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Monday, 5 June 2017

Trump-Washington disorder drags world down, lost humanity's fight for survival against climate change



https://youtu.be/jP55meWlLt4

IN Washington, the swamp Donald Trump is trying to drain is in tumult. The centres of the established order are fighting back against the elected president with a mandate who is doing what he wants.

On the one hand, there is a system of governance based on the rule of law which accords rights and limits the exercise of power. On the other, a president with a style of rule that transcends and challenges that order.

Whether it is working with the enemy, government by executive order, unrestrained authority in a centralised executive arm, president Trump who is already temperamentally in accord with it feels fully supported by those marginalised and on the periphery who had elected him. He sees it as a battle against the elites. Indeed, he increasingly depicts himself as a victim of the elites, especially the media.

The media wants him impeached. This is not going to happen – at least, not any time soon. The Republican-dominated House of Representatives and Senate would not have it. But Trump has to understand he cannot continually push at the boundaries and violate constitutional authority with impunity. If not Congress, the courts will have him.

Fired FBI director James Comey is expected to appear before the Senate to relate if Trump tried to influence investigation into links with Russia he and his aides forged during and after the election campaign. Already, a special counsel, Robert Mueller, has been appointed by the Attorney-General’s office to establish if there had been criminal violations in those links.

The American president is impetuous, sneering and always up for a fight. This is not the way to govern – anywhere.

He chops and changes. He does not use established institutions, even of the executive branch, like the State Department, which he wholly distrusts as a Hillary Clinton bastion.

There is conflict in Washington, not orderly governance. America is bitterly divided. Trump represents the other side. In this conflict, it is a strong incentive for Trump to ride on populist policies to attack his enemies in the swamp in Washington.

Both the disorder in Washington and particularly the populist policies – many of which are not properly thought through – also have an impact on the rest of the world.

It is difficult to know whom to deal with and which way policies may turn. His “America First” policies, like on climate change and on trade, harm and disregard other countries.

Small countries like Malaysia are down the list of his concerns. Yet we are on the list of 16 with whom the Trump administration claims America has trade deficits which are not tolerable.

The cut-off value of US$10 billion just manages to leave out Israel from the black list. What countries like Malaysia would like to know is what the United States proposes to do about it.

With respect to China, which tops the list with a whopping surplus of US$347 billion, Trump has eased from hanging tough to being pliable. No more talk of China as a serial currency manipulator and of slapping a 45% tariff on Chinese exports to America.

Last month the US entered into a so-called trade deal with China which encompassed a 100-day programme as part of a “comprehensive economic dialogue.” There is to be a 10-point action plan covering topics ranging from meat to financial services to biotechnology.

But American companies are dissatisfied, contending matters such as overcapacity, forced technology transfer and equal treatment of US companies should have been covered.

White House professionals in the National Economic Council and the US Trade Representative’s office say there is work in progress on Chinese steel, after which the administration would decide how to pursue the matters of subsidies and overcapacity – either through the World Trade Organisation (WTO) or bilaterally.

This is an interesting twist. Trump does not have any time for the WTO. Yet with China, he might go for the multilateral approach rather than his favoured bilateral dealing.

The officials say they do not want a trade war. So perhaps some sobriety is sinking in.

Meanwhile, Vietnamese Prime Minister Nguyen Xuan Phuc made haste to Washington this week – Vietnam is sixth in that list of 16 – and ended up with extravagant praise from Trump for the deals he entered into worth US$8bil (the prime minister claimed US$15bil), including US$3bil of US-produced content that would support 23,000 jobs. General Electric is the biggest beneficiary with deals worth US$5.58bil in power generation, aircraft engines and services.

Commerce Secretary Wilbur Ross pronounces Vietnam is the fastest growing market for US exports. US Trade Representative Robert Lighthizer is deeply concerned about the rapid growth of the trade deficit with Vietnam (2016: US$32bil). Phuc gets the double squeeze in the firm handshake with President Trump. One must hope he knows where he stands at the end of his visit last Wednesday.

Phuc was the first Asean leader to visit Washington since Trump’s election as president. Philippines president Rodrigo Duterte has not taken up Trump’s invitation. Neither has Thailand’s Prime Minister Prayut Chan-o-cha.

Apart from a report that the Vietnamese prime minister said he was waiting to welcome Trump to Danang for the Apec summit in November, and a statement he made expressing disappointment that America had withdrawn from the Trans-Pacific Partnership, there has been no indication that anything pertaining to Asean had been raised – apart, of course, from Vietnam’s position on the South China Sea.

This is the way of Asean. National concerns and the national interest come first. There is not even some kind of debriefing or discussion on or before a visit of such import. Such a shame.

Perhaps Malaysia should take the lead and try to make a difference. As Trump will be coming for the Asean summits in Manila, including US-Asean and the EAS, would it not make sense to prepare a regional position paper on trade with the US?

We can leave the South China Sea issue pretty much alone as it divides more than unites Asean. But surely there must be consensus on free trade, as the AEC is founded very much on that principle.

Should not Asean take a common position on free trade in discussion with the American president? Not one based on generalities but on specifics and benefits, including to those on the supply chains (in terms of employment, revenue and taxes) before imports reach the US destination, not to mention the benefits to consumers in respect of choice, price and inflation.

Instead of just all the normal niceties, could not the leaders meeting incorporate a short, sharp presentation on the benefits of free trade to America and the costs to its economy of subsidy, support and inefficiency?

Already, it has been estimated about three quarters of job loss in America is attributable to employment displacement through technological development. Not through exports to America.

Everyone wants that 20 minutes with Trump. Asean should not fritter it away with amiable general chatter.

Of course, Malaysia has its own particular issues with the US which could be raised in a visit by the prime minister, perhaps at the end of the year or early next year.

By that time, of course, the 90-day “investigation” into the surpluses of countries on the list of 16 (Malaysia’s US$25bil puts it ninth on that list), which technically began on April 7, would have been completed.

