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Tuesday, 28 August 2018

The real Malay dilemma: race, religion & politics messed up!

Old politics: If the leadership keeps to the racialist, feudalist and religious-centric tactics and policies of the past, thinking this is what they need to do to keep the votes, it will just be the repeat of past mistakes of the Umno era.

The issue is whether any of the Malay leadership  would be willing to change its society from a religious-centric one to one that is progressive and modern in character


A HIGH-level panel has been announced to review the administration of Islamic Institutions at the Federal level. Commendably, all views from the general public is welcomed. The Keeper of the Rulers’ Seal is also quoted as saying, in the announcement of this Panel, that it was appropriate that the related institutions undergo improvement so as to protect the religion of Islam, as well as promote its universal values in the country.

So here is a short opinion - Islam does not need protection, nor does it need to be institutionalised.

As a Muslim, I believe in God Almighty. His religion does not need anyone’s help, least of all from fallible human beings. Islam and God has no need for anything, but human beings do. No one represents Islam. Everyone represents their version of Islam that suits their wants and needs. These include those in political parties that say it represents Islam but simply do not. They merely represent their personal human interest for power and authority.

We need our Government to protect us from people who want to wield powers upon others by using religion as their weapon. That is what we Malaysians, Muslims and non-Muslims need. I want to ask the political leaders of Malaysia, elected and unelected: What do you intend to do to protect us from those in power whose interest is to wield their religion over others?

In Malaysia today, we are obsessed with religion. Politicians and Ministers talk about religion and upholding religion. We have dedicated channels and programmes on religion on mainstream TV. Teachers force their religion and religious interpretations on children. Even the technical department, JKR (Public Works Department) for example, has set up sign boards espousing religious thoughts. Ever go to civil service offices? Observe just how many religious seminar banners and thoughts are plastered all over these places. Sometimes I wonder whether these are public services departments or religious propaganda functionaries.

Why this parade of religion in the public sphere? Is it because our people obsess on religion, as they personally have got nothing else of substance to promote that would enhance their work and the lives of the people they serve? Or that they have to cling to religion as that is their one and only part of their lives that provide them any sense of self-worth?

Today, our Malay society has become a society so religiously judgemental that the sight of a woman without head-cover is practically blasphemous.

Think about this, after all the hue and cry of the 41 year old with 2 wives, from Kelantan who groomed his third, 11 year old child bride from the poor family in Thailand, the state religious authority penalised him for an unregistered marriage and then, instead of voiding it, basically approves the marriage. A significant portion of our Malay- Muslim society rejoiced!

Can a Malay society, more insular and superstitious in thought, that is now funding thousands of religious schools and Tahfiz centres/boarding houses than ever before in its history, create a population that is competitive to succeed in the 21st century?

Can it even compete on a fair footing with the rest of the Malaysian non-Muslim population? Malays have been given preferential places in universities, GLCs and the civil service for more than 40 years now, what have we got to show for it? Uncompetitive universities, a significant pool of unemployable Malay graduates and with most being employed by the civil service and the failed GLCs, and such corrupt administrations that a 93- year-old man has to come back to be the Prime Minister, that’s what. Would more religion help? Or would it make the population less competitive? Let us all be honest.

This has been the unintended consequence of the assimilation of Islamic values in governance (“penerapan nilai-nilai Islam”) instituted in 1985. The road to hell, they say, is always paved with good intentions. If nothing is done this nightmare is just beginning for the Malay society and Malaysian in general will suffer for it.

If we want to see where our nation is headed with this type of ideology and cultural religious mind-set besetting 60% of our population, we don’t have to look far to Saudi Arabia or Iran or even Aceh, we just need to see the state of governance and life in Kelantan. Democracy is only as good as an informed and intellectually challenging population. The Nazis in Germany and the Mullahs in Iran were all elected by the majority. Today, the Iranians are rebelling against their repressive theocratic Government but the Mullahs are not going to let go of power that easily. Thousands are in jail. But our Malays don’t seem to see or learn the lesson. Erdogan is taking Turkey on that road to already disastrous consequences and many of our Malays applaud.

The only reason the majority of the Malays today are satisfied with their lives to carry on being religiously obsessed, thinking non-stop of the afterlife and judging others, while the non-Malays are focused on bettering themselves in this life, is that the Malays, by and large, has been able to live off the teats of the Government in one way or another. It has been a fulfilled entitlement that will end sooner rather than later.

This gravy train has stopped. Mahathir and Robert Kuok, two 90-year-old plus statesmen, had to go to China almost in tribute with offerings, to extricate us from the mess our Malay leaders have created.

