Malaysia's vision 2020 bankcrupt by 2019?

Idris Jala: M’sia must cut subsidies, debt by 2019 or risk bankruptcy 

By TEH ENG HOCK and SHAUN HO

KUALA LUMPUR: Malaysia will be bankrupt by 2019 if it does not cut subsidies and rein in borrowings, said Minister in the Prime Minister’s Department Datuk Seri Idris Jala on Thursday.

He said that Malaysia's debt would rise to 100 percent of GDP by 2019 from the current 54% if it did not cut subsidies.

“We do not want to be another Greece,” he said when officiating the Subsidy Lab Open Day here to receive feedback from the public on subsidies.

Some of the recommendations of the subsidy rationalisation lab:

- Reduction of gas subsidy, resulting in an increase in electricity tariffs. However, most households will not be affected as the move will only affect those consuming more than 200kWh.

- Toll rates to increase in mid-2010 as per concession agreement except for highways without alternative toll-free routes.

-Outpatient treatment at public hospitals to be increased from RM1 to RM3. In-patient treatment will also increase, depending on the wards (Class One, Two or Three), from between RM3 and RM80, to between RM6 to RM160.

-Text book loan scheme and tuition subsidy aid to be abolished. Students will also have to pay for public examination fees.

-Foreign students will pay full fees at public universities.

-Local undergraduates and postgraduates to pay more in student fees, ranging from RM300 to RM800.

Meanwhile, Bernama reported Idris as saying that Malaysia was likely to become an oil importer as early as next year at the current rate it was consuming petroleum,

Malaysians continue to be among the highest fuel consumers per capita in the world fuel consumption habits pattern which generally has remained relatively unchanged despite increased oil prices in 2008.

He also said that approximately 70% of the government's liquid petroleum gas (LPG) subsidy went to commercial concerns and not the intended households.

About 30% of the cooking oil subsidy was also abused, he said.

He said the government is proposing to phase out the petrol subsidy gradually in line with its move to strategically position Malaysia's economy on a stronger footing to realise the aspirations of Vision 2020, which is to achieve a developed, high-income nation status.

"Subsidies are an inaccurate representation of trade," Idris said when officiating the Subsidy Lab Open Day here to receive feedback from the public on subsidies.

"In addition, they pose a fiscal burden that emerging economies such as Malaysia should move away from. As such, we desperately need an exit strategy for subsidies, as they are unsustainable," he said.

"In order to save the country, we need to increase our GDP, Malaysians need to be aware we are giving the highest subsidies - 4.6 per cent of GDP even higher than Indonesia (2.7 per cent) & Philippines (0.2 per cent)," said Idris, who is also the Chief Executive Officer of the Performance Management and Delivery Unit (PEMANDU).

Malaysia is one of the most subsidised nations in the world. Its total subsidy of RM74 billion in 2009 is equivalent to RM12,900 per household.

This covers the areas of Social (RM42.8bil), Fuel (RM23.5bil), Infrastructure (RM4.6bil) and Food amounting to RM3.1bil.

"All savings to reduce these savings are intended to reduce our deficit and debt of RM103bil in five years," he said.

Meanwhile, studies by Bank Negara have shown that inflation will rise to four per cent (2011-2012) and three per cent post 2013.

Subsidies only result in market distortion and they drain the government of much needed funds that could be better used for more strategic and pressing development projects for the rakyat, Idris said.

"The time for subsidy rationalisation is now," he said.
"We are reviewing the possibility of introducing a floating price mechanism, mitigation measures and assistance needed to put in place."

"We do not want to end up like Greece with a total debt of EUR300 billion. Our deficit rose to record high of RM47 billion last year."

"If the government continues at the rate of 12 per cent per annum, Malaysia could go bankrupt in 2019 with total debts amounting to RM1,158 billion," he cautioned.

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RM103bil savings from subsidy reduction
Subsidy cuts to boost economy

Copyrights Infringement, Landlords to enforcer role?