There would be plenty to discuss then, even as bilateral representations would have been made at the working level before and after expiry of that period and whatever subsequent American actions.

Other issues, of course, are outstanding on which views can be exchanged, including on investment and technology. Hopefully, by that time, things would have settled down, that sense can be made out of the disorder in Washington.

Tan Sri Munir Majid, chairman of Bank Muamalat and visiting senior fellow at LSE Ideas (Centre for International Affairs, Diplomacy and Strategy), is also chairman of CIMB Asean Research Institute.

By Tan Sri Dr Munir Majid

Tan Sri Dr Munir Majid, chairman of Bank Muamalat and visiting senior fellow at LSE Ideas (Centre for International Affairs, Diplomacy and Strategy), is also chairman of CIMB Asean Research Institute.


Continuing the climate battle, without the US


https://youtu.be/vDyZy-VRyAY

With President Trump pulling out from the Paris agreement, the US has lost membership of the community of nations that subscribe to humanity's fight for survivial against climate change.


SO in the end President Donald Trump deci­ded to pull the United States out from the Paris Agreement on climate change.

Just as disturbing as the withdrawal was Trump’s speech justifying it. He never acknowledged the seriousness or even the existence of the global climate change crisis, which poses the gravest threat to human survival. He lamented that the Paris accord would displace US jobs, mentioning coal in particular, while ignoring the jobs in renewable energy that would increase manifold if the United States tackled climate crisis seriously.

His main grouse was that the Paris agreement was “unfair” to the United States vis-a-vis other countries, especially mentioning China and India. And he grumbled that the United States would have to contribute to the Green Climate Fund.

The speech was riddled with misconceptions and factual errors.

For example, Trump said the Paris agreement would only produce a two-tenths of one degree Celsius reduction in global temperature by the year 2100, a “tiny, tiny amount”.

But scientists from the Massachusetts Institute of Technology said Trump badly misunderstood their study. “If we don’t do anything, we might shoot over five degrees or more and that would be catastrophic,” said MIT’s programme co-director John Reilly.

Condemnation came fast and furious from within the United States and around the world. Said John Kerry, former Secretary of State: “He’s made us an environmental pariah in the world ... It may be the most self-defeating action in American history.”

The Trump decision to leave Paris may well be a milestone marking an immense loss to the United States of international prestige, influence and power.

In a world so divided by ideology, inequality and economic competition, the Paris agreement was one rare area of global consensus to cooperate, on climate change.

For the United States to pull out of that hard-won consensus is a shocking abdication not only of leadership, but of its membership of the community of nations in its joint effort to face its gravest threat to survival.

The lack of appreciation of this great challenge facing humanity and the narrow-mindedness of his concerns was embarrassingly evident when Trump made his withdrawal speech.

He was more interested in reviving the sunset coal sector than in the promise of the fast-developing renewable energy industries.

He was convinced reducing emissions would cost millions of jobs, ignoring the record of other countries that have decoupled emissions growth from economic growth.

He was miserly towards poor countries which are receiving only a fraction of what they were promised for climate action, while celebrating hundreds of billions of dollars of new armaments deals.

He complained that the United States is asked to do more than others, when in fact the nation has the highest emissions per ca­pita of any major country and its pledges are significantly lower than Europe’s.

He saw the speck in everyone else’s eyes while being oblivious to the beam in his own.

With or without the United States, the negotiations on how to implement the agreement will continue in the years ahead.

A complication is that America has to wait four years before the announced withdrawal can come into effect.

The United States will still be a member of the Paris agreement for the rest of Trump’s present term, although he announced he will not implement what Barack Obama had committed to, which is to cut emissions by 26%-28% from 2005 levels, by 2025. This defiance will likely have a depressing impact on other countries.

While a member, the United States could play a non-cooperative or disruptive role du­ring the negotiations on many topics.

Since Trump has already made clear the United States wants to leave the pact, and no longer subscribes to its emissions pledges, nor will it meet its US$3bil (RM12.8bil) pledge on the Green Climate Fund, it would be strange to enable the country to still negotiate with the same status as other members that remain committed to their pledges.

How to deal with this issue is important so that the United Nations Framework Conven­tion on Climate Change negotiations are not disrupted in the four years ahead.

Finally, Trump’s portrayal of developing countries like India and China as profiting from the US membership of the Paris Agreement is truly unfair.

China is the number one emitter of carbon dioxide in absolute terms, with the United States second and India third. But this is only because the two developing countries have huge populations of over a billion each.

In per capita terms, in 2015, carbon dioxide emissions were 16.1 tonnes for the United States, 7.7 tonnes for China and 1.9 tonnes for India.

It would be unfair to ask China and India to have the same mitigation target as America, especially since the United States has had the benefit of using or over-using more than its fair share of cheap fossil-fuel energy for over a century more than the other two countries.

A recent New York Times editorial (May 22) compared the recent performance of India and China with the recent actions of the United States under President Trump.

It states: “Until recently, China and India have been cast as obstacles ... in the battle against climate change. That reputation looks very much out of date now that both countries have greatly accelerated their investments in cost-effective renewable energy sources – and reduced their reliance on fossil fuels. It’s America – Donald Trump’s America – that now looks like the laggard.”

President Trump has taken the United States and the world many big steps backwards in the global fight against global warming. It will take some time for the rest of the world to figure out how to carry on the race without or despite the United States.

Hopefully the absence of America will only be for four years or less.

By Martin Khor

Martin Khor is executive director of the South Centre. The views expressed here are entirely his own.


Anger as Trump announces US withdrawal from global climate deal



WASHINGTON: President Donald Trump announced America’s shock withdrawal from the Paris climate accord Thursday, prompting a furious global backlash and throwing efforts to slow global warming into serious doubt.

In a sharply nationalistic address from the White House Rose Garden, Trump announced the United States would immediately stop implementing the “bad” 195-nation accord.

“I cannot, in good conscience, support a deal that punishes the United States,” he said, decrying the “draconian financial and economic burdens the agreement imposes on our country.”