Unfortunately, Malays are oblivious to this fact. In fact, even most non-Malays are oblivious to the fact that if we do nothing, 30 to 40% of the population cannot sustain 100% of us. You need the remaining, at least, majority of that 60% to be able to truly contribute economically and not be consumers of tax from the minorities. And religion is not an economic contributor. It is an unproductive consumer of epic proportions with no returns.

Mahathir came to lead the Government in 1981 and transform an agricultural hamlet into an industrial one with liberal economic policies powered by an industrious non-Malay population and the liberal segment of the Malay society.

This was the population that made the country progress. Mahathir was not popular as a result of Islamisation. Mahathir was and is popular because he brought progress, prosperity and in-turn unity and pride in the country to everyone as Malaysians. He brought revolutionary change to real life. For all intents and purposes, he was a liberal progressive leader.

A progressive leadership will only be elected by a progressive society. The only reason the Pakatan Harapan government was elected was because the progressive societies of the non-Malays and the liberal Malay voted for it. We saved the nation, again. Unfortunately, that liberal segment is now forgotten and vilified. Malay liberals who are capable and focused on a productive life are labelled blasphemous and extremists, and shunned by the leadership in power, no matter who are in power.

The religious conservatives, on the other hand, are courted and coddled as if they will be the ever-lasting vote bank that must be assuaged. Think again on this paradigm. Malay swing votes are persuadable but only if the leadership shows the way.

If the leadership keeps to the racialist, feudalist, and religious-centric policies of the past, thinking this is what they need to do to keep the votes, they will just be repeating past mistakes of the Umno era. More of the Malay population will move to the right of centre towards the Mullahs. It is an inevitable outcome of such a policy. Islamisation was a counter to PAS, it only made Umno the old PAS, and PAS the new Taliban and a stronger party every year from that time onwards.

Religion by its very nature will always veer towards conservatism and fundamentalism, no matter how one wants to spin those words. Because institutionalised religion is about following. The attractiveness of institutionalised religion is the abdication of thinking to religious leaders with easy answers one shall not question. More so, when the population is uncompetitive against the outside world. In Malaysia, we have one of the most sophisticated array of institutionalised Islam in the world today.

So, without a change from the religious-centric environment the Malay society is currently in, and an education system that indoctrinates rather than enhance critical thinking, Malay society will continually drift towards the insularity of religious conservatism and away from progressive capabilities to succeed in the modern world. And population demographic will ensure that a progressive Government will eventually lose out.

Therein lies the real Malay dilemma.

Would any of the Malay leadership be willing to change its society from a religious centric one to one that is progressive and modern in character?

Do you want our Malay society to continue to regress and be uncompetitive? Do you want it to drag the rest of us down the road of conservatism and economic ruin?

As Malay leaders, do you placate or do you lead for change?

How do you lead that change?

Credit to Siti Kasim -
The views expressed are those of the author and do not necessarily reflect those of The Star.

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Friday, 24 August 2018

1MDB scandalous Bombardier Global 500 Jet parking fees of RM3.5mil to be paid if govt wants it back

The Bombardier Global 5000 jet parked on the tarmac of  Seletar airport in Singapore


PETALING JAYA: Malaysia will have to cough up at least RM3.5mil to bring the Global 5000 private jet that belongs to fugitive Low Taek Jho, better known as Jho Low, back to Malaysia.

The luxury private jet, which was impounded by the Singapore authorities since February last year, is currently parked at the Singapore Seletar airport.

“However, before the plane is allowed to be flown to Malaysia, Seletar airport has asked for settlement of the parking charges first,” said a source.

The source said the parking charges over the last 18 months have escalated to about RM3mil.

It is learnt that Seletar airport had indicated the fee to the Singapore authorities following Malaysia’s keen interest in taking possession of the plane.

Seletar airport is managed by Changi Airport Group Pte Ltd, a facility mainly used for private flights.

Changi Airport Group declined to comment on the parking charges.

“Due to client privacy, we will not be able to share the information,” its spokesman told The Star.

The source said the Malaysian government would have to pay the fee before the airport authority allows the plane to leave its tarmac.

It is understood that negotiations on the parking charges have been held between the Malaysia and Singapore authorities and the airport operator.

But to date, the source said, they have yet to reach a conclusion on the payment.

“The Malaysian government would also have to fork out another RM500,000 to service the aircraft, which has been grounded and left under the sun at the airport apron,” said the source.

The source said the aircraft that has been grounded since February last year is currently undergoing service maintenance work to ensure its airworthiness before it is allowed to be flown to Malaysia.

“The maintenance work on the airport craft is almost completed,” said the source.

