The center of world economic gravity moving east as AIIB shows

Chinese President Xi Jinping (C, front) poses for a group photo with the delegates attending the signing ceremony for the Articles of Agreement of the Asian Infrastructure Investment Bank (AIIB) at the Great Hall of the People in Beijing June 29, 2015. [Photo/Agencies]

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Financial leaders of 57 states gathered in Beijing on June 29 to sign the agreement for establishing the Asian Infrastructure Investment Bank (AIIB), expected to become the region’s largest investment bank in the 21st century.

Seventy years ago, the World Bank was established, led by the US and its close western economic and political allies, as the first global financial institution. Along with the World Trade Organization and the International Monetary Fund, the western powers have commanded world financial and trade order for more than half a century. Even the Asian Development Bank (ADB), established 20 years later after the World Bank, has been largely controlled by Japan, backed by the US and other western economic powers.

China benefited from the global and regional development and financial institutions in the initial stage of economic reform and openness. As China expanded its economic strength it has aggressively contributed to financing them. However, despite its financial contribution to these institutions rising significantly China still has limited influence over management and operation.

China’s desire to influence world financial order and its inability to do so have been due to the governance structure of these institutions where China is not only a minority shareholder but its voting rights are marginalized.

Since the world financial crisis, triggered by the US subprime mortgage crisis and the EU’s debt problem, China’s relative importance in the world economy has risen rapidly. By 2010, it surpassed Japan to become the world’s second largest economy, and by 2012 it overtook the US to become the world largest trading nation as well as the largest producer and consumer of motor vehicles.

Apart from China’s second-to-none manufacturing capability, it holds the world’s largest foreign exchange reserves which have to be used effectively so they can generate a financial return and make appropriate contributions to infrastructural development in Asia, the largest and fastest growing region among all continents.

In addition, China, India, Russia and other initial AIIB member states have the financial strength and managerial confidence to create a new financial institution similar to the World Bank and ADB. For the initial $100 billion fund to be pledged, China has agreed to contribute 29.7 percent, India 8.3 percent, Russia 6.5 percent, Germany 4.4 percent and South Korea 3.75 percent. Other major contributors include the UK, Australia and Indonesia.

Both the US and Japan have not expressed their intention to join AIIB although many US political and economic allies have come to Beijing to sign the agreement, particularly the UK, Germany, France, Italy and Australia. The diversion of these countries' attention away from the US to China and Asia not only reflects ever rising business opportunities in Asia, but also the relative decline of the US-led western influence on the global economy and financial order.

The apparent shift of economic gravity from the West to the East reminds me of my personal experience in the past. Thirty year ago, I was awarded a World Bank scholarship from a university in Hainan to study in the UK in 1985. At that time, the salary of a Chinese university lecturer was less than 1 percent of his UK counterpart. Today, all the top Chinese universities are able to pay significantly more than the equivalent UK or US salaries to attract overseas talents to work in China. In addition, numerous university teachers in China can easily apply for more research funding than their western counterparts.

Although China is still a developing economy by definition, it has exceeded many western powers in a number of areas such as equipment manufacturing, high-speed railways, nuclear power, construction, infrastructure engineering and space technology. In 2014, Chinese scientists produced the second largest number of high-impact academic journal papers in the world.

China started the first high speed railway 30 years later than Europe, but by 2014, has built 16,000 km of high-speed tracks, twice as long as the total length of all the EU countries put together. BYD, one of China’s private auto makers, has marched to California to build electric buses for the local market.

India is racing to follow in China’s footsteps. Its economy was growing as fast as China in 2014 and is set to overtake China’s growth in 2015. However, India’s transportation systems are so poor that they are evident constraints on the country’s development. It is expected that India will require $1 trillion to improve its transportation systems, and the establishment of AIIB will be helpful to its development needs. Other Asian countries face similar problems of investment for roads, railways, airports, seaports, telecommunications and internet.

AIIB will become a potent propeller to accelerate economic and social development in Asia. Along with the Silk Road Fund and the Brics Bank, China will use AIIB to implement its “one- belt and one-road” regional and global development strategies.

The Silk Road Economic Belt and the 21st Century Sea Silk Road will cover more than 60 countries surrounding China, and many will benefit from China’s outward-looking investment and development strategies. Under Xi Jinping’s leadership, China has gained increased support from neighbouring countries in Asia and many others in Latin America, Europe and Africa, thanks to its persistent foreign policy of peaceful cooperation, mutual benefit and common prosperity.

The future operation of the AIIB may face many challenges and uncertainty, but the AIIB has signified the rapid emergence of China, India and other developing and transitional economies. The determination and confidence for success through the AIIB and other newly created financial institutions suggest that the world financial and political order will be different from now, as the overwhelming dominance of the World Bank and ADB in Asia and the world financial systems will inevitably decline in the future.

By Shujie Yao (chinadaily

The author is a professor of economics, Chongqing University and the University of Nottingham.

Through AIIB, China can learn to lead

Representatives of 57 prospective founding members of the Asian Infrastructure Investment Bank (AIIB) gathered in Beijing on Monday for the signing ceremony, with 50 of them endorsing the AIIB agreement. As the largest shareholder, China takes a 30.34 percent stake and correspondingly has a voting share of 26.06 percent, which actually enables China to wield a veto on major issues, such as electing the bank's president. This is a moment that our nation could never have imagined just 10 years ago.

