Waaaa So Lama Tak Update!

It feels like ages since I even remember about the blog. Actually I think about it all the time, I just couldn’t discipline myself to allocate at least half an hour a week to blog.

I blame it on Twitter as whatever thoughts you have you can share instantly with others. The magic of Twitter means you interact closer with you peers and in more real time.

Anyhow, I hope I can be more disciplined to at least write a few thoughts on current issues, especially on issues relating to economic hardship faced by the people.

A discourse on whether or not we can lower down fuel price is an important debate that has not been brought to the mainstream of the society. This is one area which I hope I can contribute through this blog and I hope to engage readers out there.

(ps: Actually am testing whether blogging through iPhone is manageable, quite good 🙂 )

Buku Jingga: A Testament of Political Communion

(This is an article on Buku Jingga that I wrote for Selangor Times)

I have spoken and written on Pakatan Rakyat’s Buku Jingga on numerous occasions lately that it feels very trite to repeat it here. When I received a request for a write up on Buku Jingga in Selangor Times, I had to think hard on what to write.

The staying power of Buku Jingga so far is a source of minor pride for the people in Pakatan Rakyat Secretariat, because it did not occur to us that it would stay in the news this long. Policy announcements are a bit of a conundrum to Pakatan Rakyat – it takes a lot of efforts and time to research and develop a new set of policies that can contrast the existing Barisan Nasional policies; yet more often than not such policy announcements come and go without much impact to the public.

There are some of us who after a while become quite wary when asked to develop “policies” for Pakatan. I joined the cogs and wheels of KEADILAN (and by extension Pakatan Rakyat) almost two years ago, armed with idealism to the teeth with the sole aim of contributing to the emergence of a two-party system in Malaysia. The ideal two-party system that comes with a complete set of shadow cabinet and distinctively different policies between one another, so that our fledgling democracy can make its leaps and bounds into the future.

I remember the early days of asking and criticising internally of the supposed policy weaknesses of Pakatan Rakyat. Sometimes I grumbled that we did not unveil new policies; sometimes I whined that we spent too much time engaging in non-productive political rhetoric. “People want to evaluate our policies” so I said over and over again to the younger set of party leaders.

Along the way, as I was given more tasks on policies within the party, I realised that the bigger challenge for Pakatan Rakyat is not really the formulation of policies. Ideas are abound, in fact too many that it takes a while to pick up the well researched ones from the not so well thought of. But we were never short of policy ideas – I guess there are many things to fix after 54-year rule of Umno/Barisan Nasional that each has his/her laundry list of what needs to be done differently.

The most difficult part of the process to promote new policies (so that the public can contrast the policies of the different parties and make informed choices, as how matured democracies are meant to function) is keeping the attention on the new policies long enough for it to be cascaded down to the public, because we operate in a media environment that is ridiculously hostile to Pakatan Rakyat.

I remember working with representatives from DAP (YB Tony Pua and YB Liew Chin Tong) and PAS (YB Dr Dzulkefly Ahmad) on Pakatan’s response to NEM. We spent weeks to produce a thick document that set out our core criticism against NEM. In the end, in spite of its unveiling in Dewan Rakyat, it only lasted in the news for a day and till this day, Pakatan Rakyat is being accused of not responding to NEM.

Given this background, after a while I became quite cynical with the middle class’ assertion that to function as a national opposition coalition, Pakatan Rakyat must constantly unveil its policies. I took comfort that there are enough people working on voluntary basis behind the scene who are able to focus on policies and provide the right input to the top leadership of Pakatan Rakyat. Until the media in Malaysia is liberated, too much focus on policy developments is akin to training our guns on a wrong target as elections are not won purely on the merits of policies (well, at least in Malaysia).

Buku Jingga was developed with that kind of reality check, knowing that it may not gain enough traction on the ground to last a week. But the team was quite determined to expand the Common Policy Framework into a decent policy document; as a basis for future policy discussions. Articulating the common principles spelt out in Common Policy Framework that was endorsed by Pakatan Rakyat in 2009 was important not just because it would boost up our policy credentials, it was an important test of cohesiveness between the three parties in Pakatan Rakyat.

