Sarawak has made it necessary for the Government to celebrate the formation of Malaysia.

For years, the people in the two states have been grumbling as to why they should celebrate Aug 31 when it was not the date they gained independence; they would rather celebrate the day they joined the Federation.

After being independent from the British for over 54 years, it is time that we as a nation focus on celebrating the formation of the whole country.

Our leaders – past and present and from both sides of the political divide – have often paid lip service that we have to practise integration between the Peninsula and the two states on Kalimantan island.

The time for lip service is over and it is time for action, and we can start by making Sept 16 the permanent celebration of our nationhood.

We should celebrate how far we have come along, we should celebrate our achievements as a country, and we should celebrate how we are more united now than we were 48 years ago.



We should not forget about Aug 31; after all it is the day Malaya became a country. It is an important day in history and maybe it should be a day of remembrance while Sept 16 be the day of celebration.

Over the past few years, Aug 31 has become the day of flying the flag and show of patriotism, and somehow this Wednesday felt really different without all the jingoism about the need to show we are Malaysians.

In many ways, what we had been doing for Aug 31 was a bit contrived. We now need to bring back the true meaning of what it is to be Malaysian, and to allow that expression of patriotism to be real and from the heart.

After all, Prime Minister Datuk Seri Najib Tun Razak had used 1Malaysia as his rallying call to unite the people. Making Sept 16 a permanent celebration date will surely be a step in the right direction for him.

Last year, he announced that Sept 16 would henceforth be a Federal holiday.

Historically, Malaysia was to have been formed on June 1, 1963, but the date was later postponed to Aug 31, 1963, to coincide with the sixth Merdeka Day.
Image via Wikipedia
As we all know, that did not happen because Indonesia and the Philippines objected to the formation of Malaysia.

The formation date was then postponed again – to Sept 16 – to give the United Nations team time to conduct referendums in Sabah and Sarawak regarding the two states’ participation in a new federation.

Recognising Sept 16 would also mean re-opening certain issues the two states have with the Federal Government over certain points of agreement when joining the Federation.

It is time to take a relook at the issues.

For one thing, I could never understand the need for Immigration procedure for travel between the Peninsula and the two states. Yes, at one time there was a need to control the number of people from the peninsular from grabbing all the job opportunities in Sabah and Sarawak.

Today, the education disparity has narrowed, and in some cases have become even non-existent.

I have met so many capable Sarawakians and Sabahans in my 27-year career in The Star, some of them as colleagues and some people I had interviewed.

In my frequent trips to the two states, I have found that the people there can more than stand up to any Orang Malaya (as Sarawakians call those from the peninsular) or Orang Semenanjung (the Sabahan equivalent) in terms of capabilities and qualification.

There are a reported 50,000 Sarawakians working in the shipyards of Johor, and they have proven to be essential workers for the industry. They have integrated well into Johor society.

This is among the many reasons we have for reinstating Malaysia Day. The following is a ditty I wrote to greet all my friends on Facebook and Twitter:

We have had KongsiRaya.
We have had DeepaRaya.
We have had XmasRaya.
In a few hours MerdekaRaya.
Selamat Hari Raya.
Selamat Hari Merdeka!!

To that I want to add Selamat Hari Malaysia come Sept 16.

■ Executive editor Wong Sai Wan has decided that he will only fly the Jalur Gemilang at his home on Sept 15 and 16 to celebrate the founding of our country.
  
Make Sept 16, Malaysia Day 

I READ “Let’s celebrate Sept 16 for its significance” (The Star, Sept 2) and fully agree with columnist Wong Sai Wan that we should celebrate Malaysia Day, which marks the formation of our country.

I have often admired the way the Americans celebrate their Independence Day on July 4 with barbeques, picnics and family gatherings.

I often wonder why we don’t do the same here in Malaysia. We have an official parade on Merdeka Day and some patriotic flag-waving and that’s about it.

Most Malaysians would rather take the opportunity to go on holiday overseas, or go shopping at the malls.