The move forward in the AIIB, however, seemed to have no bearing on people's feeble confidence in China's stock market, as shares plunged amid a flurry of automatic sell orders on this remarkable day.

However, the country's fundamental confidence has been elevated to a new stage. This is the first time ever that China is leading an international multilateral bank. Its influence is prominent and far-reaching, and it carries more profound significance than successfully hosting an Olympic Games.

It took China less than six months to complete the signing of the AIIB agreement and this efficiency shocked the world. Although China barely has any experience in this regard, it is proof of its excellent capacity to learn and of its eager pursuit of fairness and equity. The first batch of 50 signatories is far more than the number of founding members of the Asian Development Bank (ADB).

China's attempt to lead the international financial institution may have been forced by unfair treatment in other institutions or China may want to test experiences with the AIIB as we are still a developing country. But from now on, we must shoulder our responsibilities.

Of these responsibilities, the foremost is to bear criticism as numerous Western observers are waiting to find faults with and go bearish about China. But regardless of what they say, China must stick to its current trajectory.

In recent years there have been fewer protests by China, but frequent ones against Beijing overseas. China needs to stick to its major principles, but it does not need to be entangled in minor issues.

US allies that have joined the AIIB do not mean to flatter China, but they see the benefits will outweigh their relations with Washington. With GDP at the $10-trillion level, can China build more platforms of common interest and convince the outside world that working with China always means a win? This serves as the key to China's further rise without encountering strong resistance from the outside.

Compared with the IMF, World Bank and the ADB, the AIIB indicates that the environment where China is rising may not be as terrible as we conceive. We must grasp the opportunities.

Source: Global Times Editorial

50 nations sign AIIB deals - China wields veto powers, enjoys 26% voting rights

China's role as the largest shareholder with significant voting rights in the Asian Infrastructure Investment Bank (AIIB) will make the country shoulder more responsibility in turning the bank into a high-quality financial institution to complement existing multilateral development banks, experts said Monday.

A total of 50 prospective founding members of the AIIB on Monday signed the bank's articles of agreement (AOA) in Beijing, which outlines the bank's objectives, operating principles, governance structure and decision-making mechanisms.

Seven members, including Denmark, Thailand and the Philippines, failed to sign the AOA on Monday. China's Ministry of Finance said they can sign the agreement anytime this year.

"The signing of the AOA is a milestone in the establishment of the bank," Vice Minister of Finance Zhu Guangyao told the Global Times Monday on the sidelines of a forum in Beijing.

The bank was proposed by President Xi Jinping in 2013 during his visit to Indonesia.

Xi said on Monday that China's development would not have been possible without Asia and the world.

"As China grows stronger, we are willing to make our due contribution to world development," he said.

Zhu said the AIIB's establishment process has outpaced other multilateral development banks, and its objectives have won support from members within and outside Asia.

"We hope AIIB members' legislatures will approve their AOA membership as soon as possible and get the bank's operations going by the end of the year," he added.

Voting shares

The AIIB will have an authorized capital of $100 billion, and Asian members are required to contribute up to 75 percent of the total capital, leaving the rest to non-Asian members, according to the AOA.

China is the bank's largest shareholder with a 30.34 percent stake. This gives China 26.06 percent of the voting shares, also the largest, within the multilateral financial institution.

"It is within expectations given China's huge economy, and it also means China needs to shoulder more responsibility in building the AIIB into a high-quality bank," Ruan Zongze, vice president of the China Institute of International Studies, told the Global Times Monday.

According to the AOA decision-making mechanism, China has effective veto powers over major decisions because it has voting shares of over 25 percent.

China does not seek veto powers in the AIIB, Vice Finance Minister Shi Yaobin told the Xinhua News Agency Monday. He said the country's stake and voting shares in the initial stage are natural results of current rules, and may be diluted as more members join.

"Being a major Asian economy, Japan's entry will dilute China's stake and voting shares more than any other country, but so far we have not seen such a sign," Ruan said.

He said he believes the AIIB is not likely to approve a large number of new members in its initial stage. Instead, it will focus on rolling out investment projects.

Owning veto powers does not mean that China will use these powers in AIIB's future operation, Jia Qingguo, dean of the School of International Studies at Peking University, told the Global Times Monday.

Jia said China might use the powers only if the projects would seriously hurt China's interests or are not in keeping with the bank's objectives, adding that the possibility for such conditions is low.

After the signing of the AOA, the bank's senior management will be appointed before it starts operations.

The bank's headquarters will be located in Beijing, and its president will be selected through an open, transparent and merit-based process, according to the AOA.

The AIIB's future investments will focus on Asian infrastructure projects in the energy, power, transport and agricultural sectors that also meet environmentally friendly and energy-saving standards, Jin Liqun, secretary-general of the AIIB's interim multilateral secretariat, said at a forum held in Beijing over the weekend.

The Asian Development Bank said it believes Asia would need infrastructure investments worth over $8 trillion between 2010 and 2020.

"The AIIB will complement existing multilateral development banks to promote sustained and stable growth in Asia," Zhu said.

World Bank President Jim Yong Kim welcomed the signing of the AOA.

"More funding for infrastructure will help the poor, and we are pleased to be working with China and others to help the AIIB hit the ground running," he said in a statement on Monday.