Landlords ‘no’ to enforcer role

PETALING JAYA: Seven business and real estate associations are opposing the proposed amendments to the Copyright Act 1987 that holds landlords liable when their tenants use their property for intellectual property and copyright infringement activities.

They described the amendments, requiring landlords to police the usage of their premises or properties and to be held responsible for tenants’ wrongdoings, as “unfair, unreasonable, untenable and impractical”.

They also expressed fear that this would dampen the property rental market and discourage foreign and local investors from investing in the property market.

The seven are the Associated Chinese Chambers of Commerce and Industry (ACCCIM), Real Estate and Housing Developers’ Asso­ciation Malaysia (Rehda), Malaysian Asso­ciation for Shopping and Highrise Complex Management, Malaysia Retailers Association, Malaysia Retailer-Chains Associa­tion, Building Management Asso­ciation of Malaysia (BMAM) and International Real Estate Federation Malaysia Chapter.

“It is totally unreasonable from the point of enforcement of public law. The enforcement agencies must do their jobs. If they can’t solve them, they should not pass the buck to landlords. Landlords can’t be the police. They neither have firearms nor laws to protect themselves against danger,” said ACCCIM representative Datuk Teo Chiang Kok at a joint press conference here yesterday.

Former Rehda president Datuk Eddy Chen Lok Loi said the move would increase the cost of doing business as they have to train staff on enforcement and supervision.

BMAM secretary-general S. Venkateswaran said building managers’ responsibility was to ensure properties are in good condition.

“It’s not possible for them to conduct raids as they would require search warrants,” he said, adding that the move would be detrimental to investment initiatives by the government.

Protect the landlords

I REFER to the article on copyright infringement offences committed by tenants. Two weeks ago, there was also a front page article in The Star about problems caused by tenants and the price landlords are paying.
Being an estate agent, an industry player and as the immediate past president of the Malaysian Institute of Estate Agents, I join other associations and individuals who have objected to holding landlords responsible for copyright infringement offences committed by their tenants.

It is not only unfair but an injustice to hold landlords responsible and the fact that certain ministries or departments not heeding our calls or really understanding the issues, sends a cold message that bureaucracy takes precedence over facts and practices.

Estate agents represent a big majority of landlords in this country and today we feel that the landlords have got the wrong end of the rod. In all fairness, landlords spend a great amount of their savings to invest in property and in return help the property sector to grow and indirectly help drive the economy.

It would be real injustice if landlords are taken to task for the misdeeds of tenants.

The big question is are the landlords being protected?

If the tenants don’t pay electricity or water bills, the landlords have to pay, if the tenants don’t pay rental the landlords have to accept the losses, and evicting the tenant can take a long time as the eviction laws protect the tenants more, if the tenants damage the property the landlords have to pay for it, and now if one uses a pirated software or a pirated DVD the landlords will be charged.

While we enact laws, many times we understand the real issues and practices that result in poor enforcement. The authorities have surely overlooked the fact that in Malaysia, the laws to protect landlords and the laws to act against tenants are insufficient and lacking.

How can we hold landlords responsible for an action of a tenant? This goes against the very grain of fundamental rights and justice — and the guilty goes free.

The explanation that landlords must visit the premises regularly violates the agreement that they must allow the tenant “to peaceably enjoy the demised premises”. It is stated in all tenancy agreements that the tenant shall not do anything unlawful while renting the premises.

Now the authorities want landlords to search for pirated items, pirated software etc. It is a misguided fact that landlords should know their tenants.

This must be a case where the authorities have found a shortcut to solve their problems, forgetting that landlords are the very people that need to be protected.

If there is a situation of landlords colluding or collaborating with the tenant, then the landlords can be taken to task but not for merely renting their premises to an individual.

The entire real estate fraternity will bear evidence that landlords are poorly protected and we don’t need new legislation to hold them responsible for something they don’t have control or jurisdiction over. This is the case of turning landlords into enforcement officers.

