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Monday, 13 August 2012

Malaysian leaders should learn from Deng Xiaoping?

It’s all about leadership

Recent Asian political history provides us with some useful examples of effective leadership. However, the list, sadly, is not long.

WITH a general election in the offing, Malaysians are quite naturally thinking a lot about “leadership”.

Recent Asian political history provides us with some useful examples of effective leadership.

However, the list, sadly, is not long. Many of the men (and women) who have led our countries have also been deeply flawed.

For example, in the case of Jawaharlal Nehru, his ideas and rhetoric may well have been brilliant but his performance in government was often disappointing, if not disastrous.


Deng Xiaoping, conversely, stands out among Asia’s leaders. He’s also the subject of a recently published biography by the academic Ezra Vogel, Deng Xiaoping and the Transformation of China.

First, Deng did more to alleviate global poverty than anyone else in the past century. According to Bloomberg, more than 250 million Chinese escaped poverty during his stewardship.

Described by Mao Zedong as a “needle inside a ball of cotton”, the Szechuan province-born Deng rose to the top of the Chinese Communist Party (CCP) and its Politburo after a long, arduous process, including two periods in political wilderness, the first of which was the Cultural Revolution.

By 1978, when he was returned to the centre of power, China was at its lowest ebb. As Vogel wrote: “The average per capita income of Chinese peasants, who made up 80% of the population, was then only US$40 per year (RM124). The amount of grain produced per person had fallen below what it had been in 1957.”

But China was lucky to have Deng at this critical juncture. By the late 1970s, Deng had accumulated more than 50 years of experience at the heart of the CCP, the military, high-level diplomacy and governance.

Deng was experienced, wily, determined and above all, extremely pragmatic.

Moreover, his family’s personal tragedy during the Cultural Revolution – his son Deng Pufang was crippled after being beaten by the Red Guards – made his desire to stabilise and strengthen China all the more intense.

Deng was lucky enough to have met and worked with outstanding leaders. For example, while studying in France in the mid-1920s, he was to forge a critical friendship with Zhou Enlai, who – in turn – grew to respect the diminutive but rock-solid Deng.

Similarly, in the years when the Communists were battling the Nationalists, Deng assumed a vital military role – leading men into battle; motivating, coordinating and administering hundreds of thousands troops, their supplies and their relations with the local communities.

His most enduring success was the Huaihai Campaign of 1948, after which the Communists were able to cross the Yangtze River without resistance, dealing a fatal blow to the Kuomintang and endearing Deng to Mao himself.

So while Deng is better-known for his achievements in the economic sphere – especially his transformation of the coastal provinces in the late 1970s and early 1980s – there’s no denying that his military experience in the field equipped him mentally to lead under pressure.

Having endured the chaos of the Cultural Revolution, Deng was understandably wary of relaxing political controls. He was no democrat. Instead, he saw discipline and loyalty to the CCP as absolutely critical.

Indeed, Tiananmen Square was proof his unshakeable belief in both the primacy of the CCP as well as the need for political stability at all costs.

Whilst we may disagree with what he did, there’s no denying his steadfastness.

Deng was detailed and meticulous in all matters – managing China’s administration with a firm hand.

Fortunately, his international exposure at an early age meant Deng was open to foreign ideas and when it was time for him to lead China; he was ready to embrace the world beyond the Middle Kingdom.

So what can Deng teach us about leadership? I think the following lessons can be drawn:

> Lead decisively and with conviction. If you make a decision you believe is right, stick by it. People respect (and fear) determination;

> Deng believed in education. He rebuilt China’s shattered universities after the Cultural Revolution and shielded the centres of learning from political interference;

> Leaders must prioritise, dealing with only the most critical obstacles to development. On assuming power, Deng took a close personal interest in overcoming the infrastructural glitches and political resistance to reform at Xuzhou’s critical railway hub – thereby sending out a strong message to those who dared challenge his authority; and

> Deng laid the foundations for China’s current, albeit uneven rise to power. His legacy is something Malaysian leaders should not ignore.

Ceritalah By Karim Raslan  

Get married and have babies, LKY to Singaporeans!

Migrants are a temporary solution, in the long term, mindsets must change, former PM says




Singaporeans need to marry and have children if they do not want the country to fold up, Mr Lee Kuan Yew warned on Saturday night.

In his annual National Day dinner speech to residents of Tanjong Pagar GRC and Tiong Bahru, Mr Lee kept his message on population simple: The country's citizens are not reproducing enough, and migrants are needed as a temporary solution.

But in the long run, mindsets must change, and the trend of declining birth rates needs to be reversed.

"If we go on like that, this place will fold up because there will be no original citizens left to form the majority," he said.

|And we cannot have new citizens, new PRs to settle our social ethos, our social spirit, our social norms,” he said, noting that Chinese reproduction rate is now at 1.08, Indians at 1.09 and Malays at 1.64.

“So my message is a simple one. The answer is very difficult but the problems, if we don’t find the answers, are enormous,” he added.

Lee acknowledged the pivotal role that work permit holders have played in building Singapore’s infrastructure, and the contribution of permanent residents, without which he said the country’s population would be older, smaller and would lose vitality.

Further, he noted that in the long term, Singapore’s “educated men and women must decide whether to replace themselves in the next generation”. Currently, 31 per cent of women and 41 per cent of men are choosing not to do so, he noted.

“But we’ve got to persuade people to understand that getting married is important, having children is important,” he said. “Do we want to replace ourselves or do we want to shrink and get older and be replaced by migrants and work permit holders? That’s the simple question.”