- Song Shengxia contributed to this story

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The AIIB groundswell; Asian development to the fore

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The center of world economic gravity moving east as AIIB shows

Chinese President Xi Jinping (C, front) poses for a group photo with the delegates attending the signing ceremony for the Articles of Agreement of the Asian Infrastructure Investment Bank (AIIB) at the Great Hall of the People in Beijing June 29, 2015. [Photo/Agencies]

World Insight: http://english.cntv.cn/2015/06/30/VIDE1435616042104565.shtml
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Financial leaders of 57 states gathered in Beijing on June 29 to sign the agreement for establishing the Asian Infrastructure Investment Bank (AIIB), expected to become the region’s largest investment bank in the 21st century.

Seventy years ago, the World Bank was established, led by the US and its close western economic and political allies, as the first global financial institution. Along with the World Trade Organization and the International Monetary Fund, the western powers have commanded world financial and trade order for more than half a century. Even the Asian Development Bank (ADB), established 20 years later after the World Bank, has been largely controlled by Japan, backed by the US and other western economic powers.

China benefited from the global and regional development and financial institutions in the initial stage of economic reform and openness. As China expanded its economic strength it has aggressively contributed to financing them. However, despite its financial contribution to these institutions rising significantly China still has limited influence over management and operation.

China’s desire to influence world financial order and its inability to do so have been due to the governance structure of these institutions where China is not only a minority shareholder but its voting rights are marginalized.

Since the world financial crisis, triggered by the US subprime mortgage crisis and the EU’s debt problem, China’s relative importance in the world economy has risen rapidly. By 2010, it surpassed Japan to become the world’s second largest economy, and by 2012 it overtook the US to become the world largest trading nation as well as the largest producer and consumer of motor vehicles.

Apart from China’s second-to-none manufacturing capability, it holds the world’s largest foreign exchange reserves which have to be used effectively so they can generate a financial return and make appropriate contributions to infrastructural development in Asia, the largest and fastest growing region among all continents.

In addition, China, India, Russia and other initial AIIB member states have the financial strength and managerial confidence to create a new financial institution similar to the World Bank and ADB. For the initial $100 billion fund to be pledged, China has agreed to contribute 29.7 percent, India 8.3 percent, Russia 6.5 percent, Germany 4.4 percent and South Korea 3.75 percent. Other major contributors include the UK, Australia and Indonesia.

Both the US and Japan have not expressed their intention to join AIIB although many US political and economic allies have come to Beijing to sign the agreement, particularly the UK, Germany, France, Italy and Australia. The diversion of these countries' attention away from the US to China and Asia not only reflects ever rising business opportunities in Asia, but also the relative decline of the US-led western influence on the global economy and financial order.

The apparent shift of economic gravity from the West to the East reminds me of my personal experience in the past. Thirty year ago, I was awarded a World Bank scholarship from a university in Hainan to study in the UK in 1985. At that time, the salary of a Chinese university lecturer was less than 1 percent of his UK counterpart. Today, all the top Chinese universities are able to pay significantly more than the equivalent UK or US salaries to attract overseas talents to work in China. In addition, numerous university teachers in China can easily apply for more research funding than their western counterparts.

Although China is still a developing economy by definition, it has exceeded many western powers in a number of areas such as equipment manufacturing, high-speed railways, nuclear power, construction, infrastructure engineering and space technology. In 2014, Chinese scientists produced the second largest number of high-impact academic journal papers in the world.

China started the first high speed railway 30 years later than Europe, but by 2014, has built 16,000 km of high-speed tracks, twice as long as the total length of all the EU countries put together. BYD, one of China’s private auto makers, has marched to California to build electric buses for the local market.

India is racing to follow in China’s footsteps. Its economy was growing as fast as China in 2014 and is set to overtake China’s growth in 2015. However, India’s transportation systems are so poor that they are evident constraints on the country’s development. It is expected that India will require $1 trillion to improve its transportation systems, and the establishment of AIIB will be helpful to its development needs. Other Asian countries face similar problems of investment for roads, railways, airports, seaports, telecommunications and internet.

AIIB will become a potent propeller to accelerate economic and social development in Asia. Along with the Silk Road Fund and the Brics Bank, China will use AIIB to implement its “one- belt and one-road” regional and global development strategies.

The Silk Road Economic Belt and the 21st Century Sea Silk Road will cover more than 60 countries surrounding China, and many will benefit from China’s outward-looking investment and development strategies. Under Xi Jinping’s leadership, China has gained increased support from neighbouring countries in Asia and many others in Latin America, Europe and Africa, thanks to its persistent foreign policy of peaceful cooperation, mutual benefit and common prosperity.

The future operation of the AIIB may face many challenges and uncertainty, but the AIIB has signified the rapid emergence of China, India and other developing and transitional economies. The determination and confidence for success through the AIIB and other newly created financial institutions suggest that the world financial and political order will be different from now, as the overwhelming dominance of the World Bank and ADB in Asia and the world financial systems will inevitably decline in the future.

By Shujie Yao (chinadaily

The author is a professor of economics, Chongqing University and the University of Nottingham.

