Quoting a Quote

From http://art-harun.blogspot.com/

The 1 Sentence Article Series: #1 - sports betting license

The irony about the sports betting license issued by the BN government lies in the fact that there was so much hoo-hahs generated by the BN during the Hulu Selangor by-election that Zaid Ibrahim was a gambler and a drinker - thus making him a sinner, I presume - and yet now the BN government has granted a license for sports betting to a Vincent Tan's company.

Subsidy or Responsibility?

The government’s calculation of subsidy figures should exclude services such as healthcare and education says the Federation of Malaysian Consumers Association (Fomca).

Fomca secretary general Muhammad Sha’ani Abdullah said he was given by government think tank Pemandu a breakdown of the RM74 billion that showed social services (health, welfare, education and scholarship) making up RM42.8 billion, fuel (petrol, gas and electricity) making up RM23.5 billion, infrastructure (toll, rural air services and rail) making up RM4.6 billion and food (sugar, flour, fisheries, rice and oil) making up RM3.1 billion.

What is a subsidy?

A grant made by a government to some individual or business in order to maintain an acceptable standard of living or to stimulate economic growth. - The American Heritage® New Dictionary of Cultural Literacy, Third Edition

Monetary assistance granted by a government to a person or group in support of an enterprise regarded as being in the public interest -  The American Heritage® Dictionary of the English Language, Fourth Edition

Given the dictionary definition of subsidies, I am disappointed that Pemandu grouped social services such as welfare, health and education under the category of subsidies. The public pays taxes and one of the uses of taxes is to provide basic necessities to the poorer segments of the society. The government is obligated to spend the tax revenue on welfare, education and health services. It should NOT be considered as a monetary assistance or grant. The public deserves those services, it’s their right and it is not right for the government to portray that they are doing the public, the taxpayer a favour by providing welfare, health and education services.

Somebody should tell Pemandu that subsidies are normally given to enterprises in order to enable a larger section of the society to maintain a decent standard of living. Health and education are public services provided by the government, so who gets the subsidies then? The provider of welfare, education and health services, i.e. the government. Who gives this so-called “subsidies”? The government. So, the government is subsidising itself? 

Who ‘drives’ this Pemandu think tank? Is he/she/they thinking?

About Pemandu [http://www.transformation.gov.my]

Performance Management & Delivery Unit (PEMANDU) was formally established on September 16, 2009 and is a unit under the Prime Minister’s Department. PEMANDU’s main role and objective is to oversee implementation and assess progress of the government transformation programme, facilitate as well as support delivery of both the NKRAs and MKRAs. Chairman of the PEMANDU board is YB Senator Tan Sri Dr. Koh Tsu Koon, Minister in the Prime Minister’s Department, in charge of National Unity and Performance Management. The post of Deputy Chairman and Chief Executive Officer of PEMANDU is held by Minister in the Prime Minister’s Department, YB Senator Dato’ Sri Idris Jala.

While the responsibility for end-to-end delivery of NKRA and MKRA outcomes ultimately rests with the respective ministries, PEMANDU has been mandated to catalyse bold changes in public sector delivery, support the ministries in the delivery planning process and provide an independent view of performance and progress to the PM and ministers. To allow PEMANDU to carry out its responsibilities effectively, it combines the best talent from both the civil service and private sector.

Jack of All Trades

Does the conglomerate model work? Judging from the success of General Electric and Virgin, it seems that the model does work and it is somehow proven by the fact that GE is the second most profitable non-petroleum company in the world. However upon further scrutiny, we will see that those companies making the most money tend to be those focussed on one core business.

Fortune Global 500 2009 ranking by profits:

1        Exxon Mobil - USD45.22b

2        Gazprom - USD29.86b

3        Royal Dutch Shell - USD26.28b

4        Chevron - USD23.93b

5        BP - USD21.16b

6        Petrobras - USD18.88b

7        Microsoft - USD17.68b

8        General Electric - USD17.41

9        Nestlé - USD16.67

10      Industrial & Commercial Bank of China – USD15.95b

*non oil & gas companies in blue

Other than the banks and oil companies, the rest of the top 25 most profitable companies in 2009 are focussed on one core business. They include Wal-Mart (general merchandisers), Johnson & Johnson (pharmaceuticals), Procter & Gamble (household & personal products), BHP Billiton and CVRD (mining), International Business Machines (IT) and AT&T, China Mobile Communications and Telefónica (telecommunications).

