A neighbour underestimated

Tweet

Ceritalah by KARIM RASLAN

The buoyant statistics coming out of East Kalimantan underline the extent to which the once-poor neighbour has eclipsed Sabah. And until Sabahans can exorcise their ghosts, Indonesia will remain an untapped mirage.
Image via Wikipedia
WE are living in an age of tremendous financial turmoil. Currency and equity market gyrations have dramatically altered relations between nations and entire regions. Indeed, the decline of US and European competitiveness and the attendant acceleration of Chinese wealth have been the most note-worthy developments.

What is less well-documented is the fact that these trends have also led to significant changes within South-East Asia with China’s (and India’s) hunger for natural resources driving prices ever higher.
This is most apparent on the island of Borneo.

In 2010, the GDP per capita in Sabah was RM8,450. By way of comparison, the GDP per capita in the neighbouring Indonesian province of East Kalimantan (or Kaltim) was over US$4,000 (RM12,000).



While the Kaltim statistics are inflated by skyrocketing coal, as well as oil and gas prices, the reality shows a marked increase in living standards for the province’s 3.2 million people.

In fact, Kaltim’s booming economy is also contributing to Sabah’s shortage of labour for the plantation sector.

Meanwhile, decentralisation initiatives (dubbed regional autonomy) meant that a greater proportion of the natural resource bounty was being retained locally.

Kaltim is Indonesia’s largest producer of both coal and oil/gas. At the same time there are plans to increase palm oil planting to well over 1.5 million hectares.

Balikpapan – the premier commercial hub with a population over 600,000 – is also a major transport and services hub.

The city’s Sepinggan airport (with over five million passengers a year) is Indonesia’s fourth busiest.

The buoyant statistics coming out of Kaltim underline the extent to which the once-poor neighbour has eclipsed Sabah and indeed Malaysia.

This is all the more ironic given the fact that for many decades Sabahans have felt imperilled by what they’ve perceived as waves of “desperately poor” Indonesians and Filipinos pressing at their borders.

Indeed, the control (or lack of it) of migrant workers has been an enormously controversial issue in Kota Kinabalu.

Sabah’s exponential population growth – most notably in the 1980s when naturalisation policies (covert or otherwise) were at their most pronounced – witnessed a dramatic increase from 929,992 in 1980 to 1,734,685 in 1990.

Indeed, it is arguable that Sabahans have been traumatised by the massive influx of illegals.

The state’s indigenous communities have seen their demographic and political leadership whittled away.
Unsurprisingly, they are deeply suspicious of Indonesians and Filipinos.

All this has made it difficult for Sabah to leverage Indonesia’s current prosperity despite the state’s strategic location.

Sabah has very poor connectivity with Kaltim, so much so that even the lengthy land border lacks formal road crossings.

Still, Indonesians – including Awang Faroek, Kaltim’s Governor – are lobbying hard for a link at Serudong along the Tawau/Kota Kinabalu road.

In the absence of an overland crossing, hundreds of thousands of Indonesian workers in Sabah have been forced to travel by ferry through Tawau’s meagre and unimpressive port facilities.

By way of comparison, the Entikong crossing between Sarawak and West Kalimantan has become a major thoroughfare with countless buses plying the route linking Pontianak and Kuching.

Moreover, it is estimated that some 3,000 Indonesian students are currently studying in Kuching’s many private educational institutions.

At the same time, direct flights (on local carrier, Kalstar) linking the two cities have further enhanced connectivity and opportunities for businessmen on both sides of the border.

Kota Kinabalu and Balikpapan are like step-sisters. A journey between the two cities requires an awkward and time-consuming detour through either Kuala Lumpur, Singapore or Jakarta.

The alternative is the nerve-wracking ferry from Tawau to either Nunukan or Tarakan ... neither of which are particularly attractive for tourists or business travellers.

But Kota Kinabalu remains a superb destination.

With its waterfront lifestyle, schools, hospitals and international flights, the city is poised to become a popular hub for Indonesians – from as far away as Banjarmasin, Makassar, Samarinda and Manado.

It is worth noting that all four cities are beneficiaries of the natural resources boom and growing faster than the national average.

Indeed, other Malaysian cities such as Penang and Malacca have become adept at tapping the Indonesian demand for healthcare, education, housing and retail.

It remains to be seen whether the socio-political trauma of past decades could be overcome to allow Sabah to maximise these opportunities.