Through AIIB, China can learn to lead

Representatives of 57 prospective founding members of the Asian Infrastructure Investment Bank (AIIB) gathered in Beijing on Monday for the signing ceremony, with 50 of them endorsing the AIIB agreement. As the largest shareholder, China takes a 30.34 percent stake and correspondingly has a voting share of 26.06 percent, which actually enables China to wield a veto on major issues, such as electing the bank's president. This is a moment that our nation could never have imagined just 10 years ago.

The move forward in the AIIB, however, seemed to have no bearing on people's feeble confidence in China's stock market, as shares plunged amid a flurry of automatic sell orders on this remarkable day.

However, the country's fundamental confidence has been elevated to a new stage. This is the first time ever that China is leading an international multilateral bank. Its influence is prominent and far-reaching, and it carries more profound significance than successfully hosting an Olympic Games.

It took China less than six months to complete the signing of the AIIB agreement and this efficiency shocked the world. Although China barely has any experience in this regard, it is proof of its excellent capacity to learn and of its eager pursuit of fairness and equity. The first batch of 50 signatories is far more than the number of founding members of the Asian Development Bank (ADB).

China's attempt to lead the international financial institution may have been forced by unfair treatment in other institutions or China may want to test experiences with the AIIB as we are still a developing country. But from now on, we must shoulder our responsibilities.

Of these responsibilities, the foremost is to bear criticism as numerous Western observers are waiting to find faults with and go bearish about China. But regardless of what they say, China must stick to its current trajectory.

In recent years there have been fewer protests by China, but frequent ones against Beijing overseas. China needs to stick to its major principles, but it does not need to be entangled in minor issues.

US allies that have joined the AIIB do not mean to flatter China, but they see the benefits will outweigh their relations with Washington. With GDP at the $10-trillion level, can China build more platforms of common interest and convince the outside world that working with China always means a win? This serves as the key to China's further rise without encountering strong resistance from the outside.

Compared with the IMF, World Bank and the ADB, the AIIB indicates that the environment where China is rising may not be as terrible as we conceive. We must grasp the opportunities.

Source: Global Times Editorial

50 nations sign AIIB deals - China wields veto powers, enjoys 26% voting rights

China's role as the largest shareholder with significant voting rights in the Asian Infrastructure Investment Bank (AIIB) will make the country shoulder more responsibility in turning the bank into a high-quality financial institution to complement existing multilateral development banks, experts said Monday.

A total of 50 prospective founding members of the AIIB on Monday signed the bank's articles of agreement (AOA) in Beijing, which outlines the bank's objectives, operating principles, governance structure and decision-making mechanisms.

Seven members, including Denmark, Thailand and the Philippines, failed to sign the AOA on Monday. China's Ministry of Finance said they can sign the agreement anytime this year.

"The signing of the AOA is a milestone in the establishment of the bank," Vice Minister of Finance Zhu Guangyao told the Global Times Monday on the sidelines of a forum in Beijing.

The bank was proposed by President Xi Jinping in 2013 during his visit to Indonesia.

Xi said on Monday that China's development would not have been possible without Asia and the world.

"As China grows stronger, we are willing to make our due contribution to world development," he said.

Zhu said the AIIB's establishment process has outpaced other multilateral development banks, and its objectives have won support from members within and outside Asia.

"We hope AIIB members' legislatures will approve their AOA membership as soon as possible and get the bank's operations going by the end of the year," he added.

Voting shares

The AIIB will have an authorized capital of $100 billion, and Asian members are required to contribute up to 75 percent of the total capital, leaving the rest to non-Asian members, according to the AOA.

China is the bank's largest shareholder with a 30.34 percent stake. This gives China 26.06 percent of the voting shares, also the largest, within the multilateral financial institution.

"It is within expectations given China's huge economy, and it also means China needs to shoulder more responsibility in building the AIIB into a high-quality bank," Ruan Zongze, vice president of the China Institute of International Studies, told the Global Times Monday.

According to the AOA decision-making mechanism, China has effective veto powers over major decisions because it has voting shares of over 25 percent.

China does not seek veto powers in the AIIB, Vice Finance Minister Shi Yaobin told the Xinhua News Agency Monday. He said the country's stake and voting shares in the initial stage are natural results of current rules, and may be diluted as more members join.

"Being a major Asian economy, Japan's entry will dilute China's stake and voting shares more than any other country, but so far we have not seen such a sign," Ruan said.

He said he believes the AIIB is not likely to approve a large number of new members in its initial stage. Instead, it will focus on rolling out investment projects.

Owning veto powers does not mean that China will use these powers in AIIB's future operation, Jia Qingguo, dean of the School of International Studies at Peking University, told the Global Times Monday.

Jia said China might use the powers only if the projects would seriously hurt China's interests or are not in keeping with the bank's objectives, adding that the possibility for such conditions is low.

After the signing of the AOA, the bank's senior management will be appointed before it starts operations.

The bank's headquarters will be located in Beijing, and its president will be selected through an open, transparent and merit-based process, according to the AOA.

The AIIB's future investments will focus on Asian infrastructure projects in the energy, power, transport and agricultural sectors that also meet environmentally friendly and energy-saving standards, Jin Liqun, secretary-general of the AIIB's interim multilateral secretariat, said at a forum held in Beijing over the weekend.

The Asian Development Bank said it believes Asia would need infrastructure investments worth over $8 trillion between 2010 and 2020.

