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M. Bakri Musa

Seeing Malaysia My Way

My Photo
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.

Sunday, February 26, 2012

Raking In The Bounty of FELDA's IPO

Raking in the Bounty of FELDA’s IPO
M. Bakri Musa

In the run-up to the Initial Public Offering (IPO) of FELDA Global Ventures Holdings (FGH), there is little, in fact no discussion on how the exercise would benefit FELDA settlers. Surely that should be the foremost consideration. The only criterion upon which to judge the wisdom or success of any FELDA initiative, including this proposed IPO, would be to assess its impact on the settlers.

Instead the focus has been on bragging rights, as with trumpeting FGH to be the biggest IPO for the year, among the top 20 on the KLSE, and the world’s biggest plantation company. Such milestones are meaningful only if achieved as a consequence of the usual business activities and not through fancy paper-shuffling exercises. Apple recently surpassed Microsoft in market capitalization, but that was the consequence of Apple’s much superior products like iPads, iPods, and iPhones. Contrast that with earlier achievements of such now-defunct financial giants as AIG and Lehman Brothers that were based on fancy “financial engineering” instead of solid products and services.

Instead of delineating the potential benefits that would accrue on the settlers from this IPO, its proponents are content with dismissing the critics and imputing evil motives on their part. There are legitimate concerns that this exercise would prove to be nothing more than yet another fancy scheme for the politically powerful to cash out on a lucrative but under-priced government asset. We already have many ready examples of such greed.

Consider the National Feedlot Corporation (NFC) “cowgate” mess involving considerably much smaller sum of money. Despite the presence of high government officials on NFC’s board to safeguard the government’s interest, NFC’s senior managers still managed to subvert those publicly-subsidized loans to purchase luxury condominiums totally unrelated to the company’s activities. This oversight failure reflects both the incompetence of the government’s representatives in discharging their fiduciary responsibility, as well as the lack of integrity on the part of NFC’s management.

Such despicable omissions and spectacular failures are not unique only to NFC; they are endemic in government-linked corporations. Thus Malaysians have good reasons to believe that FGH would be no exception once the money starts rolling in.

It also does not escape the public’s attention that the man helming FGH, and thus whose hands would be at the till once the billions start pouring in from the IPO, is one Isa Samad, a former UMNO Vice-President. Not any VP however, but one who was found guilty by his party of “money politics” and subsequently suspended. UMNO is no paragon of virtue; to be found guilty by it would be akin to being called a slut by hookers. You have to be disgustingly gross.

It would be easy to blame Isa Samad. The bigger question, and one that has yet to be answered, is why did Prime Minister Najib choose such a shady character to helm this major corporation? That is as much a reflection of Najib as it is on Isa.

Peruse FGH current corporate structure. It has nearly over a hundred subsidiaries, associated companies, and joint ventures, many with overlapping functions, markets and products. Those units are created less in response to commercial needs, more to create opportunities for senior civil servants to be appointed to the many governing boards, and thus garnering extra income in the form of directors’ fees, in addition to their regular civil service pay. Ever wonder why these GLCs lack effective oversight and our government departments are shoddily run? You would think that their regular government jobs, diligently executed, would keep them fully occupied.

A more sinister reason for these GLC directorships is that they are an effective trick to trap the loyalty of civil servants. Be too critical of the idiotic ideas of your political superiors and you risk being left out on those lucrative board appointments. With Isa Samad, it is also a case of Najib buying Isa’s silence, for reasons best known only to the pair.

Corrupting A Noble Initiative

FELDA was the crown jewel of Tun Razak’s imaginative rural development scheme. It was to provide land to otherwise landless villagers, the equivalent of land grants homesteading to early American settlers. The other reason was to encourage Malays to undertake an internal migration of sorts by uprooting them from their tradition-bound villages to begin a new life unencumbered by prevailing non-productive cultural practices.