The idea to come up with a pocket book that can be easily memorised originated from Khalid Jaafar, who along with Saifuddin Nasution Ismail, Tian Chua and Dato’ Chua Jui Meng represented KEADILAN. PAS’ representatives (Salehuddin Ayob, Dr Hatta Ramli, Dr Dzulkefly Ahmad and Dr Mujahid Yusuf) vetted the text word by word and made major changes to the way the case was presented throughout the book. Anthony Loke, Tony Pua, Liew Chin Tong and Theresa Kok from DAP insisted on a summary of programs that the public will remember instantly each time they talk about Buku Jingga.

If there was one memorable achievement of Buku Jingga, it is that the process to produce Buku Jingga has become a living proof that the union of the parties in Pakatan Rakyat has long passed the stage of nascent political cooperation. The ease at which the representatives from all the parties discussed and worked towards a common solution for each issue speaks volume of the political understanding within Pakatan Rakyat.

This to me is a much bigger (and potent) achievement than the ability to present the rakyat a set of alternative policies, though Pakatan Rakyat is often accused of not spending enough efforts and time on policies. Our political enemies may try to drive a wedge and use the full media force at their disposal to break this political union, knowing full well that a united Pakatan Rakyat is the surest sign that Barisan Nasional’s reign will come to an end soon.

But the single-mindedness to undo the damage caused by Barisan Nasional’s 54-year rule has gone beyond mere political expediency. It has bound individual leaders and activists in the three parties in Pakatan Rakyat to stay on this path no matter what challenges lie ahead (this sounds corny, but I lost for words looking at the dark clouds outside ;-).

Buku Jingga is a manifestation of the political maturity in Pakatan Rakyat. The judge is still out there as to whether Buku Jingga has the staying power to capture the public’s imagination and makes a difference in the next general election, but one can only be optimistic. After all, we did not expect it to last one week in the news!

Response to Umno Youth Chief’s Criticism of Buku Jingga: RM28 Billion Lost Is Real!

Pakatan Rakyat’s Buku Jingga has been a centre of much debate since its unveiling in December. Ironically, the immediate response on Buku Jingga by Barisan Nasional’s top leadership has added weight to its instant fame, not least when the Prime Minister himself promised to present to the nation a point-by-point rebuttal of the reforms outlined. While the nation is still waiting for the point-by-point rebuttal from the Prime Minister (either in the form of published article or through a live debate with the Leader of Opposition), Umno’s Youth Chief has kindly set out a basis for an exchange of arguments on the merits of Pakatan Rakyat’s Buku Jingga.

I must commend him for the efforts, although he only commented on 3 points out of the 10-point reform programs.  There was no response whatsoever on the commitment to restore the independence and integrity of the key national institutions of the nation such as the judiciary, Royal Malaysian Police and AG Chamber. Nor was there any mention of our promise to abolish ISA.

I would understand why he was silent on our commitment to make water a public asset of the rakyat and the pledge to guarantee availability of free wi-fi internet service to all urban and semi-urban areas; because Pakatan states are already striving to achieve this since taking over. Nevertheless, he could at least share with the rakyat why he thought it is not possible to set up a Royal Commission to decidedly resolve the problems of immigration and citizenship in Sabah; or what has been stopping BN’s Federal Government from raising the royalty for hydrocarbon extraction to states to 20%?

Irrespective of my personal feeling of the incompleteness of the response, I shall present Pakatan Rakyat’s arguments on the key issues raised by him last week.

He questioned the accuracy of the RM28 billion estimate of the public monies lost each year due to leakages, corruption and shoddy procurement practices, on the basis that it was not specifically reported in the Auditor General’s Report. My good colleague must understand the nature of audit and how audits are conducted. Having spent a good portion of my professional life as a chartered accountant and an auditor, I must impress on the public that audits are carried out on the basis of sampling. We test samples of transactions to estimate the extent and nature of the financial and operational positions.