An occasion to remind ourselves of what makes this a wonderful country, to connect with our fellow Malaysians, and to forge a common destiny is lost.

An opportunity to be thankful for our independence and sovereignty is forgotten.

My friend Eddin Khoo would say this is because we don’t have “a common language of nationhood” – we did not have to really struggle together for our independence. Malaysia is unique in that it is made up of diverse peoples, with diverse histories, cultures, religions, and races, which makes it even
more difficult to achieve national unity.

I am an optimist, and I believe each of us has a part to play in nation-building. Yes, this is far from a perfect country, but we must make the most of our situation.

We have to start by looking at the cup as being half full rather than being half empty.

Let’s be thankful for our wonderful diversity of culture, race, religion – which gives us this delicious rojak of food, arts, architecture, clothing, etc.

Let’s be thankful that we live in a country unscarred by war and unburdened by natural disasters.

Let us celebrate all that is good about this country. Let us work together to make this country better and fairer for all. Let us treat each other with respect, sincerity and compassion.

It is said that “men did not love Rome because she was great. She was great because they had loved her”. Let us love our country.

It was with these thoughts in mind that my friends and I celebrated Malaysia Day last year by organising a street festival at Bangkung Row, Bangsar, where we had food stalls, NGO booths, cultural performances, talks, art exhibitions etc.

This Sept 16, we will again celebrate Malaysia Day at Bangkung Row, with a series of talks and discussions on topics such as: “The Voices of the Moderates”, “Constructed Landscapes” (a talk by artists Anurendra Jegadeva and Yee I-Lann), “In Bed with Malaysia – Exposing the Rakyat’s Sexuality”, “Prejudice and Stereotyping”, “Conversation on Culture with Farish Noor and Eddin Khoo”, “Found in Malaysia”, “Malaysian Writing in English”, “Undi Malaysia”, “Environmental Debate”, etc.

We will also be having Malaysian food and handicraft stalls, over 20 NGO booths, and wonderful performances such as dikir tewas with 100 performers all the way from Kelantan (with the legendary Daud Bukit Abal), Sabahan and Sarawakian dances, Orang Asal nose flute performance, acrobatic lion dance, local singers (including Amirah Ali and Azmyl Yunor), and a grand Jom Joget party with the famous Rozells from Penang (singing P. Ramlee, Jimmy Boyle, Teresa Teng, etc, tunes) to end the evening.

Do come and join us in celebrating Malaysia Day at Bangkung Row.

I hope all Malaysians will start their own Malaysia Day celebrations, whether it is a street party in your neighbourhood or a pot luck dinner at home with family and friends or lighting a candle for peace in our country.

What is important is that we take the opportunity to celebrate this wonderful country, and all that is good and wonderful about it.

Selamat Hari Malaysia.

ED SOO,
Petaling Jaya.

Related posts:

Malaya, look east to boost Malaysian racial unity!    

Malaysia's future: A time for Malay renewal ! 

Malaysia still in pursuit of full independence  
The true meaning of independence 
Reviving our winning ways   

A neighbour underestimated

Tweet

Ceritalah by KARIM RASLAN

The buoyant statistics coming out of East Kalimantan underline the extent to which the once-poor neighbour has eclipsed Sabah. And until Sabahans can exorcise their ghosts, Indonesia will remain an untapped mirage.
Image via Wikipedia
WE are living in an age of tremendous financial turmoil. Currency and equity market gyrations have dramatically altered relations between nations and entire regions. Indeed, the decline of US and European competitiveness and the attendant acceleration of Chinese wealth have been the most note-worthy developments.

What is less well-documented is the fact that these trends have also led to significant changes within South-East Asia with China’s (and India’s) hunger for natural resources driving prices ever higher.
This is most apparent on the island of Borneo.

In 2010, the GDP per capita in Sabah was RM8,450. By way of comparison, the GDP per capita in the neighbouring Indonesian province of East Kalimantan (or Kaltim) was over US$4,000 (RM12,000).



While the Kaltim statistics are inflated by skyrocketing coal, as well as oil and gas prices, the reality shows a marked increase in living standards for the province’s 3.2 million people.

