Malaysia passes ban on street protests

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Activist lawyers decry new law they say imposes tougher restrictions and penalties for demonstrators.  Malaysia passes ban on street protests - Asia-Pacific - Al Jazeera English Malaysia's lower house of parliament has approved a ban a on street protests after opposition legislators boycotted the vote and activists criticised the ban as repressive and a threat to freedom of public assembly. The law is expected to be enforced after parliament's upper house, also dominated by the ruling National Front coalition, approves it as early as next month. Najib Razak, the country's prime minister, has framed the bill as part of a campaign he launched in September to replace tough laws on security, speech and assembly in a bid to shore up support ahead of elections he is expected to call for next year. He defended the act on Monday, saying it guarantees the right to peaceful assembly and said the law prohibits public marches to avoid disruptions to general society. But it has been assailed by opposition politicians who call Najib's reforms an election ploy, and say the bill validates their fears that tough old laws will merely be replaced by strict new rules. Malaysian and international rights groups describe it as repressive because it bans street rallies and imposes tough restrictions and penalties for demonstrators. The law was announced only last week, and some critics say the vote was rushed without proper public consultation. About 500 lawyers and their supporters marched to parliament hours before the vote, urging lawmakers to reject the bill and chanting "freedom to the people'' before police stopped most of them from entering the complex. The new law would confine demonstrators mainly to stadiums and public halls. Depending on the venue, organisers may be required to give 10-day advance notification to police, who would determine whether the date and location are suitable. Children under 15 and non-citizens would be barred from attending rallies, which also cannot be held near schools, hospitals, places of worship, airports or gasoline stations. Demonstrators who break the law can be fined $6,200. VK Liew, a deputy Cabinet minister in Najib's office who received a protest note from the lawyers on Tuesday, suggested that critics should not be too quick to criticize the law. "We should look at it holistically, not piecemeal,'' Liew told reporters. Opposition reaction Anwar Ibrahim, the opposition leader, said he believed the Peaceful Assembly Act would be "more draconian'' than laws in Zimbabwe or Myanmar. Other opposition activists indicated they might challenge the law in court, insisting it breaches the people's constitutional rights. Amnesty International, the UK-based rights group, called the Peaceful Assembly Act "a legislative attack on Malaysians' right to peaceful protest,'' while Human Rights Watch said the law is being pushed through parliament with "undue haste". "The government must reject the bill as it infringes on the rights of the people and violates the constitution," said Wong Chin Huat of Bersih 2.0, which spearheaded a rally for electoral reform in July that was broken up by police. Lim Chee Wee, president of the Malaysian Bar Council, said the ban was "outrageous". "Assemblies in motion provide the demonstrators with a wider audience and greater visibility, in order for others to see and hear the cause or grievance giving rise to the gathering," he said. Critics including the Malaysian Bar Council and Human Rights Watch maintain the act would grant police too much power over the timing, duration, and location of gatherings. "This bill is a legislative attack on Malaysians' right to peaceful protest," Sam Zarifi, Amnesty's Asia-Pacific director, said in a statement. The ruling Barisan Nasional coalition has been accused of routinely using tough laws to block challenges to its five decades in power. Source: Al Jazeera and agencies

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Make Mandarin a compulsory exam subject

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Chua: Make Mandarin a compulsory exam subject

KUALA LUMPUR: The MCA will push for Mandarin to be made a compulsory Sijil Pelajaran Malaysia (SPM) paper for students in Sekolah Menengah Jenis Kebangsaan (SMJK).

Party president Datuk Seri Dr Chua Soi Lek said making the subject compulsory was important because there should be a minimum level of language proficiency for those wishing to teach in Chinese schools.
He added that the boards of SMJK nationwide were unanimous in their decision to request that the language be made a compulsory subject.

Dr Chua, however, said there would be a shortage of Mandarin teachers to teach the subject.

The party has directed its Youth chief Datuk Dr Wee Ka Siong, who is also Deputy Education Minister, to look into the matter.



Dr Chua hopes to see more students from independent Chinese schools joining teacher training colleges once the institutes begin accepting Unified Examination Certificate students.

He said this at a press conference after a meeting with representatives from the 78 SMJK school boards yesterday.