Trump repeatedly painted the pact — struck by his predecessor Barack Obama — as a deal that did not “put America first” and was too easy on economic rivals China, India and Europe.

“I was elected to represent the citizens of Pittsburgh, not Paris,” he said. “We don’t want other leaders and other countries laughing at us anymore. And they won’t be.”

Trump offered no details about how, or when, a formal withdrawal would happen, and at one point suggested a renegotiation could take place.

“We’re getting out but we’ll start to negotiate and we will see if we can make a deal that’s fair. And if we can, that’s great. And if we can’t, that’s fine,” he said.

That idea was unceremoniously slapped down by furious allies in Europe, who joined figures from around the United States and the world in condemning the move.

“The agreement cannot be renegotiated,” France, Germany and Italy said in a joint statement.

Worst polluters

The United States is the world’s second largest emitter of greenhouse gases after China, so Trump’s decision could seriously hamper efforts to cut emissions and limit global temperature increases.

Amid Trump’s domestic critics was Obama, who said the United States was “joining a handful of nations that reject the future.”

Nicaragua and Syria are the only countries not party to the Paris accord, the former seeing it as not ambitious enough and the latter being racked by a brutal civil war.

Hillary Clinton, Trump’s opponent in last year’s White House race, called the decision to pull out a “historic mistake.”

“The world is moving forward together on climate change. Paris withdrawal leaves American workers & families behind,” she said in a tweet.

The Democratic governors of New York, California and Washington states formed a quick alliance, vowing to respect the standards agreed on under the Paris deal.

In New York, some major buildings, like the World Trade Center and City Hall, were lit green in solidarity with the climate agreement, echoing a move in Paris.

With much of the implementation of the accord taking place at the local level, the Paris accord’s supporters hope the deal will be in hibernation rather than killed off entirely.

Trump’s decision is likely to play well with the Republican base, with the more immediate damage on the diplomatic front.

The US president called his counterparts in Britain, Canada, France and Germany to explain his decision.

But traditional US allies were uncharacteristically blunt in their condemnation of the move, which comes amid already strained relationships with the hard-charging president.

Germany said the US was “harming” the entire planet, and European Commission President Jean-Claude Juncker called the decision “seriously wrong.”

Trump the showman

Ever the showman, the 70-year-old Trump had given his decision a reality TV-style tease, refusing to indicate his preference either way until his announcement.

Opponents of withdrawal — said to include Trump’s daughter Ivanka — had warned that America’s leadership role on the world stage was at stake, along with the environment.

A dozen large companies including oil major BP, agrochemical giant DuPont, Google, Intel and Microsoft, had urged Trump to remain in the deal.

Ultimately, the lobbying by Trump’s environmental protection chief Scott Pruitt and chief strategist Steve Bannon urging the president to leave won out.

In the wake of the announcement, Tesla and SpaceX boss Elon Musk and Disney chief Robert Iger announced they would no longer take part in presidential business councils.

“Climate change is real. Leaving Paris is not good for America or the world,” Musk said.

GE head Jeff Immelt said he was “disappointed” with the decision: “Climate change is real. Industry must now lead and not depend on government.”

'Morally criminal'

White House officials acknowledged that under the deal, formal withdrawal may not take place until after the 2020 election.

Hours ahead of Trump’s announcement, China’s Premier Li Keqiang pledged to stay the course on implementing the climate accord in a joint press conference with German Chancellor Angela Merkel, and urged other countries to do likewise.

China has been investing billions in clean energy infrastructure, as it battles to clear up the choking pollution enveloping its cities.

China and the US are responsible for some 40 percent of the world’s emissions and experts had warned it was vital for both to remain in the Paris agreement if it is to succeed.

The leader of Asia’s other behemoth, Indian Prime Minister Narendra Modi — who is due to visit the White House shortly — has said failing to act on climate change would be “morally criminal.”

Trump’s announcement comes less than 18 months after the climate pact was adopted in the French capital, the fruit of a hard-fought agreement between Beijing and Washington under Obama’s leadership.

The Paris Agreement commits signatories to efforts to reduce greenhouse gas emissions that cause global warming, which is blamed for melting ice caps and glaciers, rising sea levels and more violent weather events.

They vowed steps to keep the worldwide rise in temperatures “well below” two degrees Celsius (3.6 degrees Fahrenheit) from pre-industrial times and to “pursue efforts” to hold the increase under 1.5 degrees Celsius.

Sources: Andrew Beatty | AFP
 
Related links

Analysis: Trump tilts 'America First' toward 'America Alone' - AP News


What concerns Malaysians most ?

Supermarket shopping food

THE biggest concern among Malaysians, as we head towards the general election, is the cost of living. It’s as simple as that.

There have been plenty of political and religious side shows, but for many Malaysians, regardless of race, settling the many bills each month is what worries them the most.

Although Malaysia remains one of the cheapest countries to live in, its citizens have been spoilt for too long.

We are so used to having so many food items subsidised, including sugar, at one time, to the point that some of us have had difficulties adjusting ourselves.

Our neighbours still come to Malaysia to buy petrol, because ours is still cheaper than theirs.

But, as in any elections, politicians will always promise the heavens to get our votes. One of the promises, we have already heard, is the abolishment of the Goods and Services Tax.

No doubt that doing away with GST would appeal to voters, but seriously, even the opposition politicians calling for this are aware that it is a counter-productive move.

In the words of Tan Sri Mohd Sheriff Mohd Kassim, a highly-respected retired government servant, “it is too much of a fairy tale.”

The danger, of course, is that populist electoral pledges are always appealing, even if they are not rational.

Malaysia cannot depend on just about two million tax payers to foot the bill in a country of over 30 million people. It is unfair and unsustainable.

Taxing consumption gives more stability to revenue because income tax is regarded as highly volatile, as it depends very much on the ups and downs of businesses, according to Mohd Sheriff. When the market is soft, revenue collection always sees a dip.

