Thursday, 23 November 2017

Malaysia's economy: stronger but eroding purchasing power

The story is the same everywhere – the rising cost of living has not been accompanied by an increase in wages.

HERE we go again – another set of impressive growth figures. Bank Negara has announced Malaysia’s latest economic growth at a commendable 6.2% in the third quarter of 2017.

The pace of economic growth for the three months up to September was faster than the 5.8% registered in the second quarter of the year.

This growth rate was the fastest since June 2014.

On a quarter-on-quarter seasonally adjusted basis, the Malaysian economy posted a growth of 1.8% against 1.3% in the preceding quarter, according to the Statistics Department.

Malaysia’s robust economic growth has been attributed to private-sector spending and a continued strong performance in exports.

To quote Bank Negara governor Tan Sri Muhammad Ibrahim last Friday: “Expansion was seen across all economic sectors.”

But try explaining this impressive economic growth rate to the average salaried worker struggling to pay his monthly household bills.

Stretching the ringgit is especially great for those living in urban areas, and Malaysia is increasingly becoming urbanised.

The story is the same everywhere – the rising cost of living has not been accompanied by an increase in wages.

Compounding matters is the depreciation of the ringgit, reducing the purchasing power of the ordinary folk. They can’t buy the same amount of food as they used to previously.

Employers are being forced to cut operating costs to match declining profits.

Job security is becoming paramount. Many are fearful of losing their jobs, as companies cut cost to cope with the challenging business landscape.

And the reality is that many companies are not hiring, as evident from the unemployment rate of 3.4%.

The Malaysian Employers Federation (MEF) has cautioned that more people would be out of a job this year due to the current economic challenges.

Apart from the challenging landscape, technology has disrupted several brick-and-mortar businesses, forcing them to change their way of doing business.

According to MEF executive director Datuk Shamsuddin Bardan, economic challenges will compel bosses to review their workers’ requirements.

While official statistics show that the economy is charting a strong growth path, the trickle-down effect is not being felt.

Why is the sentiment on the ground different from what the politicians and officials are telling us? Why is there a disconnect in the economy?

Are the figures released by the government officials more accurate and authoritative compared with the loud grumblings on the ground that are anecdotical in nature devoid of proper findings?

We hear reports of supermarkets and hypermarkets closing down, but could that be because their business model no longer works as more Malaysians turn to online shopping, with e-commerce companies announcing huge jumps in traffic?

It is the same with the malls – retail outlets are reporting lower sales and this is compounded by the fact that there is an oversupply of malls.

International restaurant chains such as Hong Kong’s dim sum outlet Tim Ho Wan and South Korean bakery Tous Les Jours and South Korean barbeque restaurant Bulgogi Brothers have ceased operations.

But then again, it could be that their offerings and prices had failed to compete effectively against the local choices.

According to the central bank, demand is anchored in private-sector spending.

“On the supply side, the services and manufacturing sectors remain the key drivers of growth,” Muhammad said.

Looking ahead, the governor said that the economy this year is poised to register strong growth and likely to hit the upper end of the official target of 5.2%-5.7%.

The trickle-down effect is not being felt simply because there is uneven growth in the various sectors of the economy.

The property sector, which provides the biggest multiplier effect, continues to be in the doldrums.

The weak ringgit has had a big impact on the price of food, especially processed food and beverages that make up 74.3% of Malaysian household spending.

It was reported that Malaysia had imported a whopping RM38bil worth of food between January and October last year.

In recent weeks, the ringgit has strengthened to about RM4.16 against the US dollar. But it is still far from RM3.80 to the dollar and the outlook of the currency remains uncertain.

We can’t even hold our heads up against the Thai baht and Indonesian rupiah – two currencies that have appreciated against the ringgit.

The headline economic numbers are showing good growth, but Malaysians’ purchasing power has dropped and our living standards have eroded. That is the bottom line. We are living in denial if we do not admit this.

This column first appeared in StarBiz Premium.

Source: On the beat by Wong Chun Hai, TheStaronline



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Tuesday, 14 November 2017

Call to shed light on PDC's huge debts owned ot Penang govt



GEORGE TOWN: The state has been told to explain the financial status of Penang Development Corporation (PDC) over its alleged mounting debts.