The plane is likely to be taken to Subang Airport, a facility mainly used by private planes, said the source.

The Global 5000 jet was listed by the US Department of Justice (DoJ) as one of the assets bought using Malaysia’s state-owned 1MDB laundered money, through a series of shell companies and bank accounts.

In a court filing in June 2017, the US DoJ document stated Jho Low used part of the US$700mil (RM2.3bil in 2009) diverted from the 1MDB to acquire the luxury jet.

The Bombardier Global 5000 built in 2008 costs about US$35.4mil (RM145mil). The aircraft was bought at the end of 2009, less than three months after the US$700mil was moved away from 1MDB.

The plane, registered in the US as N689WM/MSN 9265, is registered to a company called Wynton Aviation and placed as a trust with Wells Fargo Bank Northwest.

Wynton Aviation is a company that was registered in the British Virgin Isles in 2009. The DoJ stated that Wells Fargo’s records indicate that it is a holding company owned by Low.

It was learned that prior to the plane being seized, the jet was based at Teterboro Airport New Jersey, close to Jho Low’s New York home.

Airliners.net website showed the plane had flown to Paris, Geneva, Beijing and London among other countries between 2009 and 2017.

Prime Minister Tun Dr Mahathir Mohamad had on Aug 13 said Malaysia was keen to take possession of the aircraft.

Early in the month, Malaysia also took possession of the superyacht Equanimity from the Indonesian authorities.

The vessel, valued at US$250mil (RM1bil), was handed over to Malaysian authorities near Indonesia’s Batam island on Aug 6.

It has since been brought back to the Boustead Cruise Centre in Pulau Indah.

Equanimity, which according to DoJ belongs to Jho Low and purchased with funds diverted from 1MDB, was seized by the Indonesian authorities in Tanjung Benoa port, Bali, in February.

The yacht, which is 54th in luxury vessels of its class in the world, was seized at the request of US authorities as part of its initiative to recover the billions diverted from 1MDB.

Another source said due to the high maintenance of the superyacht and its crew, the Indonesian government had decided to turn over the vessel to Malaysia at the request of Dr Mahathir when he visited Jakarta in June.

Credit: Eddie Chua The Star

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Thursday, 23 August 2018

Probe on ‘Big 2’ accouting firms: KPMG and Deloitte still on over 1MDB accounts


KPMG and Deloitte being investigated over 1MDB accounts


KUALA LUMPUR: The Malaysian Institute of Accountants (MIA) is investigating KPMG and Deloitte, the two accounting firms involved in signing off the accounts of the controversial 1Malaysia Development Bhd (1MDB).

The investigations are on whether the auditors in question who handled the accounts had breached the Accountants Act when signing off 1MDB’s accounts between 2009 and 2014.

The MIA has the power to regulate the accounting profession in Malaysia.

“There are complaints lodged against KPMG and Deloitte and we are investigating the auditors in question. The complaints are on the auditors and it is ongoing,” MIA’s chief executive officer Nurmazilah Mahzan told StarBiz in an interview.

Nurmazilah said it could not be determined at this stage when the investigations would be completed.

“The results of the investigations will be studied by a committee. The process is continuing but we have not got the final verdict yet. We cannot predict how long it will take at this point in time. If the auditors are found guilty or if there is a basis to these complaints then we have to wait for the judgement of the disciplinary committee,” she added.

MIA’s executive director for surveillance and enforcement Datuk Muhammad Redzuan Abdullah said the investigations were at the disciplinary committee level now and investigations had started since mid-2016.

The scandal-riddled 1MDB that had accumulated debts of RM42bil over the five years between 2009 and 2014, has had four auditors since its inception. They are Parker Randall, Ernst & Young, KPMG and Deloitte.

1MDB appointed Ernst & Young as its auditor when it was set up in mid-2009. However Ernst & Young resigned in 2010 without signing off the accounts of the fund that was set up by the previous government headed by Datuk Seri Najib Tun Razak.

KPMG stepped in to take over from Ernst & Young and signed off the accounts for the financial years ended March 31 in 2010, 2011 and 2012. The accounts were signed off without any qualification from the auditors.

Deloitte took over the auditing in December 2013 after 1MDB contended that KPMG could not “conclude” its 2013 accounts.

1MDB had also said in May 2015 that Deloitte had signed off 1MDB’s accounts for 2013 and 2014. When questions arose as to why KPMG could not conclude the accounts for 2013, 1MDB stated in 2015 that Deloitte had signed off the accounts without any qualification.

Nevertheless, resignations by Ernst & Young and KPMG as auditors then had raised questions over the fund. In the accounting world, a firm rarely leaves a job half-done, especially more so when it involves big and prominent clients such as 1MDB.