MSF to tackle problem: Chan Chun Sing

Responding to Lee’s call for solutions to Singapore’s citizen population crunch, current acting Minister for Community Development, Youth and Sports Chan Chun Sing, who will be taking on the newly-established Ministry of Social and Family development (MSF), said the latter will pursue efforts to encourage younger Singaporeans get married and start families earlier.

Speaking to reporters on the sidelines of the same event, Chan acknowledged that the issues are “challenges that cut across different ministries”, and said there are two aspects to the population situation — material and economic, which the government will work on, reported Channel NewsAsia.

“But like what Mr Lee said, the most important aspect has to do with the less tangible... (what) we value as a society — the institution of the family,” he said as quoted by the media outlet. “How do we see the institution, and the family... these are things we really need to work on as a society because it concerns our common future.”

- The Straits Times/Asia News Network

Sunday, 12 August 2012

Malaysia's loan growth strong in sight

Analysts still bullish on strong loan expansion

PETALING JAYA: Despite slower banking loan growth indicators for June, analysts and industry observers are still bullish of a double-digit loan growth this year.

 Malaysian Rating Corp Bhd (MARC) chief economist Nor Zahidi Alias said on the whole, the rating agency still foresee a relatively strong expansion in loans this year, notwithstanding the recent dip in loan applications and approvals.

Strong corporate demand would likely offset the moderation in household demand for loans, he said, adding that the agency envisaged loan growth to moderate slightly to about 10% to 11% this year amid the weaknesses in the external environment.

<B>Nor Zahidi:</B> “Loans have expanded at a relatively strong pace.’ Nor Zahidi:Loans have expanded at a relatively strong pace.’
“The banking sector's loan growth has remained resilient despite a slowdown in the country's economic activity as reflected in slower GDP growth in the past few quarters. Overall, loans have expanded by double-digit rates in the first six months of the year, after reaching the peak of 13.8% in September 2011.

“At the end of June, loans expanded at a relatively strong pace of 12.6%, supported by strong corporate demand for loans which grew by 13.6% year-on-year, offsetting the slower pace of loans to the household sector. Household sector's loan growth had softened to 11.8% in June from a cyclical high of 13.9% in November 2010, Nor Zahidi told StarBiz.

Based on Bank Negara's latest banking statistics for June 2012, loan growth was stable at 12.6% year-on-year versus 12.5% in May the same year. The growth was slightly higher for both consumer and business loans at 11.8% and 13.6%, respectively, in June.

The growth in loan applications moderated from 15.1% in May to 10.5% in June, while approvals contracted by 2.1% year-on-year, versus an increase of 18.2% in May. On an annualised basis, loans grew by 12.7% in June compared with 11.4% in May.

The pace of loan applications and approvals has been volatile partly due to the responsible lending guidelines. In the first six months of this year, the average growth in loan applications fell to 14.9% year-on-year compared with an average expansion of 25.5% recorded in the similar period last year. The average growth rate in loan approvals during the period shrunk to 2.8% against 22.6% average expansion in the first half of last year.

RAM Ratings head of financial institution ratings Wong Yin Ching said the total banking system's year-to-date loan growth was 6.4% in the first half compared with 13.6% for the whole of last year, adding that the growth was driven by lending for purchase of residential properties, working-capital financing, as well as financing for purchase of non-residential properties.

“We expect the growth momentum to be sustained in the second half of this year supported by stronger financing demand from the corporate and commercial sector, as the rollout of projects under the Economic Transformation Programme (ETP) and 10th Malaysia Plan gradually gains traction. In recent months, we have observed a pick-up in loan applications from the business and services sectors,” she noted.

Wong expects household loan growth to moderate following the various prudential measures introduced since late 2010. To this end, she said it had seen a sharp slowdown in loans extended for personal use, which only grew by 3.2% in the first half of 2011 (full-year: 20.1%).

Loan growth for residential mortgages also moderated slightly to 6.3% in the first half of 2011 (full-year: 13.2%). She said the rating agency also noted a slight shift towards lending for the purchase of non-residential properties following the tighter criteria for residential property financing.

Meanwhile, Alliance Research Cheah King Yoong said the brokerage was maintaining its forecast of 11 % domestic loan growth this year, for now. Nonetheless, he said it foresaw there was increasing likelihood of an upside risk to its 11% domestic loan growth forecast in view of the strong pick-up of loans in June.

Should the loan growth momentum continue to be sustained in the second half with ETP related loans gaining pace, Cheah added he would not be surprised if this year loan growth could match last year's growth of 13.6%.

Based on the latest statistics, although property loans remained the key driver, where loans to purchase residential and non-residential properties constitute 46% of the annualised 12.7% loan growth for June, he said loans for “other purpose” and working capital had been gathering pace, contributing 28.8% and 22.3% of the loan growth drivers respectively.

He said business loans had recorded a commendable annualised growth of 15.9%, ahead of household loans' annualised growth rate of 10.1%.

Cheah said this reaffirmed Alliance Research's expectations that despite having a slow start in early 2012, overall domestic lending activities were picking up, with stronger growth of business loans stemming from the roll out of ETP's Entry Point Projects, which filled up the vacuum left by the moderation in property loans.

Kenanga Research said despite the lending indicators showing a slowdown, it still believed loan growth would be able to outperform its industry forecast this year.

“Having already achieved a 12.6% loan growth this month, we believe that the banking industry will be able to outperform our industry loan growth forecast of 11% to 13% despite a slightly weaker set of lending indicators,'' it noted.

A banking analyst with a bank backed brokerage felt it was too premature to indicate whether loan growth for the second half would pick up solely based on slower loan indicators alone. Loan growth may slow down in the second half but much would depend on how the results season pans out, he said, adding that, nonetheless, he still expected loan growth this year to be around 10.5%.

By DALJIT DHESI daljit@thestar.com.my