With the expertise of and financing from the government, those villagers would develop hitherto virgin jungles into productive rubber and palm oil plantations, with those settlers eventually getting title to their holdings. At about 14 acres each, those units were definitely economically viable. To make sure that those lands would survive the next and subsequent generations and not be endlessly subdivided, the settlers had to agree to dispense with their usual Islamic inheritance practices. Meaning, the property would be inherited by only one of the children.

The surprise was the absence of howling protests from the ulama to this clear departure from Islamic inheritance practices as everybody saw the wisdom of the move; to maintain the economic viability of these holdings.

If this IPO were to enhance the condition of the settlers, then it should be supported. FELDA is meant to serve the settlers, not the other way around. Isa Samad had it backwards when he dismissed the concerns of the settlers as voiced through their cooperatives.

In response to the settlers’ concerns, Isa suggested a portion of the proceeds be placed in a “Special Purpose Vehicle” specifically to meet their needs. Unfortunately he did not provide the specifics. Consequently this SPV risks degenerating into yet another honey jar to be passed around among the politically powerful bears.

In my forthcoming book, Liberating the Malay Mind, I put forth ideas on how to maximize the use of these GLCs in improving the lot of Bumiputras. The focus should be on investing in people – human capital – not companies. Companies are subject to business cycles; they can also be ruined by incompetent and corrupt managers. All you would be left with then are worthless stock certificates. Where is Bank Bumiputra today? Malaysia Airlines is in no great shape either, despite the billions expended through SPVs and other accounting gimmicks.

Invest in our people instead; the skills and knowledge they acquire would stay with them to benefit society through good and bad times. Thus I suggest selling these GLCs and putting the proceeds into an escrow account for the sole purpose of investing in and developing Bumiputra human capital.

Bringing the issue specifically to FGH, I would commit a third of the IPO proceeds to a special fund to be used to develop the human capital of the settlers and their children. That money would be used to air-condition their schools, build adequate laboratories and libraries, and to bring qualified teachers especially in English, science and mathematics. If you want the children of those settlers to be other than penorakas (homesteaders), the best route would be to provide them with superior education. That means their schools and teachers should be among the best; today they are among the worst.

I would use the funds to enrich the curriculum as with providing music classes. I would go further and provide free musical instruments and after-class music lessons, modeled after Venezuela’s highly successful El Sistema initiative. New York is modeling a similar Harmony program with its low-income students, and this week those students had the thrill of their lifetime when their orchestra was conducted by Placido Domingo. Gustavo Dudamel, the young conductor of the Los Angeles Philharmonic Orchestra, is a product of El Sistema, a tribute to Venezuela’s investment in human capital.

Similarly I would use the IPO funds to mechanize the operations on these plantations. Today palm nuts are still harvested in the same labor-intensive and back-breaking ways as they were 50 years ago; there is little innovation or mechanization. I fail to see why FELDA engineers could not design harvesting machines and trucks with hydraulic lifts like those used by utility repair workers to fix broken lines. Only through mechanization could the workers’ safety and health could be assured, and their productivity enhanced.

If through this IPO the lives of those FELDA settlers and their children were to be made better, then the initiative would find many ready supporters. What many fear is that this IPO would prove to be nothing more than a windfall for the likes of Isa Samad so they could acquire their luxury condos, fancy cars, and trophy wives.

Sunday, February 19, 2012

Grounding These High-Flying Kampong Malays

Grounding Those High-Flying Kampong Boys

M. Bakri Musa

As I reflect on the many sordid scandals that have blighted Malaysia over the years, I am struck by one sobering observation. That is, the principal players are Malays like me, and of my vintage.

There are exceptions, of course. The mega-ringgit Port Klang Free Zone Development is one. Then there was the Malaysian Chinese Association’s Deposit Taking Cooperative debacle of the mid 1980s. So as not to slight the Indian community, there was the equally ugly affair of MAIKA, the investment arm of the Malaysian Indian Congress.