After KPMG left, 1MDB obtained an extension of six months to submit its accounts for end-March 2013.

It was reported then that KPMG had relinquished its role as auditor. Deloitte then came in and managed to close the books within the extended period of six months.

Earlier reports quoting sources said the primary reason why KPMG could not give an opinion on 1MDB’s accounts was because it was not able to make a fair assessment of the value of the assets backing the fund’s US$2.3bil investment placed with a Hong Kong-based asset management company.

Subsequently Deloitte managed to complete the books wherein the fair value of the investments was put at RM7.18bil based on the assessment done by a third party engaged by the fund administrator.

Recent reports said KPMG which had then signed off on three unqualified audit reports for 1MDB, had informed its board of directors that the audited financial statements did not reflect a true and fair view of the company.

It was also reported that Deloitte in 2016 also said its audit reports on 1MDB’s financial statements issued on March 28, 2014, and Nov 5, 2014, for the financial years ending 2013 and 2014 should no longer be relied upon.

Credit: Daniel Khoo The Staronline


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Wednesday, 22 August 2018

ECRL and pipeline projects cancelled !

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It added to the country's debts and we cannot afford it, explains Dr. Mahathier

Headline News

THE cancellation of two multi-billion dollar projects in Malaysia awarded to companies from China ends months of uncertainty, besides marking new parameters for investment by companies from the world’s second largest economy.

Tun Dr Mahathir Mohamad announced the cancellation of the RM55bil East Coast Rail Link (ECRL) and two gas pipeline projects worth RM9.41bil at the end of his five-day visit to China.

The Prime Minister said the projects only added to Malaysia’s debts and had to be cancelled until the country could afford it.

He said China’s leaders understood Malaysia’s plight and their response was positive.

He said he explained to President Xi Jinping, Premier Li Keqiang and chairman of the National People’s Congress Li Zhanshu why Malaysia could not go on with the projects.

“It is all about borrowing too much money, we cannot afford it, we cannot repay and also because we do not need them.

“The Chinese see our point of view and none of the three leaders said ‘no’.

“They understand why we have to reduce our debts,” Dr Mahathir told Malaysian journalists here yesterday before wrapping up his official visit.

Asked about compensation, he said details including the amount would have to be negotiated and worked out by officials later.

“If we have to pay compensation, we have to pay. We cannot afford it, so we must find a way to exit it at the lowest cost possible,” he added, blaming the previous government for entering into such unfair agreements with huge exit costs.

Both projects were awarded under the previous government in November 2016 during an official visit to China by former prime minister Datuk Seri Najib Tun Razak. Since Pakatan Harapan took over, China’s investments in Malaysia and large-scale infrastructure projects have come under intense scrutiny.

Both the railway and gas pipeline projects were mired in controversy with huge advance payments made not corresponding with ground work.

Dr Mahathir also laid out the types of investments that Malaysia wanted to attract, citing foreign direct investments (FDIs) which brought in capital and technology, and hiring of locals to produce goods for local consumption or export.

“This is the meaning of FDI, not buying land and setting up new cities. We want our people to be employed and they (China) agreed,” he added.

Criticism on previous construction projects undertaken by companies from China was that it had little multiplier effects on domestic economy because almost everything was brought in from there.

As per the ECRL project, most of the railway track work was slated to be handled by companies from China despite Malaysia having many companies with such expertise. And as for the two pipeline projects, an average of only 13% of the work was done but the amount drawn down was a staggering 88% of the total cost of RM9.4bil.

No local company was known to be undertaking the gas pipeline jobs.

Dr Mahathir in the past also criticised land and reclamation rights being sold to property developers from China to build large-scale property projects, especially in Johor.

Asked what happened to the money that had been drawn down, he said it should be recovered from Najib.

“He was the one who entered (into the agreement), I have never heard of a contract in which you pay on time without any condition that the work must be done,” he added.

Economists said investors had been waiting for some kind of direction on China’s investments here with Pakatan in power.

Socio Economic Research Centre executive director Lee Heng Guie said the impact of the cancellation of the projects to the Malaysian economy would be manageable, although there would be some negative effect on consumption and investment.

“There could be some impact on the job market with the expected layoffs.

“But I don’t think the cancellation will pull down investment and consumption significantly.

“Whatever contraction of the economy that we will likely see because of the ECRL cancellation should be cushioned by ongoing projects,” Lee added.

Credit: Beh Yuen Hui in Beijing

Cancellation of ECRL comes as a shock to workers


All quiet: Workers at the ECRL site in Bentong, Pahang, are waiting for an announcement from their management after Dr Mahathir cancelled the project .