Datuk Dr Muhamad Farid Saad (BN-Pulau Betong) said PDC received a RM600mil loan last year from Budget 2017, while in Budget 2018 the loan to PDC was approximately RM300mil.

Questioning if the debts indicate that PDC was not on stable financial ground, he asked if PDC would be able to pay back the huge sum to the state.

“Both loans are huge. How is PDC going to pay it all back?

“What has happened to the revenue of PDC in recent years? We would like some answers to the whereabouts of the expenditure on whether the sum was used for investment or loan to a third party.

“Is the PDC today not on stable financial ground until there were some who said that PDC has to take a bank loan to give out salaries,” he said when debating the Supply Bill and Budget 2018 at the state assembly sitting yesterday.

State Opposition Leader Datuk Jahara Hamid (BN-Telok Air Tawar) also raised her concern if PDC “was in the red”, considering that it was among the corporations in the past which had developed Bayan Baru and Seberang Jaya.

“PDC has also contributed to numerous state funds. But now, it is the opposite. PDC is borrowing money from the state government,” she said.


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Sunday, 12 November 2017

Wanted: Leaders who listen !

Turning a blind eye: The grumblings over exposed hills are growing louder but little is being done to rectify the situation


 

Grievances from residents warning of environmental damages must not fall on deaf ears


“Leaders who don’t listen will eventually be surrounded by people who have nothing to say.


MY family home in Kampung Melayu, Air Itam in Penang, is more than 56 years old. That’s about my age, and it has never been hit by floods. Not once!

But last week, my parents – dad is 92 years old and mum, 86, – had their sleep rudely interrupted sometime after 1am by water gushing into their home.

They have been sleeping on the ground floor for years now because they are too old to climb the stairs to their bedroom.

The water that flowed into their room almost touched the top of their bed but fortunately, one of my nephews and his wife from Kuala Lumpur were staying over that night.

It was so fortunate that they were there to calm my anxious parents down and assure them all would be fine. They managed to comfort my stunned folks, who had never experienced such an unpleasant situation before. My father had to be carried to the room upstairs as the house remained flooded throughout the early morning.

Our home was filled with layers of mud the next day and the cars parked outside were all damaged. They sadly look like write-offs.

My father’s pride and joy, his first-generation Proton Saga car – which he bought in 1985 – is now unusable.

A week on, my brothers and nieces are still cleaning up the mess from the massive flood. They haven’t had the time or mood to even assess the financial losses.

And bound by a common sentiment as Penangites, they are tired of the blame game, a trade the state’s politicians have plied to near-perfection.

How many times can the finger be pointed at the previous government, with the incumbent almost 10 years in power? And how many more times can we blame it on torrential rain, which came from Vietnam – or wherever? Worst of all is, when discussions are mooted on flood issues, the voices of the people are swiftly silenced.

It appears that even to talk about hillslope development, one would have to contest in the elections, or be perceived to be challenging the state government, or more extremely, be some kind of lackey in cahoots with the Federal Government.

Blaming everyone else except oneself is simply a way of covering up one’s weaknesses. But the discerning public, in a maturing democracy with heightened transparency and a huge middle class like Penang, will not tolerate such short-term manoeuvring for long.

Suddenly, civil society – a buzzword among politicians – has vanished, with NGOs now regarded as irritants and an affront to the state establishment. Politics is apparently the monopoly of politicians now.

As the National Human Rights Society aptly puts it, “With the benefit of hindsight, we are sure that the Penang government now realises that they should not so readily malign civil society, howsoever obliquely – for the legitimate and well-founded articulation of matters of great concern to civil society.

“This is because it undermines the fundamental values of a functioning democracy and the fundamental human rights of the populace at large.”

Perhaps, the state political elites, many of whom aren’t pure blood Penangites, don’t realise the state is the home of a vibrant civil society, with many active NGOs and activists who are respected influencers of society.

Having walked through the corridors of power and appreciated power’s pleasures, perks and the adulation it brings, maybe it is becoming much harder for people to take criticism. This is, in fact, a reflection of the arrogance of power.

Many have developed thin skin now, with little tolerance for the slightest form of criticism. If anyone even dares raise their voice, an army of cybertroopers, hiding behind anonymity, are unleashed to attack them.

Freedom of speech, it seems, is only the domain of the opposition, with some media (regarded as unfriendly) unceremoniously ridiculed and questioned for their attendance at press conferences.