In East Malaysia there was the Chief Minister of Sabah, one Osu Bin Haji Sukam, who skipped on his multimillion-pound gambling debt incurred in a London casino. His Haji father would roll over in his grave on that one. On a far grander scale with respect to sheer avarice and outrageous obscenity would be the still-to-be-fully-accounted glutton of another chief minister, this one of Sarawak. Purists may argue that these two characters are not Melayu tulen (“pure” Malays), so I will not focus on them.

That would still leave me with plenty of loathsome characters with whom, embarrassingly, I share far too many ready commonalities. Meaning, among others, we were poor, from the kampong, and the first in our family to go to college.

Stated differently, in an unguarded moment, scratch a bit and our “kampongness” would ooze out of our pores. I could readily swap old familiar stories with these high-flying former kampong Malays, of having to light pelita (kerosene wick lamps) in order to study at night, of hauling water in pails hung at the ends of a bamboo pole painfully strung across the shoulder, and of back-breaking plowing of rice fields with our primitive cangkul (hoe).

Those are not just distant hazy memories. Every time I visit my kampong, I am painfully reminded of this harsh reality.

The Laggak (Swagger) of These Malays

I meet many of these high-flying Malays when they visit America on their taxpayer-paid junkets; you could not have guessed their humble origins from their laggak (swagger).

One official stayed at the presidential suite of a five-star hotel, the sort usually reserved for President Obama. She then had the audacity to complain that her car in which she was driven in was not the latest luxury model! As for her flight, it was first class all the way.

Recently Prime Minister Najib stayed at a $20,000-a-night penthouse suite of the Darling Hotel in Sydney while his wife splurged on a $100,000 shopping spree in a single day. Even if those figures were in our devalued ringgit, that would still be obscenely extravagant. Najib’s wife denied that Australian report, but having seen her behaviors while visiting America, I believe the Australian account. Najib’s predecessor was even more indulgent, what with his fondness for custom-made, ultra-luxury, Airbus and yacht!

Najib and his wife, self-styled Malaysia’s “first couple,” compare themselves to our sultans, who in turn model themselves after the British and Saudi monarchs. More the latter as the House of Windsor is now much more restrained; not so the House of Saud, still amply funded by their overflowing oil wells. Ours are fast drying up.

With such extravagances at the top, no wonder lesser kutus (characters) try to outdo each other. Consider one Khir Toyo, a former dentist. Thanks to a liberalized legal definition, this son of a Javanese immigrant is now Melayu tulen. He fancied himself a shrewd businessman who could drive a hard bargain and thus secured for himself a mega-mansion at half-price! The only problem was that his “victim” was someone who did considerable business with Selangor while Toyo was its Chief Minister.

It was of course no shrewd bargaining, merely of, as Prime Minister Najib would inelegantly but nonetheless accurately put it, “Gua tolong lu, lu tolong gua!” (You scratch my back, I’ll scratch yours!). A more appropriate term would be extorting, but then this Khir Toyo was a product of our all-Malay education system and had only recently learned English; hence his inability to discern the not-so-subtle difference between negotiating and extorting.

Too bad this Toyo did not use his negotiating prowess to secure for Selangor similar lean contracts! Thank God that he is now a former chief minister! He would still be Chief Minister if Barisan Nasional had won the last election. This point is worth pondering come the next general elections.

The latest but by no means most egregious example of these sordid scandals involves the National Feedlot Corporation, tasked with spearheading a meat-production industry to help poor rural dwellers. At least that is the rationale, hence the generous government low-interest loans.

The principal there is one Dr. Salleh Ismail; he is now more known as the husband of a federal minister. Many Malays who reach the top today are not known for their brilliance; they may have degrees but often from third-rate universities or even blatant degree mills. Imbecility is the norm at the highest levels. Salleh however, is the exception. He is one of the early Malay PhDs in science, and not just any doctorate but one from Cornell. He is precisely the sort of Malay the government should be rewarding. So I have no problem with his getting the cattle project instead of some incompetent UMNO operatives or science-illiterate retired civil servants. Nor do I quibble with his putting his children on his company’s payroll; after all it is his company.