"The AIIB will complement existing multilateral development banks to promote sustained and stable growth in Asia," Zhu said.

World Bank President Jim Yong Kim welcomed the signing of the AOA.

"More funding for infrastructure will help the poor, and we are pleased to be working with China and others to help the AIIB hit the ground running," he said in a statement on Monday.

- Song Shengxia contributed to this story

Related posts:

The AIIB groundswell; Asian development to the fore

05 Apr 2015

Every single U.S. ally with the exception of Japan have all hopped on board the Asian Infrastructure Investment Bank, or AIIB. Italy and France were approved on Thursday to become founding members, bringing the total ...

Big boost for Asia with the Asian Insfrasture Investment Bank (AIIB) Launch, a positive step!

27 Oct 2014

Chinese President Xi Jinping's (C-R) meeting with the members of the Asian Infrastructure Investment Bank (AIIB) in the Great Hall of the People in Beijing, China 24 October 2014. 21 Asian countries are the founding ...

Service first, don't waste energy and resources in unproductive ways !

A photo taken from Facebook showing what the woman wore when she was denied entry to the Balik Pulau court complex.

The mission: service first

Malaysian taxpayers should be treated as customers who deserve the best service. Government departments should aim to keep their standards high and not fuss over how their customers are dressed.

TEACHERS are supposed to teach. And when members of the public visit the hospital, the Road Transport Department, or any government facility for that matter, they are there for a service, and they expect to be given that.

After all, as has been said many times before, the public service exists because the taxpayers are the ones who pay the salaries of the civil servants.

But things do become complicated when some individuals get side-tracked from their job specifications, and start to bring politics and religion into play.

The problem with some Malaysians is that we are also not very good at exercising reasonable discretion. Maybe we fear those who hold higher positions and dare not question their authority, as it is not part of our culture, or simply because of fear of reprisals.

So, if you are a security guard, whether a member of the People’s Volunteer Corp (Rela) or someone from a security firm, you would be expected to just carry out the orders made by the boss, or maybe the smaller bosses, which in most cases, can be more difficult than the real top boss.

Malaysians would know by now, judging from incidents in the past weeks, that it’s always these little guys who get the blame.

If you are being asked to wear a sarong over your skirt which is deemed too short, you will look quite unnatural, and are bound to draw strange looks from others. Wouldn’t the front desk officer enquire from you, in a puzzled manner, why you are wearing a skirt with a sarong on?

But if the officers are indifferent to the ­situation and the head of the front desk does not even bat an eyelid, it is obvious that they are fully aware of what the security guard has ordered the member of the public to do.

Maybe this has been going on for a while, except that no one has complained, and a recording of the event had not gone viral.

Since incidents of such a “humiliating” exercise have been reported, many others, including a former colleague, have shared their experiences on social media.

My ex-colleague took her case all the way up to the JPJ chief, who apologised for the unfortunate incident. But in her case, she has access to the boss because of her job.

I have been following the exchange of opinions on social media and, by now, we are well aware that we are also not very good at articulating or advocating our case well. Many of these views seem racially and religiously prejudiced and, as a result, a sense of reasonableness is lost.

Dress codes are not something unusual. Even casinos, as some have pointed out, have strict dressing codes before anyone can enter. But the question here is how these rules are reasonably enforced in our government departments?

In all fairness, checks by our reporters have shown that most government departments are reasonable and seem to totally ignore even their own dress codes. Their priority is to provide service and the people are served even if the skirt’s hemline is above the knee or they are wearing slippers.

We actually have photographs of inadequate­ly dressed men, including one in a pair of shorts and singlet, rushing into a JPJ office and were properly served.

As with all debate, there are those who argue whether micro mini-skirts and bikinis would be tolerated, which I think is stretching the argument too far. Anyone who wants to dress that way in public, not just in a govern­ment facility, will most likely be hauled up.

No sane person would go to any office, private or public, in a bikini, so such arguments are flawed and unreasonable.

The recent cases whereby the women were asked to wear the sarongs are certainly not in this category. Anyone with a fair and objective mind would surely agree that all the ladies were properly and decently dressed.

Then, there have been a number of cases brought to light recently of teachers who want to play moral guardians in schools.

One incident was when a teacher reportedly confiscated the little crucifix that a student was wearing. A police report was subsequently lodged.

But according to the latest report, the cross has since been returned to the student and the father has accepted an apology from the school principal and also withdrawn the report.

It has also been reported that pressure was exerted on the headmaster and school management board of St Mary Labuk in Sandakan to remove the cross from the new school building. But Deputy Education Minister Datuk Mary Yap stepped in and guaranteed that the cross would remain, saying it had been clearly stated that mission schools are allowed to upkeep the ethos and characteristics of these schools.

It seems to be a phenomenon of the past decade. We all know the crucifix has long been removed from classrooms in mission schools, because of an order from the then minister who is now in the opposition.

About the same time, the symbol of the crucifix was also taken out of mission school badges. The Latin mottos fortunately have remained and presumably no one understands what they mean.

Well, Malaysia’s problem, or rather the Little Napoleons’ problem, is that we seem to channel our energy in a very unproductive way. There is a lot of fire-fighting because these people think they can get away with anything, and only when it becomes an issue do they step back.

Teachers should be striving to make our students top in Maths and Science and be competent in the English language. Instead, in these core areas of education, we have continued to deteriorate further.