BENTONG: While some workers involved in the East Coast Rail Link (ECRL) are in shock over the scrapping of the project as announced by the Prime Minister, some areas have yet to see any work despite the launch of the 688km line about a year ago.

Several construction workers said they were left in the dark over the matter.

“Right now, we don’t know what the actual status of the project is.

“We are still waiting for an announcement from the top management,” a senior construction worker told The Star on condition of anonymity.

Another construction worker also expressed a similar sentiment, saying that the ECRL project consisted mainly of Malaysian workers.

“Workers from China comprised 18% to 20% of the staff,” he said.

A security guard at the Bentong ECRL project site said the workers’ quarters were already deserted a month ago.

In July, Singapore’s Channel NewsAsia reported that the fallout had already seen half of the workforce, mostly Malaysians, being retrenched.

A source from the Malaysian Rail Link (MRL), the project owner of ECRL, confirmed that the retrenchment did indeed take place.

“The China Communications and Constructions Company (CCCC) started layoffs a month ago when the project was suspended.

“Half of them are already retrenched and the Chinese workers were told to leave,” said the highly placed source.

Top officials in the MRL are said to be shocked by Tun Dr Mahathir Mohamad’s announcement as it was understood that they were in discussion with the Council of Eminent Persons (CEP) and the Transport and Finance Ministries to come up with several options to scale down construction costs.

“The MRL has paid more than RM10bil to the main contractor, the China Communications and Con­struc­tions Company and there is a claim of RM9bil for work done.

“So it will be quite a waste because the figure to compensate them is quite high,” he said.

The project was launched on Aug 9, 2017, and scheduled for completion in 2024.

In Kuantan, at the site in KotaSAS where the project was launched with much fanfare, all that remains is an empty swathe of land.

Besides the ongoing construction to build the new Pahang administrative centre nearby, it was all quiet at the site where former prime minister Datuk Seri Najib Tun Razak performed the ground-breaking ceremony.

A security guard at the site said no actual rail construction had been carried out since the launch.

The guard, who declined to be named, said there were no workers from China or an ECRL office located at the site.

He was surprised when told of Dr Mahathir’s announcement.

“But then again, there was never any railway construction here. So, there’s nothing to stop,” he said.

A large signboard near the site stated that the KotaSAS Central station would open in 2021.

Credit: Tarrence Tan, Ong Han Sean, Mahadhir Monihiuldin The Star



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Tuesday, 21 August 2018

PM: Understand Malaysia’s fiscal woes

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Wow! China's most impressive Guard of Honour for Tun Mahathier
https://youtu.be/-_UD5W1KKEQ

TUN Dr Mahathir Mohamad has appealed to China for its understanding on Malaysia’s fiscal woes, as uncertainty hovers over the China-backed infrastructure projects back home.

The Prime Minister, who is on a five-day visit to China, also hoped Beijing could lend a helping hand to solve the problems plaguing Putrajaya.

“We hope to get China to understand the problem faced by Malaysia today and believe it would look sympathetically towards the problem we need to resolve.

“And perhaps help us resolve some of our internal fiscal problems,” he said.

Dr Mahathir was speaking at a joint press conference with his Chinese counterpart Li Keqiang at the Great Hall of the People here yesterday, following the official welcoming ceremony and a closed-door meeting.

While Dr Mahathir had stopped short of specifying the problem, the Pakatan Harapan government had said that the country’s debt is now above RM1 trillion.

The new administration was also critical of the “lopsided” deals with China and moved to suspend projects with Chinese investment, such as the East Coast Rail Link, the Multi-Product Pipeline and the Trans-Sabah Gas Pipeline.

During this visit, Dr Mahathir had stressed that Malaysia was not against any Chinese firms and that he welcomed Chinese businessmen to invest in Malaysia.

At the press conference, Dr Mahathir said Malaysia had much to gain from China and believes that Chinese investment could bring down the unemployment rate in the country.

“Malaysia has a policy of being friendly to every country in the world irrespective of its ideology. This is because we need to have a market for our produce,” he said while expressing hope that Malaysia would become a South-East Asian hub for new technology being developed in China.

“China has great entrepreneurs with innovative ideas in doing business that Malaysians can learn from.

“China has got a lot that will be beneficial to us. It is a big and rich market created by very dynamic people,” he said.

Asked about his views on the trade war between China and the United States, Dr Mahathir said Malaysia would support free and fair trade.

He said he did not want to see this trade war becoming a new form of colonialism.

Dr Mahathir’s trip, which ends today, is his first official visit to China since his return to helm the country.