For the government, which has already been criticised for having such a huge civil service, without GST, it could even mean its workers may not get paid when there is a downturn in the economy.

In the case of Malaysia, we have lost a substantial amount of revenue following the drop in oil price.

So, when politicians make promises, claiming plugging leakages is sufficient to end GST, it is really far-fetched and irresponsible.

The Malaysian tax system needs to continue to be more consumption-oriented to make it recession-proof, and, more importantly, the tax net just has to be widened. The bottom line is that, it is grossly unfair for two million people to shoulder the burden.

The government has done the right thing by widening the tax base and narrowing the fiscal deficit. The move to implement GST, introduced in 2014, has been proven right.

GST is needed to provide a strong substitute as a tax consumption capable of off-setting revenue loss from personal and corporate tax.

Beginning next month, India will join nearly 160 countries, including Malaysia, in introducing GST. Like Malaysia, when GST was first introduced, plenty of loud grumblings and doubts have rolled out.

Unlike Malaysia’s flat 6% across the board, India is introducing a more complicated four-tier GST tax structure of 5%, 12%, 18% and 28%, with lower rates for essential items and highest for luxury and demerits goods that would also attract additional cess. In Singapore, GST was introduced on April 1, 1994, at 3%. The rate was increased to 4% in 2003, then 5% in 2004. It was raised to 7% on July 1, 2007.

Some politicians came under fire recently for purportedly calling for the abolishment of GST, however, some others clarified that they had merely called for a reduction in the tax’s percentage.

Another top opposition politician has come out as the strongest opponent of GST, reportedly saying the claim that Malaysia needs GST is false.

Some other politicians have described GST as regressive, but have not come out with clear ideas on how it should be tackled.

Nonetheless, the ruling party should not make light of these electoral promises.

For many in the urban middle class, they feel the squeeze the most.

They have struggled against the rising cost of living, paying house and car loans, and earning deep levels of debt, as one report aptly put.

The middle class, consisting of over 40% of Malaysians, is also in the income tax bracket, it must be noted.

Last year, an economist was quoted saying that 2016 was a year of a shrinking urban middle class and a happy upper class.

Shankar Chelliah, an associate professor at Universiti Sains Malaysia, said that the Malaysian middle class shrank in metropolitan centres across the country, and that most of its members would end the year almost 40% poorer than they were in 2015.

He said this would be due to the withdrawal of cooking oil and sugar subsidies, depreciation of the ringgit, decrease in foreign inflows and increase in outflows, among other factors.

For many in this middle class range who do not qualify for BR1M handouts, the government clearly has to come up with a range of programmes which can relieve them of these burdens.

It isn’t race or religious issues that will appeal to voters – they want to know how they can lead better lives, and if the opposition thinks contentious issues will translate into votes, they will be in for a surprise.

It is true that the heartland will continue to deliver the crucial votes, and the ruling party will benefit from this, but Malaysia has also become more urban and more connected.

At the end of the day, it is the bread and butter issues that matter most. Let’s hear some solid ideas and programmes which will reduce the burden of Malaysians.

By Wong Chun Wai On the beat, The Star

Wong Chun Wai began his career as a journalist in Penang, and has served The Star for over 27 years in various capacities and roles. He is now the group's managing director/chief executive officer and formerly the group chief editor.

On The Beat made its debut on Feb 23 1997 and Chun Wai has penned the column weekly without a break, except for the occasional press holiday when the paper was not published. In May 2011, a compilation of selected articles of On The Beat was published as a book and launched in conjunction with his 50th birthday. Chun Wai also comments on current issues in The Star.

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Saturday, 3 June 2017

Chinese car-maker Geely to make Malaysia its global hub, help Proton drive into future


PUTRAJAYA: The entry of a major Chinese carmaker into Proton Holdings Bhd will not only ease its financial woes, but also bring fresh capacity to the group’s underutilised factories.

Zhejiang Geely Automotive Co Ltd plans to turn Malaysia into its global hub to manufacture all of its right-hand drive cars, including its premium Volvo brand.

Geely will take a leadership role in production, sales and marketing. Proton will be responsible for distribution of the brand in Malaysia.


These were among the highlights mentioned at the signing ceremony in Putrajaya between DRB-Hicom, the parent company of Proton, and Geely.

Proton and Geely yesterday signed an agreement that would see Geely take a 49.9% stake in Proton. Both parties have not finalised the price Geely would pay for the stake.

Through the partnership, Geely executive vice-president and chief financial officer Daniel Li said Geely would focus on assisting Proton to sell 500,000 cars in Malaysia and around the region by 2020.

He said Geely would be contributing technology, talent and money to Proton. These include platform-sharing that would see the development of Proton’s first-ever SUV model from Geely’s best selling model – the Boyue.

DRB-Hicom group managing director Datuk Seri Syed Faisal Albar said in the competitive automotive industry, partnership among carmakers globally was common.

A partnership would also further expand Proton’s reach to other markets and give it better economies of scale.

“This partnership with Geely will create more jobs in Proton,” he told reporters yesterday.

Proton has a workforce of about 10,000 which produces about 100,000 cars a year. In 2016, sales of Proton cars dropped 30% to 72,290 units from 102,174 previously.

The company reported a loss of almost RM1bil last year.

Proton’s Tanjung Malim plant, which is designed to produce a million cars every year, will be made a new manufacturing hub for Geely.

Syed Faisal said Proton would relocate its entire production from Shah Alam to Tanjung Malim within five years.

Despite the entry of a new foreign partner, Proton will maintain its national car status. This means its industrial linkages, including vendors and dealers, will not be affected by the change in shareholding.

Under the heads of agreement signed between DRB-Hicom and Geely, the Chinese carmaker will take a 49.9% equity interest in Proton and also a controlling stake in Lotus, the British sportscar maker, from Proton.

No financial details were disclosed in the sale of a stake in Proton, while for Lotus, Geely would be paying £51mil (RM284mil) for a 51% stake in Lotus.

Syed Faisal said DRB-Hicom planned to sign a definitive agreement with Geely in July.