The RM28 billion exact figure may not be reported explicitly in the AG’s Report, but the results of the audit clearly point to leakages of that proportion based on the extent of over-pricing and over-spending of individual items; as well as losses due to mismanagement detected during field audits.

One only has to peruse up to the quarter of the AG’s Report to understand the magnitude of the leakages. Let me give a few easy examples.

In the 2008 AG’s Report, it was revealed that the Federal Government had to bear an estimated loss of RM1.14 billion due to the mismanagement of the electrified double-tracking project between Rawang and Ipoh. Another RM500 million of taxpayers’ money was used to set off the accumulated losses of government’s investment in the US-based Columbia Aircarft Manufacturing Corp.

We should not forget too easily the shock that the nation had to endure when we discovered that taxpayers’ money paid for a RM42,320 laptop; perhaps the most expensive in the world. Or the gasp when we realised government departments paid RM262,256 maintenance cost of a Perdana over a 4 year period, when a market estimate is only RM15,000.

It feels only yesterday that the AG rapped the Youth & Sports Ministry for a series of out-of-this-world purchases; including  a RM224 screw-driver set, a RM5,700 car jack or a RM8,254 digital camera – when the market price per piece was RM40, RM50 and RM2,990 respectively.

My good friend can argue on technical ground that the RM28 billion was never reported per se in the AG’s Report, but his argument is out of touch with the reality on the ground. The excesses and huge leakages due to the mismanagement and BN’s lackadaisical attitude in combating corruption are real.

The examples cited in the AG’s Report are reflected annually in the overall financial position of the government. The financial indiscipline due to the lack of political will to impose good governance; has caused over-spending each year beyond what was approved for the annual spending budget.

Take the 2009 AG’s Report for example, released in June 2010 (the latest report available). In 2009, the Federal Government over spent by a whopping amount of RM4.83 billion above what was approved for its operational expenses. More alarming was the fact that this malpractice of financial indiscipline has persisted over the years – in between 2005 and 2009; the Federal Government’s cumulative overspending on operational expenses was RM19.41 billion.

Over the same period, the Federal Government’s development expenditure had also exceeded the approved budget for RMK9 by 34%. 42 projects listed as RMK9 projects exceeded the approved budget by a total amount of RM3.74 billion; topped by the defence procurement by a ministry previously helmed by the Prime Minister.

I can go on and list other numbers especially the amount of loans guaranteed or given to GLCs and government bodies; which forms a significant financial risk and liability to the Federal Government. By the end of 2009, the Federal Government guaranteed a total of RM84 billion in loans to 20 GLCs and 2 government bodies. If my good friend finds it difficult to comprehend the magnitude of this, we have to refresh our memories on the PKFZ loan guarantee fiasco which saddled the Federal Government with billions worth of debts.

Or he can visit my hometown of Kemaman to grapple with the magnitude of public funds that Perwaja has sucked over the years from the rakyat. As at 31 December 2008, Perwaja owed an amount of RM3 billion worth of debts that fell due on that date to the Federal Government. It was not able to pay; in fact it couldn’t even pay the RM319 million instalment due in 2009 that the loan had to be restructured and paid over a longer term. Such was an instance of a series of financial imprudence when public funds are used to subsidise the corporate companies. In 2009, 45.7% out of the 70 loans worth billions of ringgit given to corporate companies could not be serviced on time.

I listed all these examples published in the AG’s Report to provide a glimpse of the extent of leakages, over spending, financial indiscipline and corruption that are rampant in this country. The figures cited are bona fide audited figures presented to Dewan Rakyat by the Auditor General. These figures on their own, without the need to extrapolate and estimate as alleged by my good friend; already amount to billions of ringgit each year.

So, our basis for estimating that there is a potential saving of RM28 billion if we fix the leakages, mismanagement and corruption has its merits; corroborated by years’ worth of AG’s Reports. In fact, some quarters even believe that the estimate is conservative.

