PM Najib should cut NMY’s pay

The recent developments of the economic planning and control of the nation’s wealth via Federal Government planning and spending within the last five years have left much to be desired. Depsite the national coffer Petronas dishing out to the amount of RM 253 billion in taxes, dividends, royalties, advance payments, capital market instruments and other forms, the economy is still sluggish and no tanglible projects visible or known to be in the pipeline.

Within the last five years, Malaysia saw:

1. The inception of  ‘Level Four Boys’ in 2004 which effectively took over the role several of strategic Federal Government agencies such as EPU, ICU, MAMPU and even set the tone and direction of several Cabinet Committees. Several bad decisions were done by this inexperienced ‘kitchen cabinet’ with a serious deficit in macro planning and policy execution

2. The birth of the term ‘GLC’ (copycat from Singapore) and the restructuring of Federal Government investment arm Khazanah Holdings Bhd. All GLCs then after are given KPIs to focus and deliver on profitability,  return on investment (ROI) and ‘increasing value’ with enlarging market capitalisation in mind

3. The hiving off MOF Inc controlled Avenue Capital Resources Bhd. (ACRB) to ECM Libra for the ‘cover of a merger’ and the financial scandal presiding the exercise beginning December 2005. The exercise saw how irregular tactics such as the impairment of goodwill was carried out to devalue ACRB and pump up the market capitalisation of ECM Libra, the even out the value of ‘an anchovie eating a whale’.

4. The sharp and unplanned increased of retail petrol price from 1.62 to 1.92 per litre in mid 2006 and a economically suicidal but dissastrous jump from RM 1.92 to RM 2.70 mid last year. To alleviate the burden of high petrol cost of the rakyat, a subsidy scheme was introduced as a thought after and proven to be a failure.

5. The re-structuring of the automobile industry in 2006 which almost saw the slow and painful but certain demise of national car maker Proton and the scandal evolves the hiving off  the price motorcycle brand MV Agusta to Gevi SpA for an unbelievably meagre sum of Euro 1

6. The ‘Federalisation’ agenda on the state economic planning units with the inception of economic corridors since 2006, which saw macro management and exposure deficient professionals taken out from GLCs to do pseudo EPU-cum-implementor work at incredible cost and worst of all, progressed to little beyond the academic and theoretical approach

7. The borrowings that has been incurred by GLCs from the capital market since Khazanah restructuring is unbelievable. The amount of wastages and project failures that Khazanah investment is amazingly dangerous. Example is a a RM 200 million prawn rearing project in Setiu, Terengganu called “Blue Archipelago”.

8. The plan to systematically kill national icons such as KLIA with the proposal to develop a dedicated LCCT, a few kilometres away which got the imaginatons and very strong opposition from the Malaysian public

9 The plan to hive off IJN to Sime Darby and later when that proposal failed, to ‘privatise’ for the intent to IPO it in the future

10. The scandals involving the decisions made the Federal Goverment such as PKFZ in Port Klang and the redevelopment proposals in Penang (the home state of then MOF I PM ‘Flip-Flop’ Dato’ Seri Abdullah Ahmad Badawi and MOF II Tan Sri Nor Mohamed Yaackop) such as the PGCC and PORR , that could seriously impair the confidence for the rakyat and market.

11. A more elusive by highly strategically damaging proposal is for Malaysia is the redevelopment proposal of KTMB Lands along its Singaporean track

12. Another elusive proposal in the pipeline is to list Petronas subsidiary MLNG, as an effort to boost the Bursa Malaysia. Some said even FELDA has been proposed to be listed as well.

At the helm of these dissastrous decisions and scandals still remain another constant personality which has yet to be reprimanded. Former Minsiter of Finance II and now Minister in charge of EPU Tan Sri Nor Mohamed Yackop has his hands in all of these botched schemes.

NMY

Why he is still in the Cabinet under Prime Minister VI Dato’ Seri Mohd. Najib Tun Razak is still unclear. He has no political clout within UMNO and the market no longer regard him as a ‘national asset’. Probably he  was employed as Economic Adviser to the Prime Minister to do what he did best by then Fourth Prime Minister Tun Dr. Mahathir Mohamad; the revolutaionary and anti-IMF ‘Capital Controls and pegging of RM’ on 1 September 1998. His experience as a treasury man within Bank Negara has proven success to support Tun Dr. Mahathir’s unorthodox remedy to the unique Malaysian economy.

There after, he was given more responsibilities. Of course, his success of co-ordinating the turn around and restructuring of so many GLCs post the sacking of Deputy Prime Minister Anwar “Mat King Leather” Ibrahim is something that can be proud of. Anwar “Darling of the Jews” Ibrahim was an advocator to IMF prescription, which saw many Malaysian coroprations suffering from certain and slow death due to high interest rates and shorters NPL period and RM to the USD, which has risen as high as 4.88.

After the landslide BN win of 11th General Elections, PM ‘Flip-Flop’ Abdullah invited Nor Mohamed into the ‘Feel Good’ Cabinet. He was the Second Minister of Finance (MOF II) for one and a quarter term or five years to be exact. He was the ‘functional finance manager’ of the nation as 90% of this tenure PM ‘Flip-Flop’ Abdullah was the MOF I and it does not take much to figure out the latter was completely oblivion to the job. Hence, the spending pattern under Nor Mohamed is very worrying. From the Petronas figure, the Federal Government and some state government took RM 19 billion in 2004, RM 28.1 billion in 2005, RM 37.8 billion in 2006, RM 44.1 billion in 2007, RM 56.8 billion in 2008 and RM 67.8 billion for this year. The reason for the huge deficiency in Federal Government books must be due to poor management, on top very poor budgetting and tax planning work.

As the Minister in charge of EPU, he wold have a direct responsibility of the National Economic Advisory Council. So far, not much could be desired from this council which is filled with IMF alumnis. Presently, even the mechanics of the NEAC has yet to be completed. The only announcement that Nor Mohamed could be made responsible for is the revocation of the FIC ruling and the incorporation of the elusive and confusing Ekuinas as a substitute. The rakyat should also be made aware that under the second stimulus package, an SPV called Danajamin Bhd with a RM 1 billion paid up was incorporated designed to underwrite the issuance of syariah compliant commercial papers, which is something that existing structure like Takaful and Takaful Ikhlas could do with lesser operating cost.

Now that his usefulness has been saturated, it is time to reprimand him for his bad economic planning and execution. The more drastic approach is to ‘dismiss’ him from the Cabinet (the politically correct term be, ‘retire’). This could be politically boon or bane for PM Najib. Boon is that he is willing to make decisive move, to restore the confidence of the rakyat and capital and financial services market. The bane is that, Nor Mohamed could turn around and bite him back where it hurts, especially at a point where Pakatan Rakyat particularly PKR and partyless-Opposition Leader Anwar “Drama King” Ibrahim are scandalously vulnerable and would use all opportunities no matter how insignificant  to remain afloat, even temporarily.

Otherwise, a ‘softer’ approach would be to deduct RM 100.00 (One Hundred Ringgit Malaysia Only) a month from his pay will suffice. It is all about his KPI as the MOF II for five years and now Minister in charge of EPU. Obviously Nor Mohamed failed, at a mind blowing exorbitant cost. The planning and implementation of RM 253 billion dished out by Petronas within one electoral term  but no real and tanglible results being seen, felt nor believed in is undoubtably mind boggling to a point of very unacceptable.

 The call is made in the spirit of ‘1 Malaysia’, “Rakyat didahulukan, pencapaian diutamakan”.

*Updated at 200pm

 

 

Published in: on November 12, 2009 at 10:15  Comments (26)