In fact, Kaltim’s booming economy is also contributing to Sabah’s shortage of labour for the plantation sector.

Meanwhile, decentralisation initiatives (dubbed regional autonomy) meant that a greater proportion of the natural resource bounty was being retained locally.

Kaltim is Indonesia’s largest producer of both coal and oil/gas. At the same time there are plans to increase palm oil planting to well over 1.5 million hectares.

Balikpapan – the premier commercial hub with a population over 600,000 – is also a major transport and services hub.

The city’s Sepinggan airport (with over five million passengers a year) is Indonesia’s fourth busiest.

The buoyant statistics coming out of Kaltim underline the extent to which the once-poor neighbour has eclipsed Sabah and indeed Malaysia.

This is all the more ironic given the fact that for many decades Sabahans have felt imperilled by what they’ve perceived as waves of “desperately poor” Indonesians and Filipinos pressing at their borders.

Indeed, the control (or lack of it) of migrant workers has been an enormously controversial issue in Kota Kinabalu.

Sabah’s exponential population growth – most notably in the 1980s when naturalisation policies (covert or otherwise) were at their most pronounced – witnessed a dramatic increase from 929,992 in 1980 to 1,734,685 in 1990.

Indeed, it is arguable that Sabahans have been traumatised by the massive influx of illegals.

The state’s indigenous communities have seen their demographic and political leadership whittled away.
Unsurprisingly, they are deeply suspicious of Indonesians and Filipinos.

All this has made it difficult for Sabah to leverage Indonesia’s current prosperity despite the state’s strategic location.

Sabah has very poor connectivity with Kaltim, so much so that even the lengthy land border lacks formal road crossings.

Still, Indonesians – including Awang Faroek, Kaltim’s Governor – are lobbying hard for a link at Serudong along the Tawau/Kota Kinabalu road.

In the absence of an overland crossing, hundreds of thousands of Indonesian workers in Sabah have been forced to travel by ferry through Tawau’s meagre and unimpressive port facilities.

By way of comparison, the Entikong crossing between Sarawak and West Kalimantan has become a major thoroughfare with countless buses plying the route linking Pontianak and Kuching.

Moreover, it is estimated that some 3,000 Indonesian students are currently studying in Kuching’s many private educational institutions.

At the same time, direct flights (on local carrier, Kalstar) linking the two cities have further enhanced connectivity and opportunities for businessmen on both sides of the border.

Kota Kinabalu and Balikpapan are like step-sisters. A journey between the two cities requires an awkward and time-consuming detour through either Kuala Lumpur, Singapore or Jakarta.

The alternative is the nerve-wracking ferry from Tawau to either Nunukan or Tarakan ... neither of which are particularly attractive for tourists or business travellers.

But Kota Kinabalu remains a superb destination.

With its waterfront lifestyle, schools, hospitals and international flights, the city is poised to become a popular hub for Indonesians – from as far away as Banjarmasin, Makassar, Samarinda and Manado.

It is worth noting that all four cities are beneficiaries of the natural resources boom and growing faster than the national average.

Indeed, other Malaysian cities such as Penang and Malacca have become adept at tapping the Indonesian demand for healthcare, education, housing and retail.

It remains to be seen whether the socio-political trauma of past decades could be overcome to allow Sabah to maximise these opportunities.

However, thankfully, some of Sabah’s leaders are beginning to recognise their neighbour’s vast potential.

Flamboyant former chief minister Datuk Harris Salleh has been a major promoter of the cross-Borneo linkages.

Last year, he undertook a highly publicised tour across Indonesian Kalimantan.

Similar sentiments are raised by Sabah Economic Development and Investment Authority CEO Yaakub Johari who confidently said: “History aside, we see Sabah acting as a conduit between an expanding Indonesia and the dynamic Northeast Asian markets.

“Enhanced connectivity whether by land, air or sea is a must.”

Until Sabah and Sabahans can exorcise their ghosts, Indonesia will remain an untapped mirage.