When Pakatan Rakyat takes over, with a single-mindedness for political and economic reforms, there is a room to return the RM28 billion back to the people in the form of the programs outlined in Buku Jingga.

I have an equally long explanation backed by facts and figures for the other 3 points raised by the good gentleman on gas subsidies/IPP, GLC and affordability of the RM500 teaching allowance; but it will have to be in different instalments of my column as the space does not allow it.

But I hope, this “point-of-information” (POI, as we often refer to interjections in debating tournaments) is enough to enlighten the public for today. I trust there will be more such debates in the press (through various writings) after this since my good friend has not responded to a debate challenge, so I shall keep the other points for the future!

This response was published in The Edge

Najib Should Focus On Managing The Economy, Not Witch-Hunting Pakatan Rakyat Leaders

Parti Keadilan Rakyat is appalled to discover the length that Prime Minister Dato’ Seri Najib Tun Razak had gone to push the Saudi Government for a probe on alleged Saudi’s funding of opposition parties in Malaysia, especially when he had not responded to mounting calls for an all-party probe on GFI (Global Financial Integrity) report that Malaysia’s illicit fund outflows reached USD291 billion (equivalent to RM888 billion) for the period 2000 to 2008.

The Prime Minister’s act of abusing a diplomatic channel to press for a probe against a democratically elected Leader of Opposition is scandalous enough, though not as shocking as his lackadaisical attitude towards the GFI report.

It is symptomatic of Umno/BN’s obsession with character assassination as the only way to meet political challenge. When challenged for a debate on Pakatan Rakyat’s Buku Jingga, the Prime Minister resorted to personal attacks. In the midst of widespread concerns of his administration’s ability to resuscitate private investments and stemming out the average annual illicit fund outflows of USD32 billion (equivalent to RM98 billion annually), we discover that he was more pre-occupied with personal probe on Dato’ Seri Anwar Ibrahim.

The GFI report demands a closer scrutiny especially when the method and data used are bona fide and globally accepted. The method is based on the World Bank Residual model which uses the change in external debt (through balance of payments data) to determine unrecorded capital leakages. These capital leakages are often caused by proceeds of bribery, theft, kickbacks and tax evasion. This model is universally accepted and it is unbecoming of a certain Deputy Minister of International Trade to question the veracity of the model. The data used in the model is available publicly and announced by Bank Negara Malaysia periodically.

In light of this, any Finance Minister would have been alarmed, especially when Bank Negara Malaysia’s own statistics show a persistent large negative “errors and omissions” since 2005. “Errors and omissions” in the Balance of Payments corresponds to a balancing figure to account for statistical inaccuracies and incomplete reporting of financial flows monitored by a central bank. A negative “errors and omissions” simply means that either the outflows have been underestimated (more funds leaving the country than officially reported) or the inflows have been overestimated (or a combination of both).

Since 2005, Malaysia has recorded a large negative “errors and omissions” in its Balance of Payment as follows:

 

Year

Negative “errors and omissions” in RM billion

2005

27.8

2006

27.4

2007

17.8

2008

29.9

2009

17.9

Source: Bank Negara Malaysia, November 2010

The total sum of probable underestimation of outflows reported by Bank Negara Malaysia in between 2005 and 2009 is RM120.8 billion – an official statistic from the Government of Malaysia that provides a degree of correlation to GFI report on the illicit fund outflows of the country.

Given the gravity of this, it is best that the Prime Minister concentrates on managing the country’s economy prudently and act promptly on alarming revelations contained in GFI report. He has no business going around abusing the diplomatic channel to undermine Pakatan Rakyat and Dato’ Seri Anwar Ibrahim.

Finally the table is turned around – Umno/BN’s accusation that Pakatan Rakyat utilises an international networking for political advantage now rings hollow in light of the Prime Minister’s own behaviour.

MOHD RAFIZI RAMLI

DIRECTOR OF STRATEGY

28 JANUARY 2011

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