Wednesday, 14 May 2008


13.5.2008 – 2005 HRS

Malaysia’s opposition leader Anwar Ibrahim has predicted that there will be a change of government before Malaysia Day on September 16th. According to Mr. Anwar, support for the Pakatan Rakyat opposition alliance is increasing. However, he declined to provide details on the number of politicians from the ruling Barisan Nasional who switched allegiance. Officials from the United Malays National Organisation or UMNO have admitted that nearly 17 BN Members of Parliament from states such as Sabah and Sarawak could defect to the opposition.
So will Anwar's predictions come true? Shereena Sajeed spoke to Dr. Mavis Puthucheary, Associate Senior Fellow at the Institute of Malaysian and International Studies to find out.

Mavis Puthucheary: “Well I would not say that it is an untruth but there is, I think, considerable negotiations taking place, particularly between BN Members of Parliament in Sarawak and Sabah and Pakatan Rakyat.”

Shereena Sajeed: “As you mentioned also, it’s mainly members from the East Malaysian states like Sabah and Sarawak who could defect and switch sides?”

Mavis Puthucheary: “Well in the case of Sabah and Sarawak, they really have always felt that they have been sidelined and many of the MPs who left the Sabah-based parties like USNO (United Sabah National Organisation) and joined UMNO feel that they are second-class UMNO members within the party so they are using the opportunity now that they have some political leverage to try to improve their position within the BN.”

Shereena Sajeed: “In your opinion, what is the likelihood of a change of government actually taking place before mid-September, as Anwar predicts?”

Mavis Puthucheary: “I definitely don’t think it will come about for the simple reason that even though Sabah MPs are more in line to switch parties, I think within Sarawak, the PPP led by a type, is not likely to want to join the opposition. So they are talking now about 54 MPs crossing over but I do not think that that would actually take place but I do think that there is a strong possibility of some MPs from BN particularly in Sabah, switching sides.”

Shereena Sajeed: “How successful is Anwar’s game-plan in terms of swaying supporters from within UMNO to switch sides and support the Pakatan Rakyat?”

Mavis Puthucheary: “Well I think the whole game-plan is once there is some indication that the BN is likely to not be able to form the government in September that some people would want to, well just to leave the sinking ship and jump at this point in time. This is like a game of poker.”

Shereena Sajeed: “So what do you predict, in the next three months or so, how do you think this whole situation will pan out?”

Mavis Puthucheary: “Well, it really depends how Abdullah Badawi and the UMNO Supreme Council will respond to the veiled threats that are coming from Sabah and I think Sarawak. Others parties within the BN, not the PPP, but the other parties, particularly the non-Muslim Bumiputeras in Sarawak are also taking the wait-and-see attitude. So it really depends on how the BN government responds to the demands that are now first coming from Sabah but I think may also come from Sarawak at a later date.”

Shereena Sajeed: “What is still unconfirmed is the wat in which these defections should be carried out. According to Anwar’s supporters, the defections should be in a staggered manner. Do you think this is the better route for Anwar to take or could this act to his disadvantage?”

Mavis Puthucheary: “I do think that there are two possibilities; either individuals would leave the BN and the component party within the BN and join the Pakatan Rakyat or there will be a whole party switching sides like Party Bersatu Rakyat Sabah, all the members within the MPs as well as the whole party moving to Pakatan Rakyat. So I don’t know how exactly it will take place. There is some talk also, that these MPs and their parties will leave the BN coalition and first become part of the opposition in Sabah and from that position, negotiate with the Pakatan Rakyat. So it could take place in two stages or it could take place just straight away.”

The Warta Citra Cafe Towkay said: All this talk perhaps, nothing more than hype by the Anuar camp in order to boost their morale. Work harder, we're almost there type of moral boosting. Opinions from across the straits were mere opinion. Its the type of talk we often hear at this cafe. Really, how could one draw conclusions by just talking to few people and confidently predict things going to happen.