There are politicians from the Federal Government, too, who are shamelessly cashing in on the flood situation in Penang.

Their relief work must be splashed across news pages, and they have to be seen wading through the flood waters for dramatic purpose. Phua Chu Kang’s iconic yellow boots could likely be the hottest item in the state, as politicians bask in the media’s glare.

Ridiculous remarks have also been passed, one even blaming the state government, saying it has earned the wrath of God.

The rain and floods will go away, eventually. Penangites are stakeholders in the state, and they don’t only make up politicians. The state doesn’t belong to the state government or the opposition.

Caught up in the thick of the action, we seem to have forgotten that the hills are crumbling even without rain. As a stern reminder, just last month, a landslide buried some people in Tanjung Bungah. Investigations on that tragedy are still ongoing.

Basically, the trees – which act as sponge on the hills – are gone. We don’t need to be soil experts to know that.

The grumblings are growing louder because the hills have been progressively going bald in recent years. But the voice of discontent has fallen on deaf ears.

Penangites are alarmed at what they are seeing, and they don’t like it one bit, as much as they understand that land is scarce on the island and property developers need to source some to build homes on.

While it’s easy to hang the Penang state government out to dry for its follies, it’s difficult to ignore how the floods in the east coast states have become annual affairs, too. So, what effective flood mitigation plans have been put in place there?

Kelantan has suffered senselessly, and after more than a year of having been subjected to Mother Nature’s havoc, many victims have yet to recover from their losses. Flooding is obviously nothing exclusive and doesn’t discriminate. Every state has, unfortunately, experienced it in some shape or form.

So, irrespective of location, when life returns to normal, you can expect the politicians to resume their old denying ways.

If there’s a thread that binds our politicians – regardless of which side of the political divide they come from – it is their inability to apologise for their mistakes, despite waxing lyrical about accountability.

Don’t expect them to say sorry, because an apology would be admission of guilt, or worse, a sign of weakness in their realm of inflated egos.

And to put things into perspective, perhaps we could learn a lesson from a quote by prominent American pastor Andy Stanley – “Leaders who don’t listen will eventually be surrounded by people who have nothing to say.”


On the beat Wong Chun Wai

Wong Chun Wai began his career as a journalist in Penang, and has served The Star for over 27 years in various capacities and roles. He is now the group's managing director/chief executive officer and formerly the group chief editor.

On The Beat made its debut on Feb 23 1997 and Chun Wai has penned the column weekly without a break, except for the occasional press holiday when the paper was not published. In May 2011, a compilation of selected articles of On The Beat was published as a book and launched in conjunction with his 50th birthday. Chun Wai also comments on current issues in The Star.

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Saturday, 11 November 2017

Penang landslides & flooding: are natural disasters man-made?

It’s hard to deny when the effects of climate change are all around us


 Andrew Sheng says that from increasingly intense hurricanes to regional landslides and flooding, it’s clear our actions are effecting the environment. But, it’s also evident that there are ways for us to avert disaster and change course


AFTER two Category 5 hurricanes (Harvey and Irma) hit the US in October, followed by Maria hitting Puerto Rico, no one can deny that natural disasters are devastating.

With three hurricanes costing an estimated US$385bil, with less than half insured, the poor are suffering the most because they cannot afford to rebuild as the rich.

This year alone, monsoon floods in Bangladesh, India and Nepal have left millions homeless. This year will therefore break all records as Munich Re-insurance data suggests that 2016 natural disaster losses were only US$175bil, already 28.6% higher than the 30 years (1986-2015) annual average of US$126bil.

But how much of these natural disasters are man-made?

Despite US President Trump being sceptical of climate change, the US Global Change Research Program Climate Science Report published this month concludes that “it is extremely likely that human activities, especially emissions of greenhouse gases, are the dominant cause of the observed warming since the mid-20th century”.

Carbon dioxide concentration already exceed 400 parts per million, last occurred about 3 million years ago, when both global average temperature and sea level were significantly higher than today. Roughly one third of carbon emission is due to residential heating/cooling, one third for transport and one third for industrial production.