Dr Chua also urged the Education Ministry to look into reintroducing English Literature in schools to strengthen the command of English.

“Learning Science and Mathematics in English is good but as far as MCA is concerned, there is a need for literature to be reintroduced.”

On the criticism levelled against MCA's forum on hudud on Dec 4, Dr Chua said: “There is nothing wrong in educating my own members. We don't believe hudud will not affect the non-Muslims and we are holding this to educate them.”

He added that there were many educated people asking for more space for discussion.

“Why are they upset when we do a closed door forum? Does DAP or PAS have something to hide which makes them want to prevent MCA from holding its own forum within its own premises?” Dr Chua asked.

The forum will be held at Wisma MCA and is open to the public, although it is organised for party members.

Allah knows the best: Finding truth in fact and fabrication!

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Finding truth in fact and fabrication

Ikim Views
By Mohamad Azhar Hashim Fellow, Centre for Economics and Social Studies

Many Muslim scholars are still debating the authenticity of the expression ‘seek knowledge even as far as China’. While Muslims continue to be divided on this, China is fast becoming the largest economy in the world.

WHILE Muslims are engaging in a long debate whether the expression, “seek knowledge even as far as China” is really the words of the Prophet or a hadith, China has already emerged as the second largest economy in the world.

Economic experts made it official early this year that China has surpassed Japan to become the world’s second largest economy.

Indeed, the huge nation cannot wait any longer for Muslims to resolve their nagging debate on the authenticity of the expression and other trivialities, as toppling the United States as the largest economy in the world is now within sight.

Today, China’s economy is the fastest growing in the world, with the output growth rate in its Gross Domestic Product (GDP) growing consistently at an average 10% over the past 30 years.

China is currently the largest exporter and second largest importer of goods, as well as the world’s largest car market and the biggest energy consumer.

The significant growth in its investments, consumption and living standards is the result of its economic reforms initiated in the late 70s. The reforms have been successful in resolving poverty issues and driving China’s active participation in the global market.

China’s emergence in the world economy today not only has been made through the government but also through private companies.



Its currency, the renminbi or yuan, has become stronger and regarded as a benchmark currency for international transactions, especially on a regional basis.

Economic superpowers often feel threatened by the rising power of the yuan, accusing China that their currency brought about instability in the world trade.

For many years, Muslims have been debating on expression, whether it can be classified as authentic hadith or not. There were also disputes whether it was actually pronounced by the Prophet or just words of wisdom.

There have been differences in opinion. There are scholars who place this expression in the category of weak hadith (dhaeef), and there are also scholars who reject the expression as a hadith all together.

They opined that this expression was fabricated (mawdhu’) or fake words attributed to the Prophet, which means it was not the words of the Prophet at all, as there was no basis to claim so.

In addition, there are scholars who opined that even if this expression is an authentic hadith, it does not mean that there is an obligation for Muslims to seek knowledge in China in the literal sense.

In essence, Muslims are urged to seek knowledge related to Syariah or religious knowledge, even if it takes a person to faraway lands.

These opinions over the years may have had a psychological impact on Muslims, both in pursuing the type of knowledge and the position of China.

Muslims scholars may have found the truth that the expression is not from the Prophet, based on their study in the knowledge of hadith. As laymen, we are obliged to uphold and respect the opinion of the scholars.

However, imagine if Muslims did not engage in the debate on the authenticity of the expression but instead, acknowledge it, and act accordingly to the explicit intention of the message contained in the expression.

Who knows, today Muslims may have done well economically, and may have dominated the world economy in ways that could be superior than present advanced economies.

Whoever uttered or designed or fabricated the expression, “seek knowledge even as far as China” centuries ago, he was wise, as he probably saw the future vividly.

While Muslims have heard the expression for ages, and have been all the while arguing, debating and disputing it with different opinions, other nations have been building bridges with modern China and made an impact on the huge nation.

Indeed, China has successfully transformed its economy from an impoverished communist nation to an economic powerhouse. It has overtaken Europe and Japan, and is now set to take the number one position from the United States, which many economic experts believe can be achieved between 2020 and 2030.

While Muslims continue to embrace and subscribe to the words or expressions of wisdom of every visionary in the world without much hesitation, we still debate at length words of wisdom from visionaries of our rich intellectual civilisation. Only Allah knows best.