However, thankfully, some of Sabah’s leaders are beginning to recognise their neighbour’s vast potential.

Flamboyant former chief minister Datuk Harris Salleh has been a major promoter of the cross-Borneo linkages.

Last year, he undertook a highly publicised tour across Indonesian Kalimantan.

Similar sentiments are raised by Sabah Economic Development and Investment Authority CEO Yaakub Johari who confidently said: “History aside, we see Sabah acting as a conduit between an expanding Indonesia and the dynamic Northeast Asian markets.

“Enhanced connectivity whether by land, air or sea is a must.”

Until Sabah and Sabahans can exorcise their ghosts, Indonesia will remain an untapped mirage.

Malaysian Election Reform: a panel for free and fair polls

Tweet

A panel for free and fair polls

Comment by BARADAN KUPPUSAMY

 For the select committee on electoral reform to be successful, there is a need for all parties to put aside partisan politics and work for what matters most – the best interest of the rakyat.

PAKATAN Rakyat should give a chance for the Parliamentary Select Committee to be formed and do its job of investigating and suggesting changes to the country’s electoral system.

As it is, their MPs have issued numerous statements ranging from outright boycott of the select committee to agreeing to participate but on their own terms.

They want Pakatan leader Datuk Seri Anwar Ibrahim to head the panel, increase the number of Pakatan panel members from the current three or, alternatively, not to give independent MPs a place in the committee.

They also want the assurance that Prime Minister Datuk Seri Najib Tun Razak will not call for a general election before a full, complete report of the panel is published and the recommendations implemented.
 
Najib has said the reforms could be divided into immediate reforms and long term ones; immediate reforms could be implemented before the next general election.

But he has rejected outright the idea of reform first and a general election later, saying the Government reserves the right to call for a general election at any time.
 
Pakatan Rakyat is due to make known its stand on the matter soon, according to PAS deputy president Mohamed Sabu.

While Pakatan Rakyat decides, Parliament is set to debate a motion on the formation of the select committee on Oct 3, which will also include its terms of reference and possibly the members of the committee.

A parliamentary select committee, as the name suggests, is a committee of the House and tasked to deliberate on matters of concern; in this case, on election and the electoral process and submit a report to Parliament and make recommendations which can lead to changes in the relevant laws.

Select committee members must be MPs and exercise all the powers of Parliament to make inquiries, inspect documents, call experts witnesses and go on road shows around the country for evidence gathering.



They must act in a non-partisan manner as Parliament is supposed to be – that is, to act in the best interest of the rakyat.

That is why a select committee is headed by a minister of the Government of the day which has a majority in the House.

It is the Government that decides that the election system needs reforming and carries out the task of forming the select committee.

It is inappropriate for Pakatan Rakyat to demand that it head the select committee because it is the Government’s right to reserve that position for itself.

This means Anwar cannot be head of the select committee but he can be a member of the panel, if he so chooses.

Besides, such a committee has no place for an NGO leader or a civilian because parliamentary convention allows only MPs to be members of the committee.

But they can be called as experts witnesses to aid the committee in carrying out its duties which, hopefully, is the manner in which Bersih leaders will be engaged.

The Government’s right of way also includes having a majority in the select committee but that majority should be proportionate to its membership in Parliament.

Giving Pakatan Rakyat parties three places in the committee is also fair when the Government only reserves for itself five places, which is quite proportionate to the respective representation of Parlia­ment.

The only issue that Pakatan Rakyat can raise is the allocation of one place to the nine independent MPs who act as a bloc in Parlia­ment.

The independents are not true independents but former PKR MPs who defected and now stand with the Government on any issue in Parliament.

Giving them a place seems unjustified but they, too, might have a cause to present.

The nearest thing we have had to a successful select committee, in recent times, was the 2004 select committee on the Penal Code and Criminal Procedure Code that was headed by Datuk Seri Radzi Sheikh Ahmad.

It heard expert witnesses and made numerous recommendations.

This eventually led to amendments to both codes in 2006 that helped to strengthen the fundamental liberties of arrested persons, among other changes.

This current committee will also see changes to the election rules and process if given a chance to be formed and conduct its work.

Therefore, it is incumbent on the Pakatan Rakyat MPs to set aside partisan politics and work together to ensure that the people get what want – a free and fair election.

Layoffs sweep Wall Street, along with low morale

Tweet

By Lauren Tara LaCapra  NEW YORK

(Reuters) - In early summer, before layoffs began sweeping across Wall Street, billboard-sized photos of employees were plastered on the walls, pillars and elevator banks of Credit Suisse Group AG's offices in the United States and abroad.