Our students are no longer gaining entry into Ivy League schools such as Harvard as we used to. Schools used to be able to boast of these achievements but these days, many of them get into the news for all the wrong reasons.

Even if we seem to be generating many students with a string of As in the public examinations, these premier universities are not that easily impressed.

Meanwhile, no one will deny that our government-run hospitals are providing good service to the people. We must commend our doctors and nurses who toil daily for the public, at wages that are far less to what their counterparts in the private hospitals can command.

But the people who run these hospitals must also focus on keeping the standards high, and even raise the bench mark. The least of their concerns should be to worry about how visitors are dressed.

Just like at the JPJ, surely worrying about the dressing of the public is not part of the JPJ mission statement.

Malaysian taxpayers should be treated as customers who deserve the best service. They should not be sent home, denied entry or asked to wear a sarong, simply because someone takes offence to how they dress.

Moderates, stand up

Before and after: Photos posted on Tan’s Facebook page showing her original attire (left) and the sarong she was asked to wear at the JPJ office.

IT is said that ignorance is bliss, but not necessarily so all the time. Most Malaysians must have been amused, rather than upset, over a recent Facebook posting that went viral and eventually caught the attention of a news portal.

It started with an angry customer, going by the name Mista Bob Faishah, posting on the Texas Chicken Malaysia Facebook page that the fast food chain obviously did not take into account religious sensitivities because the franchise’s brand dipping sauce is named “Church”.

“Dear TCM... Please do explain (yo)ur dipping sauce brand at Malaysia Franchises... Most of (yo)ur customers is a Muslim... AND Muslim didn’t not eat for food from ‘church’ brand,” he wrote. He also shared the image of said dipping sauce together with his post, the portal reported.

Soon, an equally outraged Facebook user, Halim Zainal, left a comment saying that Texas Chicken Malaysia should change the name on the packet as a sign of respect to its Muslim customers.

The angry person warned TCM that they would not be able to sustain their business if they were not sensitive to Muslims in the country.

The management of TCM had to patiently explain to the customer that the franchise’s “Church” brand dipping sauce was named after the founder and did not represent the Christian house of worship.

“Please be informed that the brand Texas Chicken was founded in San Antonio, Texas USA by our founder by the name of George W Church Sr — Church being his surname and the name of the brand Church’s Chicken.”

The Facebook post elaborated that the word “church” was not used in a religious context and that some of the dipping sauces were imported from the United States, where the food chain originates.

But it has ended well. The customer has now posted an apologetic comment: “Deepest from my heart that I want to ask apologized for my post (1 June). For that time I only want to inquiry regarding the brands of “church” brand. And after TCM do explain to my inquiry n I accepted that was the co brand from san Antonio, Texas.

“I hope with my apologized here can stop all the negtive things goes more bigger. That what can say I only just want to inquiry regarding that brands only..But for ur info, I stlll enjoy my meal with my favorite winglets from TCM!

“Once again..I’m apologized for my post before that I had removed because I don’t want that all people read n negtive thingking of my inquiries.”

Well, as we can see from the postings, the person’s command of the English language really leaves much to be desired.

That could have been one reason why he did not first check, via Google or other search engines, for information about this food chain and why its products are named as such.

Our English language proficiency, sad to say, has hit rock bottom and many of our Internet users are missing out a lot because they have such a poor command of the universal language.

He only associated the word “church” with religion, without being aware that it can also be the surname of many people. Christian Bale would be really worried if people stop going to watch his movies if such an association is made.

But let us keep this in perspective. We can all accept Mista Bob Faishah for sportingly admitting his mistake. We are sure he has no intention to create a controversy.

But another issue that we need to be concerned about, apart from poor English, is whether we are seeing a rise in religious conservatism where many modern-day practices that everyone in our plural society used to accept as a matter of course – from food to sports and entertainment – are being looked at from a different, and more radical, perspective.

Those who spew hate messages in the name of religion can always find a ready audience in those who are prepared to take what they say without question.

And this applies to all religions where such leaders thrive on those who are blissfully ignorant on the true nature of their faith.

Such an environment makes it easy for these people to create fears among the followers that they are constantly under threat. The bogeymen in flavour today include Christians, Jews, the LGBT community, liberal-minded people, etc.

Fortunately, we are still a country where people of different faiths can co-exist peacefully and in harmony with one another.

Faith is a matter of the heart and whatever the rabble-rousers may want to ferment, few will believe that just seeing the religious symbols of another faith will so easily shake their own beliefs.

Be that as it may, we need to also be on guard against the rise of extremism, especially when it comes quietly in every day situations.

The voices of moderation must be heard, and the silent majority cannot afford to be quiet if they value the kind of society we live in.

Why are so many Malaysians not surprised to read about the middle-aged “aunty” who was asked to wear a sarong before she could be served at a Road Transport Department office? The Rela guard felt her skirt, which was just above her knees, was too short and did not adhere to the dress code.

It may be a small matter to some, but it was good of Suzanna G L Tan to share her experience on Facebook by posting a photograph of herself outside the office, showing her attire for the public to judge.

“I had to go to JPJ personally to sign the transfer form for the car I sold. That in itself is already a pain,” Tan wrote.

“I go dressed like this. Indecent meh?” she asked in reference to her dressing in the photograph.

