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M. Bakri Musa

Seeing Malaysia My Way

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Location: Morgan Hill, California, United States

Malaysian-born Bakri Musa writes frequently on issues affecting his native land. His essays have appeared in the Far Eastern Economic Review, Asiaweek, International Herald Tribune, Education Quarterly, SIngapore's Straits Times, and The New Straits Times. His commentary has aired on National Public Radio's Marketplace. His regular column Seeing It My Way appears in Malaysiakini. Bakri is also a regular contributor to th eSun (Malaysia). He has previously written "The Malay Dilemma Revisited: Race Dynamics in Modern Malaysia" as well as "Malaysia in the Era of Globalization," "An Education System Worthy of Malaysia," "Seeing Malaysia My Way," and "With Love, From Malaysia." Bakri's day job (and frequently night time too!) is as a surgeon in private practice in Silicon Valley, California. He and his wife Karen live on a ranch in Morgan Hill. This website is updated twice a week on Sundays and Wednesdays at 5 PM California time.

Wednesday, August 27, 2014

Time To Sell Or Liquidate Malaysia Airlines


Time To Sell or Liquidate MAS

M. Bakri Musa

www.bakrimusa.com

  

When I think of the many needed functions of government, owning or running an airline is not one of them. Instead, taking care of the health, welfare and security of its citizens should rank way up there.

             Once you have done an excellent job in those essential areas and still have extra time, talent or resources, then you could consider running an airline. A humble and conscientious leader would never be satisfied when it comes to serving the public, for no matter how excellent a job he may be doing there will always be room for improvement. The Finns have the finest schools yet their leaders are consumed with improving the system. That is what progress means.

             Malaysia once again contemplates pouring billions to rescue Malaysia Airlines (MAS). Apart from consuming a never-ending amount of scarce and expensive government resources, the company receives an inordinate degree of attention at the highest level of the Najib Administration. I would have preferred that those leaders be concerned with our deteriorating schools and universities, or the awful delivery of our public services. On the day of the news of the proposed MAS bailout, there was another headline on a fire at the waste dump in Klang Valley.

             Not being a vendor, customer, employee, or shareholder of MAS (that’s 95 percent of Malaysians and 99 percent of Malays), I could not care less if the formerly blue-chip company is sold or liquidated. I am however saddened that the University of Malaya is now third-rate, and falling fast. I am even more dismayed that there is no comparable bailout plan to rescue it or the education system generally.

            The future of Malaysia or Malaysians (especially Malays) does not depend on Malaysia Airlines. Nor does the fate of the company reflect adversely on the caliber or future of Malays, Malaysians, or Malaysia. Our schools and universities on the other hand do determine the future of our people and society.


            Malaysia does not need MAS to project the nation’s image abroad. Besides, the image MAS now projects is of the worse kind. Malaysia also does not need MAS to bring in tourists. The other airlines including Air Asia do a fine job at that, and at no cost to the government. Malaysians do not need MAS for their international travels. You can choose from a dozen airlines to fly from Kuala Lumpur to San Francisco. In fact MAS no longer flies to the west coast of America.


            There can only be one prudent decision on what to do with MAS now after all the repeated expensive and unsuccessful bailouts and reorganization exercises. Sell it or declare bankruptcy, with a view of total liquidation.

 

MAS Now But A Shell Company

            After its “successful” WAU (Widespread Asset Unbundling) manouver a decade ago, MAS today is but a shell company, burdened with tons of liabilities. Even its brand is now tarnished. That leaves only its traffic rights as assets. I reckon there would be few takers for its slots in Buenos Aires and Mexico City.

            We should not be squeamish about or be ashamed of bankruptcy; it is an integral part of business. No enterprise is guaranteed to be a success.

            Swiss Air, once dubbed the “Flying Bank” because of is solid finances, went bankrupt in 2002. Nobody would conclude negatively from that the business acumen or executive talent of Swiss managers. The more relevant lesson for Malaysia from the Swiss bankruptcy is this. The company’s entire top management was prosecuted for alleged criminal misconduct. They were found not guilty; nonetheless they were made to go through the wringer. A thought should MAS file for bankruptcy.

             Japan Airlines, another government-linked company, also filed for bankruptcy. Today it is flying high after its reorganization. The venerable Pan Am, the very icon of a once glamorous industry, too was done in; likewise all the major legacy US airlines (Delta, United, American). Neither Japanese nor American pride was dented. Life (and business) goes on.