Even in Malaysia, our biggest companies such as Petronas, Telekom, Tenaga, MISC, Genting, YTL and KLK are primarily engaged one sector. Sime Darby, Hong Leong, IOI and Berjaya are the conglomerates listed among the largest corporations in Malaysia. The stable of companies owned by tycoons Ananda Krishnan and Syed Mokhtar are not centrally managed like Sime Darby and thus may not qualify as a conglomerate per se.

Tobacco companies were ‘forced’ to diversify into other industries because of the uncertainty surrounding their industry. They had to search for other sources of income in case regulators decide to impose measures which could threaten their revenues.

So, does the conglomerate model really work?

According to management expert Roshan Thiran who had worked in GE before, the key to the success of GE and Virgin is a cohesive culture and brand name that is present throughout the group. He adds, “Everyone in the group knows the vision and mission and this is inculcated very strongly and across every single segment of the group”.

My personal view is not everyone can do a Jack Welch. It would be better for businesses to be focussed in one sector, diversification into a myriad of unrelated businesses could cause the board and management to lose focus and unable to effectively manage the company.

An overly diversified company could also see profitable units subsidising the less profitable divisions. This will affect the morale of those working in the profitable divisions because they will feel their efforts (and profits) are used to support their colleagues who are not making money for the group.

That’s why I feel Sime Darby should be broken up into individual, independent companies.

Btw, our Petronas is ranked the world’s 13th most profitable company in 2009!

Two Horse Race

Most of the European football leagues are two team leagues. Some are even one team leagues. Consider these facts;

1. The top two teams in the La Liga during the 2009/10 season; Barcelona and Real Madrid amassed 99 and 96 points respectively. Third placed Valencia scored a paltry 71 points. 13 of the last 17 titles were won by those two teams.
2. Since 1989, Bayern has won 12 of the 22 Bundesliga titles. A distant second is Borussia Dortmund with 3 titles.
3. Manchester United won 11 of the last 22 English titles.
4. Olympique Lyon won seven consecutive Ligue 1 titles from 2002 to 2008.
5. PSV and Ajax won 11 and 7 Eredivisie titles respectively since 1989. Often, if one is champion, the other is likely to be the runners-up.
6. Only Celtic and Rangers have won the SPL since 1985. Like the Dutch league, the two Glasgow clubs occupy the top two positions of the league most of the time.
7. Serie A has three top teams, Juventus, Internazionale and Milan sharing 82% of the last 22 titles.

With the entry of foreign money, the English league appears to be the most competitive. This season saw Man City and Spurs competing for the forth Champion’s League spot, a position previously reserved for Liverpool. Aston Villa has shown it can last the whole season unlike previously when its challenge dies off in February.

For the other leagues, I doubt the success of Wolfsburg and FC Twente will be repeated. With David Villa in their team, Barcelona is expected to walk away with the Spanish title. Maybe Real can stop them if the self proclaimed ‘Special One’ becomes manager at the Bernabeu …

Power Play

The head of a OSK Research Sdn Bhd warned that the nation faces a possible power crunch in 2017 if gas subsidies are not removed (MI).

The Malaysian government has approved the construction of a nuclear power plant which is expected to start operation by 2021 to meet the country's power demand in the future (Xinhua).

Hasn’t anyone considered solar power, given that our country is blessed with 9-10 hours of scorching sunlight almost everyday? I’m no energy/power scientist but I’m assuming that it is possible for buildings to generate enough energy from the sun to power itself and maybe even produce enough electricity to on-sell to the national grid.

Solar power is emission free and environmental friendly. It does not require the building of billion dollar Ringgit power plants, no need for clearing rainforests or diverting rivers to build dams.

Why are we not going solar?

Dangerous Words

Can anyone confirm if PM Najib actually said this?

Making a last-minute pitch in a DAP stronghold, he announced an allocation of RM5 million for flood-mitigation projects in Rejang Park.

“I want to make a deal with you. Can we have an understanding or not?” Najib asked some 1,000 people who attended a public rally at the residential area.

“The understanding is quite simple. I help you, you help me,” said the Barisan Nasional (BN) chairman.

“If Robert Lau becomes the MP on Sunday, on Monday I will ask the cheque to be prepared,” Najib told the all-Chinese audience.

I’m not surprised that Ibrahim Ali made this statement wrt the May 13 gathering:

“Even Tun Mahathir himself had explained that the gathering was meant to inform, and that the gathering was peaceful, just as the Chinese also organise their own gatherings.

“If they do not feel safe with Malays having such gatherings, they can leave the country,” he quipped.

There is a saying (I don’t know from where, but definitely not Malay) “We take care to put clean things into our mouths but never bother about the dirty things coming out of our mouths”. No, things coming out from our mouth does not refer to puke. To enlighten the less informed, the saying simply says we should take care of what we say.  