The museum-quality prints, depicting workers from administrative assistants to senior executives, were emblazoned with motivational words like "Proactive" and "Partner." By mid-July, however, the photos disappeared and the Swiss banking giant began laying off 2,000 employees.

Security guards prevented employees from taking cell-phone pictures as the posters were stripped away, according to one employee who was present.

"It sent an entirely wrong message," said an employee, who was not authorized to speak publicly. "Management literally threw away that kind of money on something so trivial, while planning to cut thousands of jobs."

A bank spokeswoman declined to comment on the internal campaign or the employee's comments.

Credit Suisse's timing illustrates the unanticipated dangers of rampant job-cutting, which tend to run in cycles on Wall Street. Employee morale often plummets at a time when survivors are asked to pick up more responsibility and customer relations can suffer as service and relationships deteriorate.



CUTTING 'MUSCLE AND BONE'

What's more, layoffs inartfully constructed can come across to shareholders as Band-Aid solutions that at best temporarily cut expenses and at worst pare away reserves of talented people.

"They finished cutting the fat and now they're into the muscle and bone," said Tim White, a managing partner who specializes in wealth management at the recruiting firm Kaye/Bassman International in Dallas.

Credit Suisse has plenty of company in its cost-cutting campaign. HSBC, Barclays PLC, Goldman Sachs Group Inc and Bank of New York Mellon Corp have announced plans to ax thousands of workers in recent months. On Thursday, Bank of America Corp Chief Executive Brian Moynihan sent a memo to senior executives outlining plans to cut another 3,500 jobs.

The planned cuts at Bank of America have pushed the number of financial sector layoffs this year to 18,252 -- 6 percent higher than in the comparable period in 2010, according to Challenger, Gray & Christmas, an outplacement firm that keeps a daily tab on layoff announcements.

Some companies began the culling earlier this year -- HSBC has already axed about 5,000 employees, with 25,000 more set to get pink slips by the end of 2012 -- and others, such as Goldman Sachs, said that cuts will come by year's end.

That is not good for morale.

BITING INTO CLIENT SERVICE

Hours have become longer, trading floors have more open seats and fresh young faces are taking over offices where high-level personnel once sat. The highest-paid people can be easy targets for layoffs now, given the cost of keeping them employed and the eagerness of younger workers to take on their roles, even at less pay, executive recruiters said.

Changes in pay structures mandated in part by the Dodd-Frank financial reform laws have exacerbated the problem.

Banks that used to pay modest base salaries supplemented by opulent stock-and-option packages that encouraged meeting short-term performance goals now are weighting compensation toward base salary.

Managing directors at investment banks have seen a typical base salary double to $400,000, said Paul Sorbera, president of Alliance Consulting. Meanwhile, 2011 bonuses are expected to fall by up to 30 percent for top earners, according to pay consulting firm Johnson Associates.

The shift erodes Wall Street's former flexibility to lower end-of-year bonuses in bad times and forces a heavier reliance on layoffs.

The danger is that client service suffers.

"Banking clients abhor relationship-manager turnover," said Heather Hammond, a senior member of Russell Reynolds' financial services practice.

Investors, for their part, tend to view cost-cutting as a short-term solution that fails to address fundamental issues relating to capital, strategy and the ability to endure through hard economic times.

At Credit Suisse, some senior jobs have been consolidated as executives have been escorted toward early retirement with offers of bonus bridges and other payments, sources familiar with the matter say.

Managing directors in businesses that have missed revenue targets have been told to reduce millions of dollars' worth of headcount expenses, according to a managing director who received such a request. In some areas, including operations, legal and technology, more work is being outsourced and mid-level employees are being replaced by consultants.

"People are leaving resumes on the printers, hoping someone picks it up," the Credit Suisse employee said.

Some sources believe that banks are repeating their typical hiring strategy: Cutting staff levels too deeply in bad times only to rush out with open checkbooks when markets recover.

"When people are getting hired, fired, hired, fired, every two years, it's very difficult to run a business," said Conrad Ciccotello, a finance professor at Georgia State University who has studied the issue. "There is precious human capital destroyed in vicious boom-and-bust cycles that is costly to replace."

(Reporting by Lauren Tara LaCapra; Editing by Richard Chang and Jan paschal)

 Newscribe : get free news in real time