Ministers joining him on the trip are Foreign Affairs Minister Datuk Saifuddin Abdullah, Primary Industries Minister Teresa Kok, International Trade and Industry Minister Ignatius Darell Leiking, Agriculture and Agro-based Industry Minister Datuk Salahuddin Ayub, Minister in the Prime Minister’s Department Datuk Liew Vui Keong and Entrepreneurial Development Minister Mohd Redzuan Md Yusof.

Meanwhile, Dr Mahathir also had a closed-door meeting with Chinese President Xi Jinping yesterday evening at the Diaoyutai State Guest House.

Accompanied by his wife Tun Dr Siti Hasmah Mohd Ali, he later attended a dinner hosted by Xi and his wife Peng Liyuan.

Bernama reported that Dr Mahathir gave the assurance to Xi that there would be no changes in policy towards under the new Malaysian government.

He told Xi that he was impressed with the level of development achieved by China.

“We see China as a model for development,” he said.

Credit: Beh Yuen Hui The Star

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Monday, 20 August 2018

Opportunities in e-commerce

Talk on trade: (from left) Interbase Resouces Sdn Bhd MD and Lelong.com.my co-founder Richard Tan, Chong and SME Association of Malaysia national deputy president Ong Chee Tat during a panel discussion on Global is the New Local: The Changing International Trade Patterns of Small Businesses in Asia Pacific, organised by FedEx.
Talk on trade: (from left) Interbase Resouces Sdn Bhd MD and Lelong.com.my co-founder Richard Tan, Chong and SME Association of Malaysia national deputy president Ong Chee Tat during a panel discussion on Global is the New Local: The Changing International Trade Patterns of Small Businesses in Asia Pacific, organised by FedEx.

More SME seen to be embracing technology


WHILE its been a constant lament that local small and medium-sized enterprises (SMEs) are not embracing digital technology, a new survey seems to suggest otherwise.

A recent FedEx-commissioned study on trends being adopted by SMEs in Asia Pacific (Apac) has revealed a high adoption of new technologies among local SMEs.

According to the study, Malaysia ranks fourth (among nine Apac countries surveyed) in digital platform implementation and third in adopting Industry 4.0 technologies.

Entitled “Global is the New Local: The Changing International Trade Patterns of Small Businesses in Asia Pacific”, the research revealed that an average of 88% of Malaysian SMEs are adopting digital economy platforms, such as e-commerce, mobile-commerce and social-commerce platforms.

FedEx Malaysia managing director S.C. Chong says it is critical for SMEs to take advantage of technological advancements as a catalyst to enter into new markets, improve customer service support and experience, and provide a more efficient end-to-end customer journey.

“SMEs are the engine of growth and form the backbone of Malaysia’s economy,” he says during a briefing on the survey, last week.

Chong adds that it is encouraging to see SMEs taking the initiative to grow their business through the adoption of new technologies, infrastructure-building, and expansion into international markets.

Citing the survey, he says that 61% of local SMEs are optimistic that the e-commerce platforms will help contribute to increased revenue growth in the next 12 months.

“The study also found that 69% of Malaysian SMEs have incorporated Industry 4.0 technologies into their operations such as mobile payments, automation software and big data / analytics in particular.”

Industrial Revolution 4.0 refers to the paradigm that machines are now able to autonomously adapt and coordinate their tasks to meet human needs.

The survey also shows a significantly high adoption rate of mobile payments among Malaysian SMEs at 90% (higher than the Apac SME average of 73%), with automation software and big data / analytics among the top Industry 4.0 technologies being used by SMEs at 84% and 77% respectively.

In addition, the survey also showed that 78% of respondents agreed that Industry 4.0 technologies have enhanced efficiencies in the supply chain and distribution channels, while helping reduce challenges brought by cross-border payments.

The results of the survey were based on interviews with 4,543 senior executives of SMEs in nine markets in Apac between March and April 2018. The markets included in the research were China, Hong Kong, Japan, Malaysia, Philippines, Singapore, South Korea, Taiwan, and Vietnam.

The interviews were split equally by market with a representative mix of company sizes: micro (one to nine full-time employees), small (10 to 49 full-time employees) and medium (50 to 249 full-time employees).

Each market had an average of 500 respondents.

SME Association of Malaysia national deputy president Ong Chee Tat says SMEs and Industry 4.0 are key components towards the growth of the nation, as Malaysia works towards achieving a high-income economy.

“While technology may have reduced the gap between SMEs and larger industry players, SMEs still face various challenges in the adoption of the latest trends or tools in technology. Most SMEs may find that they lack sufficient finances, knowledge or workforce talent to adopt these new technologies.