History in Pictures?

I doubt KL has any proper town planning. Or any vision in its town planning. Whoever does the planning for KL obviously enjoys tearing down history. They allowed Bok House to be torn down and Pudu Jail will soon only remain in pictures. The historic Subang airport is gone and now they want to transform the Sg Besi airport into yet another commercial area.

Do we need another commercial area?

What KL needs are parks and more parks and recreational open spaces. The KLCC park is not really a park, we should have a park like London’s Hyde Park or New York’s Central Park or Melbourne’s Royal Park.

KL needs her historical buildings to be preserved. Those buildings add character to the city. We cannot keep demolishing old buildings just to make a quick buck. If we keep this up, the Sultan Abdul Samad building will soon be torn down and replaced with a mall with residential and commercial components, a few hotels, and a couple of office towers.

Low Wages Better Than No Wages

After reading many arguments for and against minimum wage, I am now against the imposition of a minimum wage.

Being a proponent of a welfare-ish state, I was initially a supporter of minimum wages. I was of the opinion that every worker deserves a decent amount of pay to fund a decent lifestyle.

So, why the change of tone? Its not a policy flip flop but more of a result of being enlightened. No doubt a minimum salary will ensure those in employment are not exploited. But a minimum wage will have the effect of giving fish instead of teaching to fish*.

Why do I say that?

A minimum wage doesn’t take into account the needs of the employee. An unmarried employee would be happy with 600 but an employee with 3 school going children might find 600 far from enough.

A minimum wage could lead to the corporation deciding to automate and eliminating unskilled jobs. The only reason unskilled lowly paid workers are working is because they are cheaper than machines, once they become more expensive than machines, the corporations will have no more need for them.

A minimum wage will kill incentive and effort. A worker previously earning 300 will now earn 600 and he/she will think hey, without doubling my efforts, I’ve doubled my earnings. They will maintain the same productivity and a few years down the road demand an increase in the minimum wage; citing inflation, rising cost of living as an excuse.

So, how do we ensure workers get higher (decent) pay? There may not be a short term solution but a longer term solution would be to increase the education level of the citizens. Improve the education system and make sure the nation produces a lot of engineers, doctors and scientists who are able to develop technological solutions and automate the nation. As a result, menial jobs will be naturally eliminated. We don’t need to pay low wages to the train driver because there won’t be any train drivers. Rubbish will be channelled direct from our homes to the incarcerator, no need for garbage collectors. Road sweepers will need to be highly skilled to operate the road sweeping machine; his wages will be higher by virtue of being highly skilled. Lowly paid security guards will be a thing of the past with the invention of high tech efficient security systems.

No doubt there will still be a need for low skilled office cleaners, roofers etc. but given that the rest of the society will be very well off, paying them a little higher won’t be such a problem …

* Give a man fish, he’ll eat for a day, teach a man to fish, he’ll eat everyday … or something like that

(un)just Rewards?

Ezam Mohd Nor and G Palanivel are senators now. And Ezam will get his Dato’ship soon.

To be a Senator, one must fulfil one or more of the following criteria;
1) rendered distinguished public service or
2) have achieved distinction in the professions, commerce, industry, agriculture, cultural activities or social service or
3) are representative of racial minorities or
4) are capable of representing the interests of aborigines (Orang Asli)”?

In the case of Palanivel, being an Indian, he qualifies under (3). Maybe this is also a reward for his sacrifice during the Hulu Selangor by-election. He is the no.2 man in the main Indian party in the BN so he’s appointment is not so unexpected given their minimal representation in the lower house.

But Ezam? His recent public service was limited to the BN public when he turned against his political allies. He may have done some public service during his time as an UMNO/PKR youth head but I doubt his appointment has anything to do with that. Like Palanivel, Ezam’s appointment is again a reward for turning over, the price for his principles.

There is something wrong when politicians switch sides. What happened to all the principles, ideals they used to promote and support? If Ezam feels that Anwar is so rotten, why go to jail and Kamunting for him? It would be a different story if PKR sacked him and he is forced to find an alternative platform to further his political ideas but in his case, he was pissed with Anwar and Azmin and decided to get back to them via UMNO.

The problem with PKR is that it is filled with frustrated ex BN members. Being from the fold of BN, they tend to have some baggage which could be used against them. They also have some BN habits which does not sync with PR ideals. To effectively move forward maybe PKR should stop relying on the ex BN politicians and let the younger, cleaner “political novices” run the show. They will trip and stumble along the way but at least their ideas and principles would not be influenced by the ways of BN, and we would probable see some changes, hopefully for the better.