Saturday, January 27, 2007

Escalating Iraq war is correct decision..

The article 'Escalating Iraq war height of folly'by Dr. Chandra Muzaffar represent his personal view which is devoid of any basis or truth.How could the writer be so presumptious as to conclude that'The majority of Iraqis are opposed to his plan'.He even went further to say that the Arab Sunnis community and the Shites leader under Prime Minister Nuri Al- Maliki 'had misgivings about the injection of 21,000 additional American troops in Iraq.'
Dr. Chandra's argument is not only fallacious but also shabby and amaeturish.In an interview conducted by CNN regarding the additional troops, majority of the miniority Sunnis were supportive of the move for the simple reason that American presence would at least prevent a massacre of the miniority Sunnis should sectarian conflict take place.For many years Miniority Sunnis had enjoyed unprecedented priveleges under Saddam Hussein's rule.The over throw of Saddam has now reversed the role and Shites at the helm would not hesitate to engage in a sectarian blood bath against the miniority Sunnis which had oppressed the Shites under Saddam.The Sadr militia was responsiblefor many of the sectarian killings of Sunnis whichtook place in Baghdad.Under such circumstance Chandra's assertion does not hold water.The additional American troops contrary to Chandra's view would afford more protection to the Sunnis.
As for the Shites under P.M Nur al-Maliki,the latter made a special sojourn to the White House to plead to the Americans not to cut and run and leave Iraq.Instead of being displease, the Shites P.M should be even more grateful for America's commitment to stay and provide additional troops.So where does that leaveChandra's assertion that the Shite leadership wanted the Americans to leave?
As an analyst making comments in Iraq ,Chandra seem to lack basic knowledge with the repercussion of an early departure of American troops.Earlier lesson in Afganistan have shown that a hasty departure without securing control and establishing a stable govt would be disastrous.An early departure now byAmerican forces in Iraq would create a vacuum which would be infiltrated by Syrian and Iran ideology and radical islamic terrorists group like the Talibans and the al- Queda.Before that , the country would immediately be mired in sectarian violence and anarchy as the fledgeling Iraq security and army would not be able to quell any potential insurgencies.
I find the rest of Chandra's criticism ofAmerican occupation totally flawed and illogical.Which country would like to see their soldiers die daily in order to secure Law and order for Iraq?Given the choice President Bush would defintely want a quick exit.But the choice of a quick exit could have serious ramification and would have grave consequences for its future foreign policies and its fight against terrorist regimes.

Sunday, January 21, 2007

TNB record Bonus for its workers.

What is the rational for TNB to pay an averageof 2.7 months bonus to its 27,000 workers nationwide?The performance of this GLC has deteriorated ever since it was privatised and its service to consumers have been abysmal to put it mildly.Although its net profit surged to a record 82 per cent to $736.4 million for its fourth quarter ending August 2006,this was nevertheless bolstered by the recent tariff hike.
The President and CEO Datuk Seri Khalib Mohamad Noh admitted that the tariff hike contributed Rm$400 million to its earnings last year.(nst 20th Jan,2007). Since the increased in Profit was entirely due to the tariff hike and not due to better productivity or its improved services why should TNB reward its workers nationwide?To pay bonus based on mediocre performance is to reward incompetence.To seek a hike in tariffs and use the profit derived from this hike to pay its workers an average of 2.7 months of bonus is the height of irresponsibilty.
How could the CEO justify to the average consumer for a price hike in order to pay exorbitant bonus to its workers?Without the profit derived from the hike,TNB's profit would be a meagre $336.4 million. When compared to its huge capital outlay, such a performance would be gauged as below par.
The average citizen have a right to demand an explanation why the CEO and its board deemed it appropriate to pay such extravagant bonus when its workers' performance have deteriorated.The frequent breakdown and outages, the poor response for repairs,the hassle in making payments at TNB counters and the overall quality of services certainly do not merit any bonus at all.