As with any project, the best way to get the best candidate or price would be through competitive bidding. Today, there are many more qualified Malays with proven entrepreneurial flair especially in this field of rearing animals. Many also have proven research expertise directly in the area. The likes of Salleh Ismail are no longer a rarity.

My greatest disappointment is with Dr. Salleh using taxpayer-subsidized loans to buy luxury condominiums. The irony of his getting special Bumiputra discounts! Dr. Salleh is of course free to do what he wants with his personal assets. Equally if not more reprehensible would be the responsible ministers and treasury officials; they should have disbursed the loan conditionally and in phases, upon proof of satisfactory performance.

This “cow gate” scandal pales in comparison to an earlier and much more expensive one involving Tajuddin Ramli and Malaysia Airlines. Like Salleh, Tajuddin is the son of a villager from Kedah, a predominantly Malay and very poor state. Like Salleh, Tajuddin too still has many poor relatives back in the kampongs. You would think that the memories of their still miserable relatives in the kampong would put a damper on the laggak of these high-flying Malays.

Shaming By Showing Them Up

Dr. Salleh is from Kelantan. I was on vacation there once and witnessed the appalling poverty that tugged at my sensibilities. I wonder whether Salleh feels that way too when he visits Bacok; those villagers could well be his cousins, once or twice removed. He could have invested in building homes for them and his would-be franchise farmers instead of splurging on luxury condos. He would then be hailed a hero instead of yet another spouse or relative of an UMNO minister hogging the public trough.

To develop our society we must give young Malays, especially those from the kampongs, a first-class education that would prepare them for the best universities, the kind that Dr. Salleh was privileged to partake. That is our only hope. Yes, some will forget their humble origin and be consumed with their newly-acquired luxury tastes, courtesy of Ketuanan Melayu of course. However, there will more than a few with enough conscience; their modest behaviors would then shame these high-flying pseudo-sophisticated kampong Malays with their taxpayer-supported laggak.

There is a viral video on the Internet showing Gary Locke, the current American Ambassador to China, carrying his own luggage and ordering his coffee at an airport cafe. Locke is an American Chinese, but his very American style – singularly lacking in pretensions – is causing much discomfort among Chinese officialdom.

We have many brilliant and unassuming former children of the kampongs. They are doing their best under very trying circumstances for our nation. I am humbled and more than just a bit embarrassed in their presence. Unlike Dr. Salleh or Khairy, these Malays are not married or related to top UMNO operatives. Many would consider that plain unlucky, but those smart dedicated Malays feel otherwise. They consider themselves lucky to be spared the corrupting influences around them.

In my forthcoming book Liberating the Malay Mind, I profiled a few of these admirable individuals. One in particular, Professor Badri Muhammad, deserves special mention. Like Dr. Salleh, Badri was also from a village in Kelantan and obtained his PhD (Dalhousie, in chemistry) a few years earlier than Dr. Salleh. Badri’s legacies however, are not luxury condominiums or multimillion-ringgit companies, but his children, biological as well as academic, the many undergraduates and doctoral candidates he inspired and guided. Yes, his biological children too have done well, sporting degrees from top universities, including one, Adam, a Carnegie Mellon PhD in engineering.

Here is another significant difference; despite Badri’s modest academic income, he was able to give his children a superior education sans JPA, MARA, or other Ketuanan Melayu crutches. Contrast that to one Rafidah Aziz, also of my vintage. Like other UMNO officials, she too had her share of scandals. On a visit to America many years ago she bragged about her daughter getting a MARA “scholarship.” Tiada maruah! (No sense of shame.)