K. SOMA SUNDRAM,
Kuala Lumpur.

"Don't punish landlords" as scapegoats
Unfair to make landlords liable for offences committed by tenants, say seven associations

by Alyaa Alhadjri

Datuk Teo Chiang Kok

PETALING JAYA (June 29, 2010): Developers, retailers and building owners are against the proposal to amend the Copyright Act to make landlords liable for copyright infringement offences committed by their tenants.

"Landlords should not be held liable, nor should they be forced to play the role of law enforcement officers to police copyright infringement by their tenants," said Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) president Datuk Teo Chiang Kok today.

"The amendments will unfairly include landlords of premises used for infringing activities -- instead of only focusing on the perpetrators," he said at a press conference where seven associations jointly issued a statement to oppose the proposed amendments.

The associations are ACCCIM, Real Estate and Housing Developers Association (Rehda), Malaysian Association for Shopping and Highrise Complex Management, the Malaysia Retailers Association (MRA), Malaysia Retailers-Chain Association, Building Management Association of Malaysia and International Real Estate Federation, Malaysian Chapter.

Domestic Trade, Cooperative and Consumerism Minister Datuk Seri Ismail Sabri Yaacob had last month announced the government's plan to amend Section 36(2b) and Section 41(2) of the act which pertain to ownership, distribution and sale of copyrighted material without licence.

Now, Section 36(2b) makes it is an offence for any person to import or distribute any article without licence or consent from the copyright owner. This includes pirated movies and music CDs, software and imitation branded goods.

Under the proposed amendment, the landlords will be made liable and a person found with just one infringed copy of copyright material whether for private or commercial use can be charged, instead of a minimum of three infringing copies as the law stands now.

Teo said that the relationship between landlord and tenant was governed by the common law principle that a landlord shall grant their tenant "quiet enjoyment of the premise". "With the proposed amendment, the landlord has to police the usage of the premise and effectively interferes with a fundamental aspect of the relationship with their tenants," he said.

He said that the amendments will not only affect landlords who own commercial premises, but also private property owners, who will be implicated if their tenants are caught infringing copyright laws.

He said that landlords were also exposed to financial liabilities when they took up the role of  "enforcement officers", as they might face legal action from their own tenants due to their inadequate knowledge of copyright laws.

"Law enforcement is the responsibility of the respective government agency and to impose on the landlord is an abdication of their role to private individuals," he said.

Datuk Seri Ismail Sabri Yaacob

Rehda past president Datuk Eddy Chen Lok Loi said it was unfair for the government to "pass the buck" to the landlords and find a scapegoat for its lack of enforcement capabilities. He said for the landlords to train or employ "enforcement officers" just to curb copyright infringement in their premises, would increase their cost of doing business and indirectly deter foreign direct investments.

Chen's views were echoed by Malaysian Association for Shopping and Highrise Complex Management president Richard Chan. "It is unrealistic to expect developers or owners of retail outlets to personally visit and monitor every single unit in their building, to ensure that there is no items sold that infringes copyright laws," he said.

The associations said they have had several dialogues with the ministry since the proposal was mooted in 2007, but to date, the government had not heeded their views. "Every time revisions were made to the proposal, the content was still the same, with only the wordings changed," lamented Teo.

He said the government's stand was that "landlords should know their tenants" before entering into any agreement and should, therefore, be held responsible for any illegal activities conducted in their premises. -- theSun

Your Ideas To Change The World

Readers offer their solutions to the globe's problems.

Two weeks ago, we published a special report on 25 Ideas To Change The World. Forbes India asked luminaries like microfinance pioneer Muhammad Yunus, Wikipedia founder Jimmy Wales, philosopher Alain de Botton, designer Milton Glaser and 21 others to pen essays on the topic. You can read all 25 pieces here. But Forbes also asked readers via Facebook (at both the Forbes and Forbes Asia pages) and Twitter to share with us their world-changing ideas. We promised to publish a handful of the suggestions we received.
 