            Malaysians need an airline, a safe and reliable one without regard as to who owns or runs it. If MAS is liquidated, other airlines would fill in the void. That is the law of the marketplace. Government intervention would only distort this reality, and then only for so long. Despite Air India, also a GLC, Emirate Airlines is the de facto official airline of India.

            Instead of spending the one and a half billion ringgit buying the rest of MAS shares, and many billions more to “rehabilitate” the airline, Khazanah should sell the company and use the resources to enter a new line of business, such as private education and healthcare. There is certainly a great need for both not only in Malaysia but also the region.

            If I were running Khazanah, I would direct MAS management to settle quickly with its insurers over the loss of its two planes, and distribute the proceeds as dividends and then promptly declare the airline bankrupt. That way it would have recouped part of its bad investment.

             American Airlines posted its biggest quarterly “profits” from the insurance settlement of its DC 10 that crashed on take-off from O’Hare in 1979. However with MAS today, thanks to that “brilliant” WAU scheme, both planes were probably owned by another company with MAS leasing both back. So the insurance payments would go to that company instead of MAS!

            In a statement referring to the proposed MAS reorganization Najib said, “Only through a complete overhaul of the company can we deliver a genuinely strong and sustainable national carrier.” He went on to say that renewal involves painful steps and sacrifices from all parties.


            What Malaysia needs desperately is for Najib to overhaul his administration. Getting rid of MAS would be a great first step in that direction. Unfortunately Najib is incapable of undertaking that. He just does not have what it takes to lead the nation.


            Najib’s leadership, like MAS shares, is penny stock quality. MAS is an apt metaphor for Najib, except that Najib was never blue chip to begin with.

 

Tuesday, August 05, 2014

Pamper Those At Home, The Ones Abroad Will Soon Return



M. Bakri Musa
(www.bakrimusa.blogspot.com)


A review of Ruslan Khalid’s Quest for Architectural Excellence. A Malaysian Experience. Marshall Cavendish, Singapore, 2013. 308 pp. US$35.00; RM44.90.

During World War II, British aviation experts were consumed with analyzing and fixing returning warplanes that had been fired upon, until it was pointed out that those damages were not critical as the planes could still fly. It was counterintuitive but logical; if you want to study critical damages, you examine downed planes.

            Last year, the Talent Corporation spent RM65 million on Malaysian professionals abroad to entice them to return. It may be counterintuitive but the money would be better spent on those at home so they would not even consider leaving. If they are happy, the good word would spread, enticing those abroad to return.

            Our wise elders counseled us of the trap of kera di hutan di susukan, anak di rumah mati kelaparan. (breastfeeding the monkey in the jungle while letting your child at home starve to death.)

            An emigrating family, like Tolstoy’s unhappy family in Anna Karenina, is unique in its own way. Thus instead of studying “big data” on the brain drain, it would be more fruitful to analyze individual cases, not those who emigrate but the ones who return or stay.

            One such professional was the late architect Ruslan Khalid. He died in November 2012, only days after final-proofing his autobiography, Quest For Architectural Excellence. The Malaysian Experience.


Product of London’s AA School of Architecture

Ruslan graduated from London’s prestigious Architectural Association (AA) School of Architecture, and had a successful practice in London before returning home late in 1979. Among his clients while there was the Sultan of Pahang.

            His final dozen years or so in Malaysia took only about a third of his 308-page book. Those running Talent Corporation would learn more from reading those pages than they would from gallivanting around the world enticing Malaysians to return. It would also be a lot cheaper, and the book is an enjoyable read, quite apart from being informative. Ruslan wrote well, with elegance and passion. He also immersed himself into the upper crust of British artistic society, and we get a glimpse of that as a bonus.

            Ruslan dedicated his book to “all late starters.” Presumably he considered himself one. On the contrary as is evident from the book, he was intelligent, insightful, and very resourceful. Those qualities however, were not recognized early or at all by his native country, nor are they readily assessed on a paper-and-pencil test.

            He obtained only (his description) Grade II in his School Certificate Examination in 1952 and a scholarship to a third-rate British architectural school. He recognized that stark reality on his very first day on campus. For an institution to train designers of buildings and structures, the edifice was anything but inspiring. It was like entering a hospital or medical school where the foyer was dirty and ambience unhygienic; you have to be desperate to have any trust or confidence.