Also present at the signing ceremony was Second Finance Minister Datuk Seri Johari Abdul Ghani, who clarified that with the partnership with Geely in place, Proton would need to repay its RM1.25bil soft loan from the Government.

As part of the conditions for the soft loan, Proton was required to collaborate with a well-known strategic partner.

The requirement to collaborate with a well-known strategic partner was imposed on Proton as part of the conditions issued by the Government for its approval of the RM1.25bil soft loan to Proton, in which a bulk of the money was used to pay its vendors.

Separately, Johari said Proton was entitled to a RM1.1bil reimbursement from the Government for its RM3.5bil spent on research and development in the past.

Johari also said there would be no more “subsidy” for Proton from now on, and that the Government would no longer have a golden share in Proton with Geely entering into a partnership with the national carmaker.

Source: The Star by intan farhana zainulandizwan idris

‘Geely to help Proton drive into future’


IPOH: The decision by Proton to embark on a partnership with China’s Zheijiang Geely Automotive Co Ltd is timely because cars are predicted to be next in line to undergo sweeping innovations.

International Trade and Industry Minister II Datuk Seri Ong Ka Chuan said that in light of Industrial Revolution 4.0, bringing in Geely as Proton’s strategic partner would ensure the Malaysian company’s survival as cars increasingly adopt digital technology.

Industrial Revolution 4.0, or Industry 4.0, is the current trend of automation and data exchange in manufacturing technologies which include cyber-physical systems, the Internet of Things and cloud computing.

“After attending the Hannover Messe, the world’s biggest trade fair for industrial technology, I learned that self-driving cars are the next big thing.

“This means that you are looking at a future where cars will have no steering wheel.

“With just the touch of a panel, the car will bring you to your destination,” Ong said after witnessing the swearing-in of the new committee of the Perak Chinese Cemeteries Management Association yesterday.

He said Geely would be Proton’s channel to embracing technological innovations.

“I’m not saying to expect Proton to be a frontliner in this, but at least with a strategic partner it can move along with the times,” he added.

He said Geely would also open a new market for Proton, which was important for the national carmaker’s survival.

He said it was not a decision made purely in favour of China.

“Over the years, it’s been no secret that Proton accumulated losses and will need a big market to cater to in order to settle all the debts. This is the reality.

“Proton only narrowly met its sales target of 580,000 units last year, while Chinese brands sold 28 million units,” he said.

In view of its small volume, Ong said it would be difficult for Proton to fund sophisticated research and development initiatives.

“We need a larger market for things to work out. The Industrial Revolution 4.0 is all about innovation. We can’t do it ourselves, which is why working with advanced nations is our best bet,” he added.

The Star by Amanda Yeap

Related links:

Najib: Up to RM1bil losses for Proton if sale to Geely blocked ...

RM500 aid for civil servants - Nation

PM: Sovereignty will never be compromised - Nation

No place for sentiment in Proton deal - theSundaily

Saturday, 27 May 2017

Millennials Will Destroy Bitcoin


Irrational exuberance is alive and well.
A textbook bubble in Bitcoin prices is developing right now.
And it has everything to do with Bitcoin's investors.
Bitcoin Bubble
I'm probably not going to gain any friends with this perspective. But there are inarguable factors that suggest Bitcoin's own buyers are irrationally driving up prices. And their exuberance is setting the market up for a crash.
The Secret Gold Market They're NOT Telling You About
This hidden playground is completely OFF LIMITS to retail investors...
But it holds a secret that can help you predict spikes in gold with mysteriously uncanny accuracy...
Here's how you can piggyback off it for gains of 468%, 935%, 1,657%, and more...
Click here now for full details.
Let me clear one thing up about Bitcoin before I explain why I think prices are eventually headed for a crash...
As I argued before, Bitcoin is a legitimate form of money. But for the time being, it's being treated as a speculative investment.
Money is typically used in exchange. And while Bitcoin can be used in exchange, it's largely not. Gary Schneider, Professor of Accounting at California State University, says only about 10% of Bitcoin is held by people who use it as currency. The large majority are speculators hoping to sell at higher prices.
The fact that the market is dominated by speculators is not necessarily the problem for Bitcoin. And here's where I'm sure to piss some people off... The problem for Bitcoin is its buyers.
Who are they?
Well, according to a recent survey, approximately 60% of Bitcoin owners are under 35 years old.
Bitcoin User Age
In short, most Bitcoin buyers are millennials. And that's all we need to know about them to make an inarguable point (told you I wouldn't be making any friends here).
The fact is this: A 35-year-old speculator intrinsically has much less experience in risk management than a 60-year-old. And remember, most Bitcoin owners are mostly speculators, as opposed to users of the product.
AND remember they're speculating on a currency, which is among the most volatile of financial instruments.
AND remember they're speculating on what essentially amounts to a new, experimental currency.
All this considered, Bitcoin looks to me as one of the (if not the) most speculative financial instruments available...
Expect for Bitcoin's derivatives, of course.
Yes, believe it or not, Bitcoin has a futures market. And there are products that offer even more risk. On its Perpetual Bitcoin/USD Swap Contracts, BitMEX offers up to 100x leverage!
But to really understand why I think Bitcoin is eventually headed for a crash, let's consider the most famous market bubble in history...
Dutch Tulip Mania
In the 17th century, formal futures markets developed in the Dutch Republic, providing the infrastructure for a massive bubble in the price of tulip bulbs.
The tulip first became fashionable in France, where early modern ladies of the aristocracy began sporting the flower on their dresses. From there, the tulip became the flower to show off social status and wealth. The demand for bulbs subsequently skyrocketed, and prices immediately followed.
At the peak of Tulip Mania in 1637, a single tulip bulb could cost as much as 10,000 gilders, the price of a nice middle-class townhouse in Amsterdam. According to one author, 12 acres of land was once offered for one rare bulb. For a flower bulb!
Semper Augustus The Semper Augustus was the most coveted of all Dutch tulips.
Of course, the bubble eventually burst. The price of tulip bulbs collapsed, and fortunes in perceived value disappeared over night.
My team of researchers recently uncovered a key patent that exposes a major chink in Tesla’s armor...
This patent describes a groundbreaking technology that could simply blow Elon Musk, and frankly the entire solar industry, out of the water.
We’ve managed to uncover the tiny company with exclusive rights to this technology. It trades at less than $0.15 a share, but don’t expect it to stay there for long.
Over the next several years, I believe the value of this firm could absolutely explode... by my calculations, upwards of 4,600%.
I’ve included the patent filing and everything you need to know about this small company in this brief, free video presentation.
Here's what I really want you to take away from this story...
If we consider whom the people were who took part in Dutch Tulip Mania and compare them to the majority of Bitcoin owners, it seems both groups share the same shortcomings.
First, we know both groups are speculators betting on the hot new product. But I think we can also make good assumptions to compare the investment sophistication of the Dutch tulip investors and today's Bitcoin buyers.
Because formal futures markets were only recently developed, the Dutch tulip buyers were inherently unsophisticated investors. All of them. They simply didn't have the experience.
The majority of today's Bitcoin buyers are generally younger, so they share the same inexperience. For many Bitcoin buyers, I imagine it represents their first real investment. They simply don't have experience in risk management. And I think that's pretty clear considering some are buying products with 100x leverage!
Bitcoin could be the tulip of the 21st century with the development of a textbook bubble. And I think could be setting itself up for an eventual crash.
Now, even though I've been talking about a crash in Bitcoin prices, there's an epilogue to the Dutch tulip story that's often overlooked... and that actually provides a bullish outlook for the technology.
Truth is, the Dutch tulip bubble never really ended... it evolved. The price of tulip bulbs collapsed in the 17th century. But the flower industry at large eventually recovered and has never been bigger. Global floral production value is currently estimated at $55 billion.
People still pay thousands for rare flowers. In fact, an anonymous buyer paid over $200,000 for a rare orchid in 2005. And that's not even considered the most expensive flower in the world. Rose breeder David Austin spent 15 years and $5 million to develop Juliet rose.
Juliet rose
My point is, the tulip as an individual product lost favor. But the collapse of the tulip market didn't completely kill the flower market. In the same way, I don't expect a collapse of Bitcoin prices to completely kill the blockchain-based currency market.
Bitcoin is simply one product of many blockchain-based currencies. A crash in Bitcoin would throw a wrench in the blockchain-based revolution. But there is little doubt that blockchain technologies are the future.
As we speak, every major central bank and large financial institution is researching how to implement blockchain into its own systems. It has already been proven to eliminate verification redundancies and improve security, and new applications are being tested every day.
So while I think Bitcoin itself could eventually be headed for a crash, the blockchain technologies that are supporting all these digital currencies seem set for unprecedented growth.
Until next time,
luke signature
Luke Burgess
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Thursday, 25 May 2017