One theme provoked the most responses: musings on global warming, climate change and pollution put forth by biologist George Schaller, activist Bianca Jagger and "skeptical environmentalist" Bjorn Lomborg.

Readers were most passionate--and prolific--about ways we can reduce our impact on the environment, particularly in light of the Gulf Oil spill. Here are a few of the most thoughtful comments.
 
I agree that attempting to arbitrarily raise the price of carbon fuels to discourage consumption hasn't worked. I don't think it's rational or fair to cut the existing lifelines of cheap carbon-based fuels today to developing countries and inhibit them from creating a more prosperous future. As Tom Friedman suggests, we need a "Million Manhattan Projects" or massive R&D push to discover and develop alternative sources including, wind, solar, nuclear, bio and thermal. Government can play a role in such an ambitious project through leadership, vision and incentives but I'd like to see it led by the private sector. On the consumption side of the equation, I'm encouraged to see industry leaders like Cisco ( CSCO - news - people ), IBM ( IBM - news - people ) and HP taking steps towards a 'smarter' and technologically greener planet through enabling technologies. --BobOlwig, who also has a blog.
Lomborg is correct that previous emissions cutting measures have not been successful. I believe this is due in part to the fact that ordinary citizens in most nations are alienated from these measures and have not been inspired (or forced) to take personal responsibility for the emissions they contribute. I believe the solution to combating climate changes lies in part with our ability to motivate individual consumers to reduce their energy consumption. Creating more individual accountability for energy consumption can be done either by forcing (by increasing prices, which Lomberg claims is not effective) or by motivating. I believe we need to develop a solution which creates motivating factors for consumers to conserve. The way I propose to do this is to use the power of IT to create online systems where consumers can track their consumption of oil & energy (already happening slowly with smart meters) but also create transparency enabling consumers to compare their energy usage to others in their area, in other cities and even in other countries. Such a system would also provide recommendations on ways to cut, and provide insight into the monetary savings and emissions reductions resulting from taking these measures. I believe that this increased level of transparency would inspire people to reduce their consumption, helping to curtail steadily rising emissions until we can fully transition to a clean energy economy. --Jjreif

Our lack of responsibility in dealing with the environment upon which we live--our hubris, in other words--seems likely to bring us down, and sooner rather than later. --mhenriday

We need to appoint global council for climate change, which will look into all matters rationally and come up with a solution [that] will be binding for all countries. And Western countries have to pay upfront charges for whatever pollution they have done in the past. They will not be allowed to get away…I am no climate expert, it is my humble idea. --greenworld2012
 
Another hot-button topic came from cognitive scientist David Livingstone Smith's exploration of the psychology of violence and hate. In his article, Livingstone Smith describes his quest to explore human tendencies both to abhor and commit violent acts by studying the inner workings of the mind. He concludes that one of the ways this dichotomy is able to exist is because, as a form of justification, we dehumanize those people--for example, deem them the same as animals or worse--against whom we are violent. It is only once we address the psychological dimension to violence, Livingstone Smith says, that we can hope to stop it.

Many readers agreed. "The stranger has always been the 'other,'" writes Kevin_Walsh. "It is only a small step to a dangerous 'other,' requiring a protective response. Many politicians use fear for control. Fear and mutual protection are the original basis for the formation of community." Other commenters, however, were more fatalistic. Adds mcgator: "Dehumanization, in my opinion, is also a reaction to others dehumanizing us…Once a group of people dehumanize another, then the reaction almost has to be to return the favor. I feel terrible that this is the case but there is also the natural desire of survival."

As the special report was put together by the staff of Forbes licensee Forbes India, many of the visionaries focused their efforts at problems prevalent in that country. For example, Jockin Arputham of the National Slum Dwellers Federation emphasized poverty alleviation can be achieved by not by government degree but by empowering the poorest people to help themselves.