            It reflected the foresight of his colonial interviewers that they awarded him a scholarship despite his Grade II; they saw his potential. After all he entered English school only two years earlier having previously attended only Malay and religious schools. It also reflected the wisdom of his teachers then that he had to take English classes at his Islamic school. Where are those educators today?

            On his voyage to England he bunked with three top-scorer students. By the time they reached Bombay, he had already befriended a certain lady from the First Class deck while the other three were content jabbering among themselves. As luck would have it, she was the wife of a famous architect besides being one herself.

            With uninspiring lecturers in a third-rate institution, Ruslan flunked his second year. Undeterred and confident of his talent, he pursued his craft through the old apprentice system. His portfolio, together with his contacts with many well-known architects, later paved his way into AA School as an advanced student on a British scholarship.

            All these are interesting preamble. My interest however, is on enticing successful Malaysians to return, or what make them leave. So I will focus on this native son’s travails at home upon his return late in life.


Disappointments At Home

Despite having been a practicing architect for over a decade in London, his application for registration in Malaysia was summarily denied. He did not have the prerequisite two years of local public service. Not wishing to be desk-bound in some ministry, he opted for Universiti Teknoloji Malaysia. After all he had been a senior lecturer in London.

            The ending was predictable, and came soon. He left after the minimum two years to pursue private practice, which led him to be editor of his professional association’s journal. He soon discovered that his profession at home was handmaiden for developers and the journal he edited was more advertising channel for the industry rather than advancing the art and science of local architecture.

            I can attest to that. In 1977 my wife and I engaged a famous architect in Kuala Lumpur to design our dream house. We chose him because his name was similar to mine, and with his foreign wife I thought he would appreciate our aspiration. We wanted a wooden house with local fruit trees for landscaping. Imagine our surprise when he answered our every query with, “Yes, we can do that!” without offering alternatives or critiquing our ideas.

            Then at a public housing exhibition I encountered the firm of Goh Hock Guan; it had won first prize in that competition with its wooden house design. We chose it, and to our surprise were assigned to a young Malay associate. Surely he had been sent abroad on a government scholarship and thus should be pushing papers in one of those ministries, I thought.

            Esa Mohamed too answered all our questions but he also warned us that while he was enthusiastic about our project, our house would have little resale value as it was not mainstream design. We nonetheless proceeded and were enthralled with his creation! Unfortunately by this time I had already decided to leave. We paid his fees and kept the blueprint. Esa went on to have a very successful career.


Thwarted Academic The Second Time

Back to Ruslan, a few years later UPM opened its architectural faculty. Eager to train future architects in his mold, he became its founding dean. Again the quick and predictable ending! Despite being on the Sultan of Pahang’s polo team and Prime Minister Mahathir’s riding companion, quite apart from having a half-brother in the cabinet, Ruslan was, as he wrote, “relieved of his duties.” Mahathir offered his services to have him reinstated, but bitten twice, he politely declined.

            The one incident during his deanship was symptomatic of the country’s malaise and obsession with praises from foreigners. He had fought hard to improve the academic facilities when, unbeknown to Ruslan, the Vice-Chancellor hired a British consultant. As it turned out Ruslan knew him. Consequently the report was full of praise and confidence of the faculty’s future under Ruslan’s leadership. The VC used that as an excuse to deny Ruslan’s request, deeming that the faculty was fine as it was!

            Again I can relate to that. As a surgeon in Johor Baru 1978 I fought hard to upgrade the hospital to be worthy of a teaching institution. Then came a British delegation sponsored by the ministry. At the exit conference the British spokesman could hardly restrain himself in praising our facility, egged on by the beaming smiles of local officials.

            When he finished I spoke up. I told him that much as I appreciated his generous remarks, he had effectively undercut my efforts. The ministry would now not approve my request seeing that our facility was already doing well. Then to drive home my point, I told everyone that I had never been to a British teaching hospital, but if they were impressed with our facility, then I did not think highly of their standards.

            At the end of the meeting one of the surveyors sought me to apologize. I told him it mattered not as the damage had been done and that he surely would be invited again for the next survey, unless of course he was willing to submit an amended report.

            These ugly realities would never be uncovered in glitzy official reports or expensive consultants’ surveys; hence the need for personal accounts as with Ruslan Khalid’s In Quest for Architectural Excellence.

            Ruslan Khalid is now gone, may Allah bless his soul and put him among the righteous. Architect Ruslan bequeathed his extensive portfolios; native son Ruslan, this thoughtful and insightful autobiography. Malaysia would be poorer if it does not heed his wisdom.