Monday, January 08, 2007

The Spoilt Malay Businessman

The present govt policy of helping the bumiputras have created a generation of lazy malay businessman whose only goal is to make as much money as possible with the minumum of effort.Instead of teaching them basic business fundamentals they are taught to obtain lucrative contracts which are then farmed out to third parties.Skimming profits from inflated contracts is of course an easy way to make money and you do not need to have any business acumen to make a profit.All you need is political connection.
Instead of teaching the malays to fish for food the govt has simply put fish on their plates.What happens when there is no more fish on the plate?By then it will be too late because they wont know how to fish.
Handing out lucrative contracts like security labelling of cigarettes need no expertise in business.It is akin to a licence to print money.Every packet of cigarettes with a security label is taxed a certain amount.The beneficiary of this concession just collect an annual amount of $70-$100 million doing nothing.
Similarly, pharmaceutical products are also labelled and the beneficiary of this concession stand to collect a cool $150- $200 million per annum.
Then what about contracts given for the supply of equipment and spareparts?Bumiputra companies given such contracts merely add a percentage of profit and charge the goods at an inflated price.
The recent fiasco in the transportation of National trainees to their respective camps was another typical example of giving lucrative transportation contracts to agents who were not even familiar with the transporting system.Instead of an open tender to award to the most experienced and cost effective transporter the concession was given to retired army officers and agents who were not familiar with the organisational aspect of the transport system.
Giving few thousand A.Ps monthly to a few bumiputras is not training them to be good automobile dealers.Just because they become rich because of such practice does not vindicate such a policy.Any ten year old kid without any business knowledge can be filthy rich if given 1000 A.P's monthly.
What about mega projects like the 2nd Penang bridge which was awarded to an UMNO connected company.?The contract price given to UEM bhd was $3billion and the contract was subsequently sub-contracted to a China company for $2.3Billion.UEM stand to make $700 million for just getting the initial contract.
Such a practice of awarding contracts and concession means that in the long run it will cost more to do business here.We not only lose our competitiveness but consumers will have to pay more for road tolls and all consumer products.
In the final analysis, such a system of awarding lucrative contracts to malay businessman will not produce a generation of competent malay businessman able to face the challenges of a globalised world but instead will produce a generation of lazy malays waiting for easy hand-outs.

Thursday, January 04, 2007

The Great EPF Scandal

Of late the management of EPF has thrown caution to the wind and involved itself in some of the most ludicrous investment ever seen.Most of its recent ventures would not be considered prudent and yet EPF which is suppose to zealously and wisely invest employees contributed funds has ploughed their money in such absurd investment like purchasing a stake in the Healthcare company of Columbia Asia.This is an area of investment that it has no history of any knowledge and yet it was prepared to put employees hard earned savings in purchasing an equity in the company.Why was such an investment decision made and who made them?The whole deal stinks to the core and yet the management went through with the deal.
Last month EPF made a deal with an UMNO connected company, MRCB to purchase property worth $80million.If it was such a good deal surely EPF would be the last to benefit because MRCB is not known for its generosity in giving EPF a leg up for the investment.The ulgly truth is that MRCB found that EPF was a convenient cash rich vehicle to absorb its unsaleable assets.Without proper due diligence I would not be surprised that the properties were sold at highly inflated values.
Records obtained from the public domain indicate EPF have investments in the following companies:
1. Bank Islam
2. Bank Pertanian
3. MAS
4.RHB bank
The above lists are not meant to be exhaustive but was deliberately highlighted because it share a common thread.All of them suffered losses.There are other losses which I may have excluded for lack of knowledge.
Since most EPF contributors are from the private sectors and govt servants do not contribute because of their pension schemes, it would be fair to say that90% of all contributors are derived from non malays.If that is the case why no non malays are appointed to the board and why no non malay CEO is appointed to manage EPF.?
For so long now the govt have treated EPF as a GLC and have appointed its cronies to manage EPF funds.Many of its dealings have been shady and non transparent and majority of the dubious investments have ended in losses.If a due diligence assignment were to be taken now there is no doubt that EPF would be insolvent.Its investment in the property company of MBSB alone in the 80s brought losses of nearly $1billion.How many of EPF's profitable investment would be required to offset this loss?
There need to be an investigation by an impartial body to determine why EPF have now become so irresponsible.Employees hard earned savings should rightly be invested in gilt-edged shares and govt securities and bonds which have a secure albeit lower rate of return.The guardian of EPF have no right to be adventurous and invest in speculative and risky ventures where there is a risk of failure no matter how miniscule.Now that it has taken the risky route and the investment have ended in losses may we ask who is going to be responsible?.
The govt cannot continue this present lackadiscal course and hope to recover its present losses from future investments.At some point in time we may want to find out how EPF is goingto pay its divdends when the majority of its investments have ended in losses.Most GLC are not professionally managed and as a result most of them have suffered substantial losses.The govt should not treat EPF as a GLC.It should appoint professionals to manage EPF in a transparent manner devoid of any speculative and risky venture.To do so would be at their own peril because the livelihoods and future well being of millions of contributors may very well depend on the success of EPF's investment strategy.