Agreed commenter Juwaeriah: "In order to see a profound improvement, our awareness programs should be a bit more stimulating. Awareness that has an effect in such a way mentally draws people to take responsibility. For a beneficial outcome the people factor within the slums as well as urban dwellers need to collaboratively take action."

Harvard Business School professor Tarun Khanna wrote about how to tap the talent of the lower quadrants of populations in emerging markets. "The Government of India [is] in [its] first national attempt to issue a national registration identity to all Indians above the age of 16; [it] will also open an account in their names in a bank and deposit a certain amount of seed money for them," writes vksharan. "It is necessary to bring the poor and illiterate in the mainstream economy. One has to give the poor something that they will guard with their life and use to it to climb higher and prosper in their lives."

In response to philosopher Alain de Botton's piece about creating a secular religion,

GeorgePJelliss points out that Botton's ideas are just the latest in a long line of other thinkers who posited alternatives to traditional religious practice. "A religion of mankind has been proposed many times," he writes. "After David came Auguste Comte's Positivism, and in England Robert Owen's Rational Religion, and George Holyoake's Secularism."

Meanwhile, creativetechnologist of Fareham in the U.K. writes that he is eyeing a similar project to Botton: "The idea I am working on is to create a group (not a religion) that takes the good parts of community and morality from religion (and there are a lot of bad parts!) along with real world values and promote regular meetings and discussion." Another commenter, loafingisgood, echoed Socrates in reflecting on the very essence of what religion means to society. "The proper question to ask about a religion is not 'Is it true?' but 'is it useful?'" he points out. "The question 'Is it true?' is certain to be answered at the end of life, so why argue? The question 'Is it useful?' is certainly worth addressing.

In response to the creator of India's National Stock Exchange, Ravi Narain, who wrote here about how technology can revolutionize the markets, economies and finance, Lousulliva thought up a tax-based incentive system to encourage wealthy investors to sink money into U.S. startups. First, the person could write off an investment in certain technologies and industries like renewable energy, and second, the person can deduct from his or her taxes a portion of the profits that result from that investment.
 
"The net effect on this will be a larger tax base as employment falls, [and] increased development capital in the private sector which has always performed better than its government counterparts," Louissulliva writes. "Rules could include but [are] not limited to minimum wages firms who see this kind of capital may pay, [or] a custom 'company" tax' or surtax on its products once profitability is returned."

"Reward those who put their wealth to work through investment," TomBeebe concurs, "and penalize consumption above a certain level. Our tax code should be re-written to this end."

Laxman Thapa agrees that the world's richest people should play a role in its progress, writing on Facebook that "all countries should govern the property of [the] richest persons very carefully, with a need to evaluate and control the tariff they are charging for products to commoners."

Finance was on the forefront of commenter tmd1771's mind, who proposed a system to combat part of the real estate crisis in the U.S.: "What are we spending (have we spent already?) as a country on the various attempts to have trial mortgages refinanced, to administer short sales and foreclosures, to maintain bank-owned real estate? Would it not be expedient to create a fund--equally funded by both federal and bank interests from the money saved by not administering--that compensates for, say, a 20% principle reduction for all home mortgages?"

Some readers were more creative. Jessica Lynn, who wrote via Facebook message, was inspired to think of a more down to earth, world-changing idea. "I'd sure love to make some changes starting right in my own community!" she writes. "I dream of starting a girls' youth group, teaching young ladies how to be confident, independent, self-sufficient and that they can do anything they set their minds to."

Melvin Wizamgee wrote on Forbes' Facebook page that meditation would help change the consciousness and awareness of our leaders. Carmelita Omli says the world should eliminate visa requirements, while Carl Wayne Hardeman believes a cheap way to desalinate sea water could help solve water shortage problems. Ajduggal suggests adopting English as a universal language.

Forbes wishes everyone the best of luck in turning all of these ideas into action!

Hana R. Alberts,

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