Tan said while she was at the counter to get a queue number, she was handed a sarong to wear “or they would not entertain me”.

The blame eventually fell on the Rela guard but none of the other officers at the JPJ office bothered to tell off the Rela guard for his over-reaction. They have kept silent over this demeaning exercise.

We used to be able to blame the little Napoleans for incidents like this but with the advent of social media, such actions can always be recorded for the public to judge.

And then we have our Malaysian gymnast Farah Ann Abdul Hadi, who has just won a gold medal at the Sea Games, being criticised for not covering up. But to be fair, there were many who came to defend her on Buletin TV3’s Facebook.

Instead of applauding her flawless performance, there seem to be those with perverted minds whose minds are focused elsewhere.

These people thrive on attention and their antics have a way of being magnified way beyond their actual influence.

But here’s the saddest part. Those who speak out for Farah Ann are the usual known personalities and non-governmental organisations while those we wish to hear from – including politicians from both sides of the divide who hold national level posts – are strangely quiet.

But we are glad that the Youth and Sports Minister Khairy Jamaluddin, who has to protect our athletes, spoke out.

“In gymnastics, Farah wowed the judges and brought home gold. In her deeds only the Almighty judges her. Not you. Leave our athletes alone,” wrote Khairy on his Twitter account.

By Wong Chun Wai on the beat

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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Mara in Aussie property scam

Top Malaysian government officials and a former politician were alleged to spend RM65 million of public funds to purchase an apartment block in Melbourne, Australia, overpaying by RM13.7 million to allow for kickbacks back home.


Australian newspaper The Age, which made the allegations in an exclusive report today, also claimed the involvement of Mara, a government investment agency, which purchased the property in 2013.

The Age's investigative report said that a group of Malaysian officials, using the Malaysian government's investment funds, bid up the price for the Melbourne apartment block from A$17.8 million (RM51.5 million) to A$22.5 million (RM65 million).

The extra $4.75 million (RM13.7 million) was then laundered out of Australia and allegedly paid as bribes in Malaysia.

"The Malaysian firms that received the alleged kickbacks are closely linked to a senior figure at the Malaysian government investment agency, Mara.

"Another figure involved is a senior Malaysian official and former politician with close links to a Malaysian cabinet minister," said the report.

Malaysiakini has e-mailed Rural and Regional Development Minister Mohd Shafie Apdal under whose watch Mara falls, Mara's director-general Ibrahim Ahmad and its deputy director-general Salmah Hayati Ghazali for their responses to the corruption allegations.

The student hostel apartment bought by Mara was called the Dudley International House apartment block, located at the suburb of Caulfield.

The Age said about 150 Australian creditors, including tradesman and builders, have been left out of pocket or are facing bankruptcy after a company linked to the deal collapsed.

Money-laundering hub

The same group of high-ranking Malaysians were implicated in a deal involving A$80 million (RM231 million) worth of Australian property, including office or apartment blocks in Swanston, Queen and Exhibition streets in Melbourne's CBD.

The newspaper said this was the first hard evidence of Australian property prices being inflated as real estate is used as a safe haven or money laundering hub by corrupt Malaysian government officials.

In May last year, Bernama reported that several Mara board directors and executives, headed by its chairperson Annuar Musa (photo) were in Melbourne to inspect two properties Mara had acquire, at a cost of about A$60 million, to house its students.

The 12-storey building at 746, Swanston Street, minutes away from the University of Melbourne and RMIT University, has 281 apartments, while the five-storey Dudley International House in the suburb of Caulfield, will accommodate 113 Mara students attending Monash University. The Swanston Street building was formerly a hostel for nurses.

Spokesman for the Mara group, Zainal Zol said Mara had more than 1,000 students in Australia with 309 based in melbourne and more than 500 in Sydney.

He said the visiting Mara leaders were pleased with the agency's property acquisitions here.

The Bernama report also said executives from UEM Sunrise Berhad, one of Malaysia's largest property developers and an arm of UEM Group Berhad, which is owned by Khazanah Nasional Berhad, were also in Melbourne to negotiate the development of two prime land parcels it had acquired in Melbourne's CBD, in LaTrobe Street and MacKenzie Street.

Led by UEM managing director, Izzaddin Idris, they met the Victorian State Planning Minister Matthew Guy, Melbourne Lord Mayor Robert Doyle and Malaysian-born Ken Ong, head of the Melbourne City Council planning committee, to brief them on the projects.

Mohd Rameez said he was confident that both apartment developments will go ahead, thus enhancing Malaysia's presence in Melbourne.

Malaysiakini has also e-mailed and texted Annuar who is also Umno supreme council member and BN Ketereh MP for his comments.

Sources: Malaysiakini, The Sun Daily, The Star/Asia News Network

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Fighting corruption must be serious !

We must separate the roles of the Attorney-General as legal advisor to the Government and Public Prosecutor who prosecutes cases in court.

IT has become fashionable for critics to express dissatisfaction every time the Auditor-General presents his report to Parliament. So when the second report this year was tabled on June 15, the reaction was generally expected.

But the reaction from Public Accounts Committee (PAC) Chairman Datuk Nur Jazlan Mohamed is particularly important. Nur Jazlan, who is also Ideas’ Council member this time, says that he is disappointed with the performance of many Government agencies because they have failed to improve.