Two virtual coin get-rich schemes red-flagged by Malaysian Central Bank


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GEORGE TOWN: Two more popular financial schemes in Penang have been red-flagged by Bank Negara Malaysia (BNM).

A check on the financial consumer alert list yesterday showed MBI International Sdn Bhd and Mface International Sdn Bhd to be the latest additions.

Both are subsidiaries of MBI Group International, a company with investors worldwide, many of them from China.

To date, 302 companies have been listed under the BNM financial consumer alert list, for suspicion of not adhering to relevant laws and regulations administered by BNM in their operations.

Under the Financial Services Act 2013, individuals or businesses involved in illegal financial activities can be fined up to RM50mil and jailed for 10 years.

When contacted by a Chinese daily, MBI International chairman Tedy Teow’s special assistant Alfa said he did not think that the company would face any problem.

“And it is unnecessary for us to hold a press conference to explain the situation to our investors.

“We are always doing our work and we believe that our investors can see how we are performing so far,” he told Sin Chew Daily.

An investor, H.L. Teoh, said he put in RM22,500 early this year and was given 10,000 game redemption credits.

“Actually, I can start selling it every six months, but I was advised to wait for it to grow bigger in three years.

“When you have lots of credit, it is like having a lot of virtual shares.

“Now, I will have to wait for further instructions from the company before my next course of action,” he said.

Members are allowed to spend their loyalty points, which are converted from virtual money or coins, in exchange for goods and services at affiliated companies, including a supermarket, restaurants, a gym and even a durian stall.

Meanwhile, a press conference called by a branch representative of another controversial financial scheme operator, JJPTR, was cancelled at the last minute.

Press members in Penang had received an invitation from a man known only as Lim at 8.30am yesterday.

However, no reason was given for the cancellation.

JJPTR has been grabbing headlines in the past few weeks since its founder Johnson Lee claimed that the company had lost US$400mil (RM1.738bil) due to a purported “hacking job”.

Lee and two of his top aides have been detained by the police to facilitate investigations following several police reports lodged against JJPTR.

In another case, 19 Chinese nationals lodged police reports in Kuala Lumpur against another multi-level marketing company, claiming that they had lost hundreds of thousands of ringgit.

They claimed to have lost between 100,000 yuan (RM62,536) and 700,000 yuan (RM437,754) since investing in the scheme by Monspace last year.

Founded in 2014, Monspace is listed as a multi-level marketing company, according to the Com­panies Commission of Malaysia.

In an immediate response, Monspace said it would take legal action against any group or individual making defamatory statements against it.

The company said in a statement to the media that it was functioning professionally and had engaged a law firm to keep track of statements made about it.

Source: The Star/ANN by Crystal Chiam Shiying

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Wednesday, 24 May 2017

Huge Civil Service Size, Attractive Emoluments and Benefits are costing Malaysia !


Prized job: While long-term security like the pension scheme free healthcare and easy loans have been among the perks of joining the public service, many job seekers now want to become civil servants because it pays well. — Bernama

The attractive emoluments and benefits in the public sector are costing the country, say experts.