Moving to the next frontier of space programme

                      Image via Wikipedia

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MADE IN CHINA By CHOW HOW BAN

CHINA is moving in the right direction to build a 60-tonne space station around 2020.

On Nov 3, the unmanned Shenzhou 8 shuttle docked with Tiangong-1, which is China’s first space lab module, after travelling 343km in orbit.

The shuttle separated from the target spacecraft after 12 days and carried out its second docking on Nov 14. Two days later, Shenzhou 8 left Tiangong-1 and returned to Earth as scheduled.

News from the China Manned Space Engineering Office is that Tiangong-1 has continued its voyage at a height of 370km smoothly and transferred into a long-term operational mode.

The space lab module will wait for docking with the manned Shenzhou 9 and 10 sometime next year.

According to the office’s vice-director Wang Zhaoyao, during the flight of Shenzhou 8 its general biological experimental device functioned normally and 17 samples of Sino-Germany cooperative space life science experiments were recovered after the shuttle landed at the recovery site in Inner Mongolia.

He said Tiangong-1 had also carried out a series of experiments and tests as scheduled, including space-to-earth remote sensing exploration application experiment, space materials scientific experiment and space environment and physical detection tests.

“This space rendezvous and mission has fully realised its objective of ‘accurate entry into orbit, precise docking, stable assembly operation and safe return’.

“It marks a critical breakthrough for China’s space technology and set a milestone for our manned space development,” he told a press conference recently.

Wang said Tiangong-1, launched into orbit on Sept 29, was designed with a lifespan of more than two years and it would be well maintained until its following docking operations next year.

Under China’s space programme, after completing its first round of missions, Tiangong-1 will return to earth in 2013. It will be replaced by the larger Tiangong-2 and Tiangong-3 modules which will conduct more sophisticated space probes.



Tiangong-3 will probably be a 60-tonne full-size space station to be manned by astronauts.

The China’s Manned Space Engineering Office maintained that China is not working on the space station development alone and the country always welcomed other nations.

“We emphasise independent development but never said we want to develop in isolation. The development and operation of China’s space station are open to foreign colleagues and experts in the field on the principle of mutual respect and benefit, transparency and openness,” Wang said.

China has had fruitful space cooperation with Russia, Germany, France and other nations.

China would like to be involved in the building of the International Space Station together six other space agencies but because of various reasons, China remains excluded from the programme, he added.

He also refuted claims that China’s manned space programmes had military functions.

“We can say that none of the eight Shenzhou missions had direct military applications. But, we all know that space-related technological developments can be used in civilian and military sectors.

“For example, a communications satellite can be used for TV broadcasting and military communication. So it depends on what you use it for,” he added.

Wang hoped that critics would be responsible and fair when criticising China’s space programmes.

“The United States and some media have been criticising our space exploration programme and development saying is not transparent enough. First of all, they have to be fair in their comments.

“Last year, I accompanied Nasa administrator Charles Bolden for a tour of our space programme facilities, laboratories and launching centres in China. He was pleased on how transparent we were,” he said.

China’s space programme consists of three stages. Phase 1 saw the historic launch of the unmanned Shenzhou 1 shuttle in 1999 for missions to conduct space experiments. It was followed by the launch of Shenzhou 2, Shenzhou 3, Shenzhou 4, Shenzhou 5, Shenzhou 6 and Shenzhou 7.

The Shenzhou 7 mission, China’s third manned spacecraft, was the most historic when Chinese astronaut Zhai Zhigang became the first man from China to do a spacewalk on Sept 27, 2008. It marked a successful extra-vehicular activity (EVA) mission for China.

Phase 2 began with the launch of the Tiangong-1 space module. One of the main missions during this phase will be the docking of a manned space shuttle with the space lab.

The space programme administration will decide between Shenzhou 9 and 10 which one will be manned by China’s first female astronaut next year.

Related posts:

China's Great Leap to Space Industry 

China completes nation's first space docking 

China's space station program  

Recipe for innovation

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AirAsia CEO and others give you recipe for innovation

By LIZ LEE lizlee@thestar.com.my

KUALA LUMPUR: What fosters the spirit of innovation? The answers point to an encouraging environment and putting Malaysia into context, there is much to be done at the home, education and corporate levels to create an environment fertile for sowing the seeds of unconventional thinking.