“As such, we (the SME Association) are cognisant of the barriers to technology-adoption and continue to guide, empower and support SMEs by providing strategic advice or counsel and initiating networking platforms to facilitate knowledge exchange.”


Ong says that the SME Association is currently looking to set up an SME Academy to help provide training for local start-ups.

“We hope to be able to launch this academy by this year,” he says.

The survey also revealed that 95% of Apac SMEs have made use of digital platforms such as e-commerce (82%), mobile-commerce (72%) or social-commerce (74%) in their business operations.

“In Malaysia, the top social media platforms are Facebook, WhatsApp and Instagram,” says Ong.

According to the survey, the top social media platform used in Apac markets is Facebook, with the exception of China (WeChat) and Taiwan (Line).

In comparison, Malaysia has an overall higher adoption rate of e-commerce (90%), mobile-commerce (87%) and social-commerce (86%) compared to other markets in Apac. Also, the survey says 61% of Malaysian SMEs expressed confidence that the digital economy will help reduce barriers to finding global customers beyond Apac.

Chong says the finding is strongly supported by Malaysia having 146% mobile penetration, 22 million internet users, 18 million active social media users, and seven million online shoppers, leading to Malaysia ranking 31st among the most tech-ready countries around the world.

Meanwhile, Interbase Resouces Sdn Bhd managing director and Lelong.com.my co-founder Richard Tan says that by educating SMEs and raising their awareness on the digital economy, there will be a rise in brick-and-mortar SMEs having an online presence to augment and complement their business.

“At Lelong.my, our integrated online platform which comes with services such as e-payment solutions and digital storefronts, has allowed us to extend our reach to capture the younger generation of increasingly digital savvy customers and merchants.

“As an online retail platform, we continuously evolve and transform ourselves to ensure that we fully understand the consumer journey and experiences to make it a seamless, pleasant one.”

He also says that the rise in digital platforms will not result in brick-and-mortar outlets becoming obsolete.

“I believe they will complement each other,” he says, adding that this is why it’s important for companies to have both a physical and online presence.

“I might see a product at a store somewhere, but may decide to purchase the item off of the company’s website. On the flipside, I might see something online that I might like, but would want to physically see it first, before deciding to buy.”

Tan emphasises that it is in a situation like this that SMEs need to have a presence online.

“You need to have your content displayed on the Internet. If people can’t find your product on the web, they may just decide not to buy it at all. That’s the behaviour of the new group of consumers today.

“You have to digitize your content.”

Chong admits that having products and services accessible via the web nowadays is a given.

“However, there are still products and services that you can’t get online. But it’s important to be able to have your product on the web, so that people can learn about it and either buy it or choose to view it physically at your store.”

Growth opportunities

In conjunction with the recent “Take E-Commerce to the Next Level” conference by DHL Express Malaysia, the logistics firm said in a statement last week that there is great potential for Malaysian SMEs to grow their business overseas through e-commerce.

“By 2020, it is expected that one out of five e-commerce dollars will be generated through cross-border trade. Business to consumer (B2C) e-commerce has grown at a faster pace than most other industry sectors in recent years, with premium cross-border shipments growing from 10% to more than 20% of the volumes of DHL Express.

“This is further boosted by various incentives the government has provided to ensure that the local e-commerce sector has the potential to lift Malaysia’s total trade to RM2 trillion this year.”

Over 100 local SMEs attended the conference.

Its speakers included those from Amazon Global Selling, Payoneer, Everpeaks, Malaysia Digital Economy Corp (MDEC) and Malaysia External Trade Development Corp (Matrade), who shared their insights on the importance of logistics, digital marketing, payment options and sales methodologies as part of the entire B2C ecosystem.

“These takeaways are meant to better equip local SMEs to meet the increasing demand of customers who seek faster fulfilment and more variety at cost-effective prices,” says DHL Express.


In the same statement, e-commerce conglomerate Amazon encouraged more Malaysian SMEs to expand their business by tapping Amazon’s global reach.

Amazon Singapore’s Amazon global selling head Gijae Seong says: “South-East Asia has quickly grown to be one of the most important regions for Amazon Global Selling.

“In the US alone, Amazon has over 150 million monthly unique visitors. We hope that more local SMEs will consider expanding their business globally on Amazon in the future.”

In addressing the challenges of SMEs to expand its presence on a global level, Matrade transformation and digital trade division director Noraslan Hadi Abdul Kadir points out that Matrade is Malaysia’s national trade promotion agency, and therefore has the mandate to promote local SMEs overseas.

“Our eTRADE Programme offers financial incentive valued at RM5,000 per company, which can be utilised to partially cover the on-boarding cost to be listed on world’s renowned e-Commerce platforms the likes of Amazon.com.