Newsline: broadcast over Radio Singapore International on 12 May 2008 2005hrs

Malaysian Prime Minister, Abdullah Badawi has said he will be spending more on fuel subsidies than on major development projects. Mr. Abdullah said the government would spend 45 billion ringgit on fuel subsidies this year to help ease the burden on Malaysians amid soaring energy and food prices. To help fund these subsidies, he is planning to pull back expenditure on all major projects.
Reacting to the announcement, former Prime Minister Mahathir Mohamad has urged the Malaysian leader not to take a populist position, but instead work out how to overcome the current energy and food security issues. How will this affect the country’s development? A question Saifulbahri Ismail asked Dr Denis Hew, senior fellow at the Institute of South East Asian Studies or ISEAS in Singapore.

Denis Hew: “It’s a major setback in terms of development plans, of course as you know we’re in the middle of the 9th Malaysian Plan, which includes of course developing all these economic corridors, the Iskandar Development region, the Northern region as well. So, if parts of these funds are now being allocated for increase subsidies on fuel and food, then of course a lot of these projects will be delayed. I think this is a little worrying because as you know we’re actually concerned about losing our economic competitiveness to countries like China and also India. Many of these projects are meant to enhance our economic competitiveness you see, so I think this is something of a setback.”

Saifulbahri Ismail: “How will cutting back on major projects affect Malaysia’s economic competitiveness in the short, medium and long term? To what extent do you think this will also have an impact on foreign investments into the country and the economic growth of Malaysia?”

Denis Hew: “This year’s economic growth to be honest will be very much like many of our neighboring countries which are very open. It will be mainly affected by external factors. As we know the US is in recession, we also have high oil prices which will affect the economic growth in the developed countries, and since Malaysia is a very open economy, I mean trade is 100 % of GDP, they will mainly be affected by these events. My main concern is that when you look at projects, development projects like the 9th Malaysian plan, these are medium to longer term projects and you need to work on these projects now rather than delay them because it will affect the medium and longer tern economic competitiveness of the country. But for this year, to be honest most of the factors that will affect the growth, and certainly Malaysia’s growth will slow down like many of its neighbors, it will mainly due to external factors particularly the US economy.”

Saifulbahri Ismail: “With global oil prices reaching US$124 a barrel, the impact on Malaysians would be huge. Now how do you think Malaysia can overcome this current energy and food security issues without compromising on national development plans?”

Denis Hew: “Well raising the subsidies is kind of a stop gap measure to provide some relief to Malaysians particularly those who are low income families and households, but you know in the longer term this is not going to directly deal with the whole issue of food security. There have been a number of studies being done by the UN on food security and there are issues more related to production of food, say rice and also distribution and improving the efficiency of food. These are things that need to be tackled which are perhaps more important and also at the ASEAN level, two of our member countries of ASEAN are the major producers of rice, Vietnam and Thailand. So, I think there needs to be a regional mechanism as well, to deal with food security. So, it’s just not a national issue, just concerning Malaysia. It’s a factor that affects the entire region of South East Asia.”

Saifulbahri Ismail: “Due to the costlier price of food, Malaysia’s annual inflation hit a 13-month high of 2.8 percent in March. The government is expected to unveil an anti-inflation plan. Now, what kind of measures can we expect from the cabinet’s anti-inflation committee?”

Denis Hew: “I’m not privy to what plans that they have in terms of fighting inflation, but I guess some of the things that normally is done in terms of monetary policy is to move towards raising interest rates. At the moment I think interest rates have been fairly flat and they’ve not raised interest rates but a standard monetary policy that people would use to try to fight to fight inflation in Malaysia is of course is to raise interest rates. Of course, the other thing is you’re seeing also a gradual appreciation of the ringgit against major currencies like the US dollar, the Euro and others. These are things which will also play a role because it reduces the amount of imported inflation.”

Comments from cafe towkay: These words are assuring. Much have been done by the government to ease the burden of the consumers and the public at large. Considering the last election results which have changed the Malaysian political, economic and social landscape, the government seems to be taking the right steps. However, the cooperation of everyone are needed to ensure the plans work and the inflation rate remains. If these plans failed, I hate to see my customers miffed when a cup of kopitiam would cost them more. So lets throw our support to the government plans.