That was the main take-away from the second Merdeka Award Roundtable last week, featuring group chief executive of AirAsia Bhd Tan Sri Tony Fernandes, Malaysian Invention and Design Society president Tan Sri Dr Augustine Ong Soon Hock and Universiti Teknologi Malaysia (UTM) vice-chancellor Prof Datuk Dr Zaini Ujang.

The award was founded by energy companies Petronas, ExxonMobil and Shell in 2007 where award recipients will receive a certificate and RM500,000 cash award for each of five categories.

“(Innovation) is not something you can teach or programme. It is creating a lot of little ecosystems to make sure (the environment is right) and culture does play a part in this,” Fernandes said, kicking off the discussion on “Cultivating a culture of innovation in challenging times.”

 

Sharing ideas: (from left) Zaini, Ong and Fernandes at the second Merdeka Award Roundtable. The discussion was hosted by Astro Awani’s Norina Yahya

Of the education system, Fernandes said the focus on books had overwhelmed the development in other areas that build thought leaders.

“When we look at some of the great leaders, they are all rounded. Our schools have lost a lot by focusing on academics only,” he said.

Fernandes believed that while the Government should foster innovation as well as trust the people and allow ideas, education is the key to take Malaysia to the next level. He opined that bringing back arts, culture and sport would change the way the future generation thinks.



“A successful education system should be about bringing out the best in children and giving them the ability to experiment and try all sorts of things and turn that raw diamond into a polished diamond,” he said.

As a parent, he believed that it was important to “expose the children to as many things as possible and allow them to go where they want.”

At the corporate level, he added that there was also a culture of subordination in Malaysia that hampered creative output: “When you go against the norm in Malaysia, you can be whacked. It's sometimes seen as insubordinate or questionable when you challenge the norm.”

“That's the culture. Malaysians are an innovative lot but sometimes we need to praise innovation by creating the environment,” he said, adding that the success stories of Malaysian innovation were not sung often enough.

“We don't hear enough of the success stories. A lot of our technology came from Malaysians and we need to show that the commercialisation of these ideas have come to fruition,” he said.

During the discussion, Fernandes also revealed that the flat structure in AirAsia's management was the “secret weapon” for its success in the industry. He said that communication flow relied on organisation structure.

“If you have a hierarchical organisation, the people who have ideas are sometimes too scared to speak up. (But) it's all right to give ideas, it's all right to talk,” he said of the potentially stifling hierarchical organisation structures in many Malaysian companies.

“I always say I would rather have 9,000 brains working with me than just 10,” he said, adding on that “if you create an environment where everyone feels equal and there's freedom of expression (among all levels of employees), that provides a very powerful machine.”

However, innovating per se should not be the end goal too.

Ong, who is also a former member of the Merdeka Award Health, Science and Technology Committee, said there needed to be market-driven innovations to encourage worthwhile creations.

“When you have innovation for a market that is not ready for it, that becomes a problem,” he said.

“We should also look at what our country has a niche in. We should concentrate on areas where we already have good industries going on where innovation can bring some results,” he added, saying that foreign areas like nuclear energy may not be an ideal area to innovate since the country had yet to develop its know-how and infrastructure.

In terms of getting academicians engaged with market-centric needs, Zaini said UTM had a professorship scheme with Proton Holdings Bhd where professors were positioned at the company to spur on-the-ground projects with the staff.

“We target to have 100 patents under Proton per year from this industrial PhD,” the former Merdeka Award recipient said, highlighting the university's market-relevant endeavours through the reverse flow of ideas from the market into academia.

The roundtable will be broadcast on Astro Awani in early December.

Think global or you lose out ! Malaysians consumed too much with local affairs!

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ONE MAN'S MEAT By PHILIP GOLINGAI

They (Malaysian businessmen) don’t think global. They don’t want to even think Asean. For them, they are in a comfort zone and it is enough to do business in Malaysia.

NINE years ago, Datuk Ilyas Mohamed’s businessmen friends laughed when he asked them to invest in Indonesia.