Human activities on Mother Earth include over-consumption of natural resources, cutting down forests, polluting waters and excessive cultivation/development that caused desertification or soil erosion. You see this from warmer surface and oceanic temperatures; melting glaciers; diminishing snow cover; shrinking sea ice; rising sea levels; ocean acidification; and declining tree and fish stock.

Oceans warming up

Hurricanes are caused by oceans warming up, building energy and vapour levels that create freak typhoons, tornados and massive downpours. At the same time, droughts are also occurring with more frequency for longer.

Scientists estimate that global average sea level has risen by about 7-8 inches since 1900, with almost half that rise occurring since 1993. Everyday, we hear new extreme events, such as unusually heavy rainfall, heatwaves, large forest fires, floods or landslides.

Climate warming is most observable in the water-stressed Middle East and the North Africa/Sahel region, where rapid population growth created desertification, food shortages, civil conflicts and ultimately, outward migration towards cooler climates, especially Europe. This hot region accounts for 60% of global war casualties since 2000, with 10 million outward refugees. About 90% of the world’s refugees and asylum seekers come from four regions with half under the age of 18 years.

A 2016 World Bank report estimated that these water-stressed countries’ GDP could be reduced by up to 6%, with dire consequences on stability. Without water, industries cannot function, food cannot be cultivated and health can deteriorate due to disease from water-shortage and drought.

European estimates suggest that each refugee costs roughly US$11,600 per person to maintain and there are already one million trying to enter Europe last year. The OECD has classified countries such as Afghanistan, Central African Republic, Iraq, Somalia, Sudan, Syria and Yemen as extreme fragile.

Critical point

The world is already reaching a critical turning point. If the Paris Climate Accord can be implemented, with or without the United States, there is some chance of averting further global warming.

But closer home, we are already witnessing the effects of climate change on our daily lives.

In 1972, Hong Kong experienced a devastating landslide near Po Shan Road in Mid-Levels, which caused 67 deaths and collapse of two buildings. One cause was unstable ground following heavy rainfall from Typhoon Rose eleven months prior to the incident.

This tragedy in densely populated Hong Kong resulted in rigorous slope protection and inspection of drains to ensure that these slips do not occur again. I lived near Po Shan Road and admired how Hong Kong engineers regularly inspected the slope protection measures and that the drains were always clear.

In 1993, the collapse of Highland Towers in Kuala Lumpur was partly attributed to the clearing of the hilltop above Highland Towers, which led to soil erosion and the weakening of the foundations. By the time the residents detected cracks in the buildings, it was already too late. Some of my personal friends were among the 48 persons who were killed in that collapse.

Last weekend, Penang (where I live) had the worst rainstorm and floods because we were hit by the tail end of strong winds from Typhoon Damrey, one of the strongest to hit Vietnam in 16 years, leaving 61 people dead. Driving along Penang Bridge, I can see that the continued hilltop developments in Penang are leaving soiled scars on the previously pristine landscape, I am reminded of Highland Towers and Po Shan incidents. Natural disasters are acts of god, but the size of their impact on human lives are completely within our control.

Soil erosion

Soil erosion does not happen overnight, and require responsible developers and conscientious governments, as well as concerned citizens, to be continually vigilant that maintenance of roads and drains, including soil inspections, are serious business with serious consequences.

Modern technology can provide drones and inbuilt sensors that can detect whether erosion is reaching critical levels. Regular maintenance of drains and checks on stability of the soil, especially where there has been recent clearing of trees in steep slopes, will forewarn us all of impending accidents.

As cities are building more and more on hillsides subject to torrential rain, Penang should seek technical expertise from Hong Kong which has extensive expertise on the maintenance of steep hill slopes that are subject to typhoons and sudden rainfall.

Landslides are today used more in political terms than in real terms. The next time landslides happen, residents who watch daily the erosion of their natural environment will know who is really looking after their interests.

Andrew Sheng 




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Friday, 10 November 2017

Sustainable Development in Penang

Why did MBPP approve the Tanjung Bungah development project?
Read more at https://www.malaysiakini.com/letters/399357#qbRd534yu1JfC551.99 
https://www.malaysiakini.com/letters/399357

The never ending torrential rain in Penang over the weekend was an act of God. A natural phenomenon which is a perpetual feature of our equatorial climate. Nobody would wish to have the heavens open up with such vengeance on any state.