“We hope more SMEs can capitalise on the programme to kick-start their cross-border e-commerce business.”

Boost to property sector

The e-commerce boom is also set to be a boost to the local property market, with the industrial sub-sector being its biggest beneficiary.

According to the Valuation and Property Services Department’s (JPPH) Property Market Report 2017, the industrial sub-sector, though contributed the least to the overall property market last year , plays a significant role generating investments and employment opportunities.

“As Malaysia embraces Industrial Revolution 4.0 and the digital economy, a different ball game is expected of the industrial property sub-sector,” it says.

One initiative that is expected to support the sector’s performance, says JPPH, is the setting up of a Special Border Economic Zone in Bukit Kayu Hitam, which will be the new attraction for both domestic and foreign investors on the northern zone of Malaysia.

“Another is the establishment of a Digital Free Trade Zone (DFTZ), which will see KLIA as the regional gateway. The first phase of DFTZ is foreseen to have 1,500 small and medium enterprises participate in the digital economy and is expected to attract RM700mil worth of investment and create 2,500 job opportunities.

“On the same note, Cyberjaya will be transformed into a global technology hub and a smart city.”

In November, CIMB Research in a report said the industrial segment has a strong growth trajectory through acquisitions and organic growth, given the tight industrial space supply.

“Demand for new high-quality industrial assets will transform the segment, which has led to several new mega-distribution centres that carry high price tags as retailers start turning to logistics.

“Notably, UK-based retailer Marks & Spencer is building a 900,000-sq-ft distribution centre with one million products processing capability per day and will consolidate its 110 warehouses into just four.”

The sector is also expected to be bolstered by the growth of the e-commerce segment.

The growth in e-commerce, which in turn is spurring the online retailers sector, will lead to demand for larger warehouse spaces.

According to JPPH’s Property Market Report 2017, the industrial property sub-sector recorded 5,725 transactions worth RM11.64bil in 017.

“Compared with last year, the market volume increased by a marginal 2.1% but value declined by 3.1%. Most states recorded contractions in market activity but the commendable growth in Selangor and Johor at 19.5% and 9.5% respectively helped support the overall marginal growth.

“These two states accounted for 34.2% and 14% of the total market activity respectively. By type, vacant plots formed 31% of the total transactions, followed by terraced factory with 28.7% market share.”

JPPH says the industrial overhang remained minimal though the volume kept growing since 2016.

“There were 999 units worth RM1.51bil in 2017, showing an increase of 11.4% and 27.1% in volume and value respectively. Johor also took the lead in the industrial overhang with 40.7% (407 units) of the national total.”

JPPH adds that the industrial development front was less active as shown by the marginal increase of 0.4% in completion to record 1,851 units, whilst starts and new planned supply decreased by 20.7% and 34.3% respectively to 850 units and 710 units.

“As at year-end, there were 113,173 existing industrial units, with another 5,675 units in the incoming supply and 7,513 units in the planned supply.

“Prices of industrial property were stable across the board. One and a-half storey semi-detached factories in the Petaling District fetched between RM4.1mil to RM5.7mil. In Johor Bahru, similar factories in Taman Perindustrian Cemerlang ranged from RM2.3mil to RM2.7mil.”

As for the other property sub-sectors, the residential property market recorded 194,684 transactions worth RM68.47bil in 2017, which were 4.1% lower in volume compared with 2016, but they increased by a marginal 4.4% in value.

By price range, demand continued to be in the RM200,000 and below price points, accounting for nearly 45% of the residential market volume.

Last year saw 77,570 units of new launches, higher than those recorded in 2015 (58,411 units) and 2016 (52,713 units).

Kuala Lumpur recorded the highest number of launches in the country with more than 22,000 units. Its sales performance was at a low 19.5%, followed by Selangor with 13,522 units and Johor, 7,926 units.

The commercial property segment, meanwhile, continued to decline but at a modest rate, says JPPH. There were 22,162 transactions recorded worth RM25.44bil in 2017, down by 6.7% in volume and 29.2% in value compared with 2016.

The retail sub-segment’s performance was stable at 81.3% in 2017 compared with 81.4% in 2016, recording an annual take-up of more than 6.78 million sq ft.

Kuala Lumpur, Selangor, Johor and Penang saw a significant take-up rate as their newly completed shopping complexes secured commendable occupancy.

Johor was leading with nearly 2.82 million sq ft followed by Selangor (1.17 million sq ft), Kuala Lumpur (1.01 million sq ft) and Penang (778,833 sq ft).

Credit: Eugene Mahalingam Star SMEBIZ

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