“Malaysian economy was at its best until 10 years ago. We were at the peak. After that, it started to go down,” recalled the Cartrade Group executive chairman.

And Ilyas decided to enter the Indonesian market. His first deal was to buy Mandala Airlines.

The deal, however, fell through when a Singaporean company outbid his group. It put more money on the table.

But the setback did not discourage him.“I am very fortunate as I have a business partner there, who is one of the richest men in Indonesia,” noted the 50-something businessman.

His silent partner is a low profile multi-billionaire (we’re not talking about rupiahs but in US dollars).

“He is by name my partner. But he is not interested in my business as it is too small for him. Half of Jakarta belongs to him,” Ilyas related.

(Who? Google: Artha Graha Group.)

Now, 20% of Ilyas’ business is in Malaysia and the rest overseas, mostly in Indonesia; coal mining in Kalimantan and property development in Surabaya and Jakarta.

And his friends, who laughed at him as they thought he would be conned in Indonesia, are now following his footsteps.

“Indonesia is THE market. They have 245 million people. Can you go wrong in a market with 245 million people? And the Indonesian Govern­ment welcomes Malaysian companies,” he explained.

“There are a lot of opportunities in Indonesia. They are not even developing. They are just about to develop. If you go in now it is the best time. You can’t piggy back when they are (already) up there.”

Ilyas, however, cautioned:

“Of course, the important thing is to find the right partner. Many people go there and find the wrong partner, they get conned and then they say Indonesians are ‘penipu’ (conmen).”

The Malaysian market is small as the country’s population is 28 million.



“You can do small business (in Malaysia). But if you want to think big, you have to go out (of Malaysia),” the businessman said.

How big is Indonesia?

“Out of the 245 million Indone­sians, about 10% are super rich and that’s the total population of Malaysia,” Ilyas said.

How rich is “rich”?

“Oh, they are very, very rich,” he said and gave a figure (in ringgit) which I thought was unbelievable.
The thing with Malaysians, according to Ilyas, was we think small.

“They don’t think global. If not global then think Asean.

“But, they don’t want to even think Asean,” he said.

“For them, they are in a comfort zone. Sudahlah (it is enough) to do business in Malaysia.”

Most Malaysian businessmen (and we are not talking about the bosses of CIMB etc) do not want to venture.

For example, Ilyas said, “Sri Lanka is a good market now. Their trade minister, chief justice and banker (with a bank equivalent to Maybank) came down to talk to our businessmen. But they were not interested.”

It is the opposite for Singapore entrepreneurs. With their rock solid Singapore dollar, they are rushing into Sri Lanka.

“They know that their local base is small and they have to do business outside of Singapore,” he said.

The Philippines’ economy is also booming.

“Over the past 30 years, Filipinos are fed up with politics. And they work and work, building the economy themselves. And if we are not careful, we might be sending maids to the Philippines soon,” Ilyas said.

It is politics as usual in Malaysia.

“Instead of coming up with ideas on how to create business opportunities, our politicians come up with all sort of (political) issues,” Ilyas contended.

“They are creating issues for cheap publicity. For example, you can take 10 Chinese, 10 Indians and 10 Malays and sit them down together and there will be no racial issue among them.

“But it is the politicians and not the rakyat that come up with all sort of racial issues.”

“How to be a global player when you are thinking of politics 24 hours a day?”

Ilyas flies in and out of Indonesia spending about 15 to 16 days a month in that country.

So I asked: “Why don’t you relax and do business in Malaysia?”

His eyes gleamed. “Of course as a businessman, you are an opportunist. When you see so much of opportunities (in Indonesia) you just can’t resist.”

Ilyas assures that the Indonesian market is not as hostile as its fans during an Indonesia vs Malaysia football match.

Consumed with local affairs

One Man's Meat By PHILIP GOLINGAI

The Philippines looms as the next big Asean entity and Indonesia is the place to ‘park’ one’s money, but we would rather not know that the barbarians are at the gate.

THE barbarians are at the gate and yet Malaysians are more fixated with whether a mentri besar was caught for khalwat with a girl from Pasir Panjang.

Not true, says the MB. But tongues still wag.

Perhaps we should be more concerned with the fact that the Philippines will be the next big thing in Asean.
I remember reading a report saying that if we are not careful, in two decades or so we will be sending maids to Manila.