With characters like Dr. Salleh, Tajuddin Ramli, Rafidah Aziz and Khir Toyo, it is tempting to indict Malays of my generation. However, I am certain that Malays like Badri are not the exceptions. There are for example Syed Mokthar Albukhary and Zaid Ibrahim; both were named as Asia’s philanthropic heroes by Forbes magazine a few years ago. Syed Mokthar gave generously to causes like education while Zaid has dedicated a home for the disabled in Kota Baru.

You do not realize how slothful you look until you are in the company of the well-groomed. Thus we need more Malays like Syed Mokthar, Zaid Ibrahim and my recently-departed dear friend Dr. Badri Muhammad to shame and bring to the ground these high-flying former kampong boys and girls, as Ambassador Locke is now doing to Chinese officials.

Sunday, February 12, 2012

Malaysia in the Era of Globalization #100

Chapter 12: A Prescription For Malaysia

An Open Letter to the Prime Minister

May 13, 2002

The Next Young Mahathir

Today you are busy attending to the nation’s business. Rightly so, but I do hope that you ponder these questions and answer them in your memoirs. Subsequent generations need to learn the lesson. In the remaining years you must concentrate not on party or policy, but on personnel. You once quipped that you would like to be succeeded by your clone. Alas, there is no young Mahathir out there. Sadly, this more than anything else is the most glaring failure of your leadership.

Finding the next cadre of leaders will not be easy. While previous generations were inspired by the struggle for freedom, no such inspirations exist now. Today’s young Mahathirs, if they have not already succumbed to the lures of the First World, are busy pitting their talent in the highly lucrative private sector. You must make a personal and concerted effort at talent scouting. Fortunately, again thanks to the successes of your very policies, there are many capable Malaysians. Finding them would not be difficult, but enticing them into public service would be the challenge. There will be a few who, having reached the peak of their career and having put aside a comfortable nest egg, would consider public service a noble calling. Grab them. Under your masterful tutelage, these fast learners would grasp the political skills soon enough. You will also find them to be a different breed from the ones currently serving you.

Should you restrict yourself to your party, there will be slim pickings. Your track record at talent scouting thus far, to put it charitably, is less than spectacular. You had better luck recently with your choice of a new chief justice in the person of Dzaiddin Abdullah. That one wise pick did more to enhance the judiciary than all your speeches. This should remind you of the importance of personnel.

The legacy of a parent is their children; a leader, his successor. There is ample time yet for you to enhance your legacy and with it, to secure the nation’s future.

You have repeatedly grumbled on the lack of Malays in business, and just as predictably, you have denigrated Malay aptitude for and competence in commerce. I again respectfully suggest that you have it all wrong. Malays are indeed shrewd businessmen, Malaysian style that is. The role models you have provided them have been the Halim Saads and Tajuddin Ramlis. These individuals are handsomely rewarded not for their expertise or entrepreneurialism, rather on their coziness with you. Other budding entrepreneurs learn quickly that to succeed, they too need not pay attention to their clients and customers but suck up to the politically powerful. The road to riches in Malaysia is not through creating and building, but getting the right contacts and contracts. You have created a class not of builders and creators, but of rent collectors and economic parasites.

You frequently lamented to the faithful on the evils of money politics. You have now finally admitted the obvious: UMNO is corrupt to the core. It is no longer only a political party, but a massive and insatiably greedy patronage system. The most comical if not bizarre episode was when UMNO Vice President Muhammad Taib too, condemned corruption. This from a man who was caught with millions in cash in his back pocket! Next you will have Mona Fendi [the woman who killed a senior politician out of greed and lust] lecture us on personal morality! Do you ever wonder why such messages fall on deaf ears?

You were shocked that in the last election [1999] only non-Malays appreciated your brilliant stewardship. Malays were, to paraphrase you, stupid, forgetful and ungrateful. It finally dawned on you that your party has lost the support of Malays. It took you and your fellow party leaders this long to appreciate this fact, as the loss was not reflected in the number of parliamentary seats your party won. You were shrewd enough to spare your party a humiliating thrashing through smart political maneuvering. You wisely called the election just before thousands of newly registered young and disillusioned voters became eligible. Others may carp but I salute your brilliant political move. Such tricks however, only work once.