Naturally, when the rain intensity is so great, floods will occur. We should always be vigilant during the annual monsoon season.

Flood mitigation starts from the local council and state government. Every council must take into consideration the terrain, rainfall and built up surfaces in their area. While we can always engineer ourselves out of a flood, there is always a cost versus benefit consideration. There are some low-lying areas in a flood plain that will perpetually be flooded when it rains and if we situate developments in those areas, we have to be prepared for such events.

On a small island like Penang, with its hilly terrain, engineering flood mitigation measures must be a long term and all-inclusive plan encompassing all urban growth zones. It will not be cheap, mainly due to the high land cost and the expense incurred to provide adequate storage for the surface runoff.

As the island develops, open permeable spaces will continue to diminish causing higher runoff to flow downstream into the coastal areas. Couple that with tidal phenomenon and the incoming surface runoff will easily overwhelm the drainage system causing a rise in water level.

The question we should all be asking is how do we reduce the incidence of flooding? Unfortunately, especially with our tropical climate, it is quite impossible to entirely eliminate flooding. Anybody that promises that is telling you a blatant lie.

With the right planning and engineering, we can reduce the incidence of flooding and lower the magnitude of the damage caused.

Penang’s terrain bears much similarity to Hong Kong. Being in the path of tropical storms and typhoons from the Pacific Ocean, Hong Kong bears the brunt of some of the regions worst storms. On average, six tropical cyclones slam into Hong Kong every year. While flooding still occurs in Hong Kong, they have managed to reduce the damage it causes.

There are many lessons Penang can learn from Hong Kong.

If DAP still wants to continue to develop the state in a sustainable manner, they must implement special flood mitigation requirements in addition to the ones provided by the JPS Masma manual. If the hills are being cleared, the increased runoff will tax the existing drainage system. Siltation will occur, evident from the brownish flood waters, as topsoil and sediment from the hills wash down into the coastal plain. These sediments, unless periodically maintained, will clog existing waterways, thus reducing drainage efficiency.

The ultimate problem with highly built up areas is the immense volume of runoff from storms. Sufficient storage areas in the form of retention ponds and green open areas should be provided to retard the flow of water into the rivers.

Due to its terrain and the high-density development on the island, it is expensive to provide adequate stormwater storage within a development.

Catchment areas next to hillslopes also have a large volume of runoff moving at a high velocity. The damaging effect of erosion is quite evident on many of these hill projects. Sometimes water currents are so strong, even paved roads can be ripped apart.

Some of the more innovative solutions for Hong Kong’s flooding problems like the underground stormwater storage system has worked very well over the years together with a comprehensive Drainage Master Plan.

The Drainage Services Department of the Hong Kong SAR constructed massive underground tanks to route surface runoff intercepted from uphill catchments during storms only to slowly release the stormwater into the natural waterways when the storm abates.

The Penang state government has a duty of care to the residents of Penang to ensure that disasters of such proportion should not happen.

Over the past four years, a total of 119 incidences of flooding has been recorded in Penang. Penang is an economic powerhouse and home to some of the world most high-tech electronics producers.

The state government has to provide a safe and secure environment for investor to house their production facilities and assets. Otherwise, multinationals might shun the island because of the cost of protecting and insuring their priceless assets. Productivity would be affected and the cost to remedy the damage.

We will only find out the true financial cost of this disaster over the next few weeks.

For Penang to recover from this tragedy, federal funding is required to repair all the damaged infrastructure within the state.

The very least they can do is to provide a COMPETENT flood mitigation plan for the state starting with a comprehensive Drainage Master Plan Study.

The Penang government has to be ACCOUNTABLE to the people and not private developers. If certain waterways and catchment areas have to be gazetted as permanent drainage and storage areas, then so be it.

The safety and well-being of the Rakyat has to come first. Lastly, in the interest of  TRANSPARENCY, Penang has to launch an inquiry into how the local council approved property developments on Class III slopes without adequate slope protection.

The collapse of many retaining structures and slope failures in such risky locations is cause to for concern because as of right now, any dwelling structure located downstream to those development could possibly be the scene for the next Highland Towers.
Kong Len Wei@konglen wei

Source: by Kong Len Wei, a Civil engineer  and councilor for Majlis Perbandaran Manjung and the Chairman of MCA Youth Perak Young Professional’s Bureau


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