The thing about us is we are more consumed with domestic affairs than foreign happenings.

Yes, from my Twitter timeline, Malaysians are also interested in the fact that former president Gloria Macapagal Arroyo was arrested on charges of fraud and Muammar Gaddafi’s son Saif al-Islam was captured.

But we are more intrigued with when Parliament will be dissolved, and whether Parti Kita president Datuk Zaid Ibrahim will contest in Petaling Jaya Utara or Petaling Jaya Selatan.

I, too, am guilty of paying too much attention to local politics and not enough to global issues.

Yes, I’m aware of the eurozone debt crisis. But don’t ask me to get into specifics.

However, I’ve become a specialist on Kedah Gerakan Youth chief Tan Keng Liang’s challenge to DAP publicity secretary Tony Pua: he will consume a mug of Kedai Rakyat 1Malaysia’s (KR1M) Chocolate Malt if the Petaling Jaya Utara MP donates RM1,000 to charity.

The challenge came after Pua claimed that KR1M’s 1Malaysia Growing Up Milk contained eight times the permitted amount of Vitamin A and was missing essential nutrients such as Omega 3, Vitamin B1, Vitamin D, Vitamin C and folic acid.

There was so much excitement in TwitterJaya (the moniker of the Malaysian twittersphere) over the issue, with some twitterers milking the issue with clever tweets such as “Pray for @TanKengLiang because he is going to drink 1Malaysia Choco Milk”.

Another big issue on TwitterJaya has spawned the mother of all puns and has also something to do with milk.

So syiok I was to absorb these comments like SpongeBob SquarePants, until I read a tweet by @Art_Harun (the lawyer) on Wednesday.

He tweeted in Malay: Malaysian politics – last month it was about molesting breast, this month it is about cows. When will we discuss the maximum impact of the eurozone on our economy?

Ouch. Time to come out from under my coconut shell.

So I decided to find out what the barbarians (Malaysia’s foreign rivals) were up to.

On Friday, I met a 20-something think-tank director at Coffee Bean in Bangsar Village to pick his brain.

The cerebral hotshot, who wants to keep a low profile at the moment, listed three challenges that Malaysia faces.

“Population wise, we are too small. We have a population of 28 million. Compare that with Indonesia’s 245 million, Thailand’s 66 million and the Philippines’ 103 million,” said the animated man, still wearing his maroon Friday prayer shirt.

“In terms of economies of scale, our enterprises will not grow so big because our market is small. We don’t have any option but to invest outside.”

Malaysian enterprises, he said, should think Asean to survive and grow.

“We should be on the forefront of ‘big’ Asean,” he explained.

He noted that Malaysian companies such as CIMB and Khazanah were investing in vibrant Indonesia, the country to “park” one’s money.

And through Twitter, he understands how important Indonesia is to the United States by reading the tweets of the American ambassador to Jakarta.

“Food security,” he said. “Many Malaysians do not realise that Malaysia imports almost everything – rice, fish and even chilli.

“Imagine chilli! I did not know that we imported chilli until I attended a briefing by Pemandu (Performance Management and Delivery Unit).  
    
“We are also overly dependent on foreign workers. Free movement of people is important in a globalised world.

“But certain industries, such as palm oil and construction, should train Malaysians to work in these sectors.

“Suddenly they are finding it difficult to recruit Indonesian workers as that country’s economy is booming. Indonesians would rather work in Malaysian-owned palm oil plantations in their own country than in Malaysia.”

Note to myself: download the Economist iPad edition that has, as its cover story, “The magic of diasporas: Immigrant networks are a rare bright spark in the world economy”.

In the meantime, I wonder what will happen to Tan should he drink the 1Malaysia Chocolate Malt.

Housing supply and demand – are we nearing equilibrium?

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REALTY CHECK By DATUK ABDUL RAHIM RAHMAN

Is there any equilibrium point in housing market, considering the many factors influencing demand and supply?

The main determinants of the demand for housing are demographic. Population size and population growth are the core demographic variables. However, family size, the age composition of the family, the number of children, net migration, non-family household formation, the number of double family households, death rates, divorce rates, and marriages are other demographic variables that would influence demand for housing. Other factors such as household income, price of housing, cost, availability of credit, consumer preferences, investor preferences, price of substitutes and price of complements all play a role in determining demand for housing.