It is my contention that Malays voted for PAS not because they were enamored with that party or that they were impressed with its leadership, rather they were fed up with the corruption (or money politics, as you euphemistically phrase it) of UMNO.

The next election will be different. If your party does not change radically there will be an implosion. Although I predict that your party will again return to power, it will be denied its two-thirds majority. UMNO will suffer the humiliation of winning fewer seats than PAS. To add insult to injury, your home state of Kedah will fall to PAS. To rub salt on a raw wound, your long-held Kubang Pasu seat, should you not contest it, will also go to the opposition.

Nothing would please me more than to be proven wrong. Perversely the 9/11 terrorists’ attacks on America could prove to be your and your party’s savior. No, it has nothing to do with your swift condemnation of those abominable acts—you were absolutely right in quickly denouncing those despicable terrorists—rather it has everything to do with the unbelievably stupid reactions of the leaders of PAS. I have never been impressed with the senior leadership of that party, and their behavior following those horrible tragedies merely confirmed my worse suspicion of them. I have every reason to believe that they will continue their present pattern. But it would take more than the floundering of PAS to reverse the fate of your party.

Malaysians have changed and you can rightfully claim credit for many of those changes. But you are now like an insecure mother who does not notice the subtle changes in her brood, and continue to force-feed them the same pablum to her fully grown children. And when they protest or rebel, she puts on a guilt trip about being ungrateful. Wise parents recognize that the chidings and reprimands that work in childhood are counterproductive on teenagers and grownups.

Instead of continually berating us, I suggest that you provide us with the necessary ladders and safety net. With enough ladders our people will climb up without your having to exhort them. With an adequate safety net below they will be further emboldened. But do not repeat the mistakes of Western democracies by making too elaborate a social safety net. Too comfortable a safety net and it becomes a hammock, and Malaysians would then succumb to our own version of the “British disease” of social welfarism rampant during the pre-Thatcher era. In many ways our special privileges are doing that now to Bumiputras. The programs are becoming too cushy; they lull instead of invigorating Malays.

As for ladders, an effective one would be an excellent school system and relevant curricula. We must make all our young fluently bilingual, science literate, and mathematically competent, whether they want to be an alim or a scientist.

You have concentrated on physical infrastructures in the past. Now I implore you to emphasize our most precious assets – our people. You are mighty proud of our airport being among the best, we should likewise aim for our universities and schools to be the same.

You never miss to take foreign visitors to see your new pride and joy, the Petronas Twin Towers. Sadly, the only thing Malaysian about that monument is the land on which it is built. Everything else, from the design to the laying of the bricks, was done by foreigners. Wouldn’t it be nice if our universities and research centers too were of such eminence that foreigners would want to visit them?

You have repeatedly reminded us of Allah’s bounty on our land. Not only are we spared many of nature’s calamities, we are also blessed with some of the richest resources. Our warm waters and pristine beaches are the envy of the world; they would be prime tourist destinations especially for those from the West. You repeatedly sent trade missions to the West to drum up potential investments. But we cannot begin to attract tourists or investors if we continually denigrate their culture. We have enough problems of our own culture; there is no need for us to lecture others. Besides, they have their own critics who are much more eloquent and effective. Quit worrying about the degeneration of the West and concentrate instead on reversing the deterioration of Malaysia.

So the next time you address us, consider this. If you think that we have not changed under your leadership for the past twenty years, it is unlikely that we would ever do so in the few remaining years you have. Relent. Encourage us instead; it might just work. Do not besmirch your wonderful legacy by having us remember you as other than an esteemed leader.


M. Bakri Musa

[This concludes the serialization of my book, Malaysia in the Era of Globalization, published in June 2002.]