THE civil service had never been *Sofea Mohd’s dream job but in the current competi­tive job market, the final year Economics student at a local public university is seriously weighing the option. Especially since she was offered a temporary position at a ministry where she had just completed an internship.

“My seniors advised me to take the offer – one said she had to wait years before she got a job, another said he had to work in a fastfood restaurant and sell pens and children’s books on the street, so I thought I should listen to them and just take it.

“They say my chances of being hired permanently will be higher then,” says the 22-year-old.

The main reason she decided to accept the offer, however, is the pay, she tells, “It’s not as low as people say. I will get a daily wage but I can earn at least RM2,000 a month. The pay for permanent staff is of course better.”

Her friend *Azman Jailani dreams of starting his own business but is also planning to join the public sector after graduation.

“That’s what my parents want me to do. They say there is more security in the civil service. I can start my business later if I want,” says the final year business studies student.

With the academic year coming to a close at most tertiary institution in the country, many graduating students are preparing for the next chapter in their life. And like these two, many are looking at the civil service for a job guarantee.

It was reported recently that the Public Service Commission received 1.56 million applications last year to fill 25,046 job vacancies in the public sector. In 2015, the PSC received 1.63 million applications for 24,606 vacancies.

While the attraction of a government job is well-noted – long-term security; a pension scheme; cheap, if not free, healthcare; easy loans – many job seekers are now drawn to the public sector because of its pay.

Shamsuddin: ‘Duplications impact the private sector. When there are too many agencies, that will bound to cause delays.’
The pay for the public sector, especially for entry-level jobs, is on par with the private sector, says Malaysian Employers Federation (MEF) director Datuk Shamsuddin Bardan.

“It has to be noted that public sector wages have risen, in some cases outstripping the wages in the private sector. And that is only the basic pay. When you add the different allowances and bonuses, the public sector’s salaries – perhaps except for those at senior management level – could be more attractive than that of the private sector.

“Then there are also many benefits for civil servants such as house loans and healthcare benefits for them and family that continue even after they retire.

“In the private sector, the health insurance coverage ends when you leave a company’s employment or retire,” he says.

But the attractive emolument and benefits in the public sector have come at a price for the country, say economists, one that Malaysia will not be able to afford in the future. In fact, some believe it is already hurting Malaysia’s economy – it has been reported that it will now cost the nation more than 40% of government revenue to maintain the public sector.

Experts have pointed to its sheer size as a reason for the burgeoning bill of the civil service.

In February, Second Finance Minister Datuk Seri Johari Abdul Ghani told a local Chinese daily in an interview that it is a growing challenge for the Government to run the public sector due to the rising costs.

“One of the issues that we have to address is the ever-increasing government operating costs and expenses.

“For example, we have about 1.6 million civil servants, which is one of the world’s largest proportion of civil service,” Johari was quoted as saying.

With a population of 31 million, this means Malaysia has a ratio of one civil servant to 19 people, said the news report, which cited corresponding ratios for other countries in comparison: Singapore (1 to 71 people), Indonesia (1:110), China (1:108) and Britain (1:118).

The reported size of the civil service caused a stir, with the Public Service Department director-general Datuk Seri Zainal Rahim Seman refuting criticisms that the civil service is oversized by reiterating Chief Secretary to the Government Tan Sri Dr Ali Hamsa’s statement that the size of the civil service is a matter of definition under the Federal Constitution, which includes the police, the armed forces, and healthcare and education personnel.


As Zainal Rahim told the press, the actual size of the civil service would only be 682,790 should Malaysia adopt the same calculation used by other countries. This would make the ratio of civil servant to population as 1 to 44, instead of 1:19, he said.

The Organisation for Economic Co-operation and Development, meanwhile, put Malaysia’s employment in the public sector as only 10.8% of the total labour force in 2013.

But as Johari highlighted, the fact is, emoluments make up the biggest portion of the Government’s operating expenditure, and that cost has been and will keep expanding.

“In 2003, the pay of public servants totalled RM22bil but it increased to RM74bil by 2016. In 2003, the pension of civil servants was RM5.9bil and in 2016 the amount soared to RM19bil.”

This year, some RM77.4bil have been allocated in the 2017 Budget for public servants’ pay and some RM21bil for the pension and gratuity payments of retirees, which is about 45% of the allocated operating expenditure of the country.

The challenge to cover the spiking cost is intensified by the declining Government reve­nue, the vernacular newspaper reported Johari as saying.

“In particular, revenues from the palm oil and natural gas industries, which generated profits of about RM65bil in 2014, fell sharply to RM30bil in 2016,” he was quoted.

Concurring, economist Dr Yeah Kim Leng says the rising operating expenditure is also a concern due to its impact on the country’s development.


“Over the last decade or so, we are seeing the operating expenditure in the government budget expand to the extent that we are not able to expand the development expenditure,” says Dr Yeah, who is an economics professor at Sunway Business School.

Some RM214.8bil was allocated for operating expenditure in the 2017 Budget while only RM46bil was allocated for development.

“By right, the development expenditure should be half of the budget if we want a dynamic economy as we see in many countries, especially in the developed countries,” he adds.

“But in Malaysia, the development expenditure has shrunk to as low as 20% of the budget. This will have a multiplier effect on our economy.”

He argues we should be spending more on our development, both in increasing the quantum of development expenditure and at the same time focusing the development expenditure on the right sectors – not just hard infrastructure but also soft infrastructure like social and human capital development.

“This is important in improving the quality of our workforce and their skills, in terms of boosting the talent development that can push the frontiers of growth in the country, especially in science and technology and other emerging knowledge and industries.

“The Government needs to attract investments in these new sectors, so that is why development expenditure is one of the key contributions to spark growth in those sectors and accelerate the growth of the economy towards becoming high end, high value.”

He points out, various studies have shown that the country’s civil service is big, with a low productivity rate.

“Regardless of how we calculate the total, we definitely have more people in the public sector than necessary, and studies have shown that labour productivity is quite low for the public sector.”