Income is an important determinant of demand as shown by a study conducted by De Leeuw in 1971 that showed positive income elasticity of demand in North America ranging from 0.5 to 0.9, meaning the market demand for housing grew as real income rose. The price of housing is also an important variable influencing demand for housing, where in terms of elasticity just like any normal goods it is negative increase in price will result in decrease in demand.

As for supply, the quantity of incoming supply is typically influenced by cost, price of existing stock of houses, and the technology used in the construction, where material costs tend to contribute the largest share of the construction cost, about 30% to 40%. In the short run, supply tends to be very price inelastic increase in cost will have less effect on supply. However, over a longer period, it tends to be very price elastic increase in cost will lower supply.

A study conducted by Fallis in 1985 showed price elasticity of supply was estimated at 8.2, indicating increased in cost would lower supply significantly. The degree of elasticity depends on the elasticity of substitution and supply restrictions. For example, the use of capital intensive technology has been employed to reduce the rising labour cost, thus having less impact on the supply of housing.

As at first half of 2011, Malaysia had 4,466,062 units of housing, an increase of 1.7% from the total of supply in the first half of 2010. About 24,709 units were completed in the first half of 2011, a lower number compared to 50,611 units completed in the first half of 2010. Kuala Lumpur and Selangor accounted for 6,567 units or 27% of the total new stock. Kuala Lumpur and Selangor had 414,436 and 1,285,192 homes, reflecting an increase of 2.0% and 1.7% respectively from the total as of first half of 2010.



Other states which showed significant number of units completed are Sarawak (2,612), Penang (2,507) and Perak (2,184). The incoming supply in the country was recorded at 560,636 units, where Selangor is the largest contributor (134,143 or 24% of the total) followed by Johor (76,429 or 14%) and Negri Sembilan (65,227). Kuala Lumpur has 39,656 units coming on stream.

In terms of transactions recorded as of first half of 2011 for the country, there were 133,984 transactions in the residential category, out of which the largest transacted numbers were priced in the range of RM100,000 to RM150,000, which accounted for 22,857 units, followed by units priced between RM250,000 and RM500,000, which accounted for 21,559 units.

Selangor recorded the highest number of transactions at 38,424 units, followed by Johor (15,015 units), Penang (13,832 units), and Kuala Lumpur (11,522 units). The most popular units transacted in Selangor, Kuala Lumpur, and Penang were for units priced between RM250,000 and RM500,000, while in Johor, the highest transactions recorded were for units priced between RM100,000 and RM150,000.

This brief analysis gives an indication that the total number of units coming into the market needs to be in line not only with the level of affordability of potential buyers in the area the projects are to be launched but also the demographics of Malaysian population.

As of July 2010, total population was estimated to be 28.25 million and the population is expected to grow at a rate of 2.4% per annum, where about 65% of the population is urban population. Today, less than 4% of Malaysians live in poverty and it is estimated that about 2.0% of the total urban population in Malaysia lives below the poverty line, earning monthly household income of equal or less than RM750. Low income households (earning income equal or less than RM2,000 per month) represents 75% of the median income in Malaysia.

The national average household income is estimated at RM4,000 per month. It should also be noted that about 65% of Malaysia's population is below the age of 35, thus there would definitely be strong demand for housing.

Due to continuous movement in the factors affecting supply and demand for housing, policy intervention is necessary to ensure that the majority of the population has equal access to own homes. Singapore's public housing policy is often cited as the most successful example of affordable housing provision in Asian cities. A study conducted in 2000 estimated that about 85% of the total population lived in public housing with nearly 95% of them owning the flats they occupied.

By centralising its public housing effort under a single authority, Housing Development Board, Singapore has circumvented the typical problems of duplication and fragmentation of duties, and bureaucratic rivalries associated with multi-agency implementation. This centralised function also serves as a mechanism to ensure supply and demand are checked.

It is hoped that the provision of affordable homes as announced in Budget 2012 would achieve its main objective of increasing home ownership among the majority of the population.

Senator Datuk Abdul Rahim Rahman is the executive chairman of Rahim & Co group of companies.