Wednesday, 7 May 2008


Malaysia is planning to ban subsidized fuel for motorists from Singapore and Thailand. Domestic Trade and Consumer Affairs Minister, Shahrir Samad said that subsidized fuel will be available only to Malaysians. In future, they will have to show their national identity cards when buying fuel. Foreign drivers can still get fuel in Malaysia but they will be charged the full market rate. The minister hopes to implement the system by the end of the year at all petrol stations across the country.

For a reaction on Malaysia’s plans to create a two-tier petrol price, Saifulbahri Ismail, a Radio Singapore International DJ spoke with Dr Michael Li, a transport economist at the Nanyang Technological University in Singapore. Here is some of transcript of the interview.

Michael Li: “My natural reaction is that this change is really overdue for a long time. Subsidised gas is meant for locals so tourists should be charged at the normal rates. You see, I think they didn’t do it either enforcement problems. I think if they decide there will be more debates, trust me, for the next couple of months, how to do it, can they find a foolproof system, it needs some innovation in this process. Sometimes they design such a system to enforce such a scheme, it costs more than charging a normal price. Any regulation, there is a costs of enforcement. If you impose the regulation for the sake of imposing it at the higher cost of doing it, what’s the point of doing this regulation for operational wise it may not be worthwhile to do it.”

Saifulbahri Ismail: “What do you think are some of the challenges in implementing and enforcing this restriction?”

Michael Li: “Gas pumpers can always take bribes, by pumping at lower price, because it’s very difficult to keep track the exact volume and exact identity of certain pumping. So, therefore Singaporeans go there would like to have a local rate, they give a so-called tip, and we’ll get local rate. So that’s actually the bribe. So the enforcement can be a huge problem.”

Saifulbahri Ismail: “The Domestic Trade and Consumer Affairs Ministry has said that they are also looking at introducing a new card for Malaysians which could be used to purchase petrol. This is like an identification tool which is tied to the vehicle. How do think this two-tier petrol price can be enforced effectively?”

Michael Li: “So unless the billing, unless the billing itself capture ID, it cannot enforce it. So in other words whenever you pump, your receipt will capture your ID. Now that makes sense, that’s the only way to solve this problem. Otherwise, it’s difficult. How auditors are going to the gas station, and say hey how much you charge foreigners? Unless the receipt capture the ID of the driver, it’s almost impossible to enforce it.”

Saifulbahri Ismail: “Do you foresee this move to have an effect on the number of Singaporean cars topping up petrol in near-by places like Johor Bahru?”

Michael Li: “As long as the price for tourists or visitors is cheaper than Singapore, I don’t think it will have much impact. If they charge the same price as Singapore, which I think is very unlikely then there will be some impact.”

Saifulbahri Ismail: “Malaysia receives a lot of tourists from Singapore and Thailand which share close borders with the country. To what extent do you think differential petrol prices for visitors will have an impact on tourism in Malaysia?”

Michael Li: “As far as the visitor’s point of view, I don’t think people go to Malaysia specifically for cheap gas. It’s just for convenience. If the purpose of visiting Malaysia is for tour, for many other reasons, the cost of gas to the overall trip cost is very small. So, for that reason I don’t think it will have a huge impact on the tourism side.”

Saifulbahri Ismail: “This move to remove petrol subsidies for foreign motorists stems partly from the fact that the Malaysian government is trying to reduce their spending on fuel subsidies amid rising global oil prices. How much effect do you think this will have on reducing expenditure on fuel subsidies?”

Michael Li: “Well, why they have subsidy in the first place, I think in a way trying to reduce the cost, burden to the people either mainly for the livelihood of many people, so they rely on the petrol. Overall the price will continue to increase, it means that subsidy cannot continue the current level for very-very long time where the oil price now 110. So the pressure for price increase is there. For that, overall price increase might have impact for people who reduce the gas consumption, but bear in mind that the reaction to price changes to gases is very minimal. What I mean in economic jargon, the elasticity for gas is very low. So if you increase 20% the price in gas, you might probably look at 5 to 6% reduction in overall consumption.”

So, do you agree with the point raised or if you differ, please comment