Rightsizing the civil service is the way to go, he asserts, but it should be treated as part of the continuous effort of improving the efficiency of its delivery service.

“The key is to be able to provide the services required by the people optimally, which is at the smallest number and lowest cost possible without sacrificing the quality of service,” he says, stressing that the underlying note is that “we should be getting bigger banks for our bucks, that is the taxpayers’ money.”

Crucially, Dr Yeah adds, while rightsizing the civil service is important to sustain growth, it is important that we rightsize without disrupting economic growth in terms of the employment situation in the country.

“We have to ensure meaningful employment for all while sustaining a low unemployment rate so that we can maintain the domestic economic growth momentum.”

Any prudent government would seize the opportunity to rightsize and enhance the public sector efficiency, Dr Yeah says.

“It is important to rightsize gradually and incrementally at a pace that does not disrupt the economy.

“Because the risk is that if we are hit by a downturn and the government is forced to undertake the pending cuts then that would be more painful and damaging to the economy. There would be a loss of productive capital when we face that kind of situation,” he says.

Tan Sri Mohd Sheriff Mohd Kassim, immediate past president of the Malaysian Economic Association (MEA) also believes it is time for Malaysia to rightsize the civil service due to the huge sum of civil servants’ salaries and pensions in the government expenditure.

As he had told the “Economic Governance: Public Sector Governance” forum in February, it could be a problem for Malaysia if it runs into a financial crisis and rightsizing is “better sooner than later” if Malaysia wanted to avoid falling into a Greece-like crisis, where the European country had to cut salaries and state pensions for its civil service.

“It is worthwhile to do it now while we can still afford it.

“I think we should do it gradually. It is kinder to do it now with incentives than to suddenly cut their salaries and pensions at a time when they can least afford it,” he was reported as saying.

Mohd Sheriff, who is also the former Finance Ministry secretary-general and Economic Planning Unit director-general, points out that there are ways of rightsizing in a humane and caring manner including providing free courses on skills development that will make people employable in the right sector like ICT, English, basic accounting, corporate law and others.

He says with the right skills, many would even leave the service on their own accord to improve their lives.

Dr Yeah agrees.

“While their pay is comparable to the private sector, many of the second layer and support jobs in the civil service have low long-term prospect,” he says.

“If their skills are improved, they and their families could get better prospects for the future. And if they are forced to look at other opportunities in the private sector or in entrepreneurship, in the end they could be better off,” he says, pointing to some of the initiatives already taken to rightsize the civil service and improve its productivity and efficiency, especially under Pemandu.

Dr Lee Hwok Aun, senior fellow at the Institute of Southeast Asian Studies in Singapore, says the Government should explore different ways to raise more revenue, such as by introducing a capital gains tax.

As a former lecturer at a Malaysian public university, Dr Lee says he can appreciate the enormous difficulty of rightsizing the civil service.

“The projected increasing burden of civil service salaries and proven continuous increase of operational expenditures in overall federal government spending, at the expense of investment, are major causes for concern. And the size of the civil service matters, but the long-term issues are even more complex,” he says.

For the civil service to be effective, nimble and efficient, it will need to attract and retain talent in certain sectors – which means paying higher salaries, especially for key positions such as teachers, he says.

As he sees it, the main problem is over-bureaucratisation.

“There are various unnecessary administrative posts, which add cost and tend to perpetuate procedures and heavy paperwork. I can attest to this from my experience working in a public university. An overhaul of administrative strategy and operations is probably necessary in many departments, before making any staff reductions. If not, when staff retire or relocate, the same amount of tedious work becomes distributed among fewer people, causing service and morale to decline,” he says, adding there will also be resistance from civil servants who stand to lose their pension if they leave.

“We should be understanding and merciful about this situation. Forms of compensation, or the option to convert from public sector pension to an EPF lump sum, could be explored.”

MEF’s Shamsuddin concurs, pointing out that there are also a lot of duplications of service and work at the federal level and state level and so on.

“A good example is tourism where there is a tourism agency at the federal level while the state has its own tourism Exco and office.

Duplications impact the private sector as it is a problem to deal with different government agencies to get something done. When there are too many agencies, that will bound to cause delays,” says Shamsuddin.

Dr Yeah says it is imperative for the Government to enhance the efficiency of the delivery service and effectiveness of the public sector across the board, such as putting them to work in priority areas and where they will have the highest impact.

“Crucially, when we focus on improving productivity through redeployment, retraining and re-skilling, quite naturally, we will be rightsizing.”

It can even be a win-win situation for the public servants as a smaller number of employees that commensurate with a higher productivity will mean an increase in profit, so the civil servants can receive higher wages, he notes.

Still, Dr Yeah feels the public sector’s emolument bill should be capped.

“We need to ensure that the public sector wages do not exceed the workers’ productivity or rate of inflation, as that itself will lead to a productivity decline.

“We should cascade it so that the wages in private sector could rise in tandem with thepublic sector,” he says, adding that at the same time the size of the civil service needs to be reduced. “If we don’t rightsize and instead create more civil service jobs, it will be a downward spiral.”

The Government also needs to enhance Malaysia’s investment climate and attract more foreign investments, he adds, “The strategy of the country should be to push for private sector growth, especially in new and emerging areas which would boost demand for highly skilled labour.”

Ultimately, says Dr Yeah, the public service sector should not be the job reserve or employer of the last resort in the country.

To achieve this, we need to stop the disproportionate interest in the public sector which is not healthy for the economy, he says.

“We should be steering the workforce towards the private sector or they should become entrepreneurs so that they can raise their income opportunities and create jobs.” The tightening of the job market can lead to higher investment, higher productivity and higher wages, Dr Yeah notes, “This is the virtuous cycle we need to kickstart to sustain an economic growth for the country at a higher level.”

*not real name

Next: Some of the initiatives already taken by the Government to rightsize the civil service and improve its productivity and efficiency.

Source: The Star/ANN by Hariati Azizan

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