He also said that not long ago he praised Government officials for showing improvements every time the Auditor-General’s report is published. But he felt compelled to retract that praise because this time it was particularly bad.

He went on to say that many of the problems originate from the attitude of civil servants. Apparently the quality of our civil servants has deteriorated, and they don’t even bother to read the rules.

When the PAC Chairman makes such a bold statement, you know that there is something really wrong in the way civil servants manage our money. It is ironic that the Prime Minister recently announced a bonus for our civil servants despite such abysmal indictment.

Under Nur Jazlan, the PAC has been doing a much better job in identifying weaknesses in Government machinery and in demanding accountability. In fact, thanks to the PAC, the public now knows about the risk posed by Pembinaan PFI Sdn Bhd, a Government-linked company that has one of the biggest liabilities among Malaysia’s GLCs. The company has been off the audit radar for almost 10 years, despite the large amount of debt that it has accumulated.

The work of bodies like the PAC is important in our push for better governance in the country. The issues the PAC looks into are not necessarily about corruption.

Their responsibility is wider, covering also problems such as leakages and failure to adhere to published policies and procedures.

Fighting corruption, on the other hand, is more commonly associated with the Malaysian Anti-Corruption Commission (MACC). I am still waiting to see if the MACC would act on a recent admission by Home Minister Datuk Seri Ahmad Zahid Hamidi that a Special Branch report found that around 80% of our border enforcement officers are involved in corruption.

Nevertheless, I am very aware that even if the MACC were to start an investigation, that is only half of the journey. The other half lies outside of the MACC’s jurisdiction, and that is the prosecution of corruption cases.

Our system is designed in such a way that the MACC, just like the police, can only investigate and not prosecute. Prosecution is the sole discretion of the Attorney-General, who doubles up as our Public Prosecutor.

I have no problem with the MACC not having the power to prosecute. In fact, I think it is right to keep prosecutorial powers away from the investigation agency. Back in 2012, we at Ideas looked into this issue and compared the experience of Indonesia and Hong Kong in fighting corruption.

We published the findings in July 2012 and concluded that it really does not matter whether or not the MACC has prosecution power. Instead, what is most important is the integrity of the judiciary and the Attorney-General’s office.

Any effort to improve the quality of MACC, therefore, will have to be accompanied by reform in both the judiciary and the Attorney-General’s Office. Focusing on the MACC alone is not sufficient.

If we want to see a more effective fight against corruption we must separate the roles of the Attorney-General as legal advisor to the Government and Public Prosecutor who prosecutes cases in court.

Let me justify that with a simple analogy using the case of the allegedly corrupt border enforcement officers.

Let’s say the MACC do investigate the allegation and find that the problem runs all the way up to Ministerial level.

The MACC then passes the files to the Attorney-General. How much confidence do we have that the Attorney-General will prosecute his friends in Cabinet?

It is obvious that as legal advisor to the Government, he is conflicted. How can he prosecute the very party he is supposed to advise?

There are actually many more proposals to improve the MACC that deserve public attention. If you are interested in this topic, I suggest you search for reports published by the Special Committee on Corruption now chaired by Tan Sri Abu Zahar Ujang. This bipartisan committee, whose membership consists of members of the Dewan Rakyat and Dewan Negara, regularly comes up with some very good ideas.

One of those ideas is for the MACC to be given independence in recruiting their own officers. This suggestion has been mooted since 2010 and it makes a lot of sense. To be truly independent, MACC cannot continue to be dependent on seconded staff from the Public Service Commission, because this creates a conflict of loyalty.

But unfortunately, this idea has not received the attention that it deserves from the Government. There are times when I ask myself if our Ministers are really serious in the fight against corruption. For if they are really serious, why are they ignoring sensible ideas coming from a committee whose membership is from among their own colleagues?

Don’t they realise that the longer they choose to do nothing, the more people will feel that they have things to hide?


By Wan Saiful Wan Jan, thinking liberally The Star

Wan Saiful Wan Jan is chief executive of the Institute for Democracy and Economic Affairs (www.ideas.org.my). The views expressed here are entirely the writer’s own.

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Dad's what all kids want?

Fathers have an impact – good or bad, intentional or otherwise – simply by what they do, and what they don’t.

TODAY is Father’s Day. There is no real significance to this date, other than the fact that it has become yet another day for commercial interests to make more money.

And so we are inundated with messages on what we should buy for our fathers – anything from a tie to a power drill is fine.

It is also interesting that many charity organisations have also got into the game, where you can give a donation on behalf of your father in support of various causes.

I won’t pour cold water on those who believe this day should be celebrated in such manner. Having been a father for nearly 30 years, I will say that a day’s celebrations can’t encapsulate the role of a father, which is both unique and challenging.

More so in our Asian culture where fathers tend to play second fiddle to mothers in a nurturing role, and may not have enough opportunities to exert their influence on the children.

But the reality is we, fathers, do have an impact – good or bad, intentional or otherwise – simply by what we do, and what we don’t.

I have written before in this column that the best times in my career were the six years, over two different stretches, that I spent at home as a full-time father.

I had a whale of a time, although my better half did find it tricky explaining to friends why she had to earn the bread and butter while I was gallivanting at home.

Without being tied down to an office routine, I had all the time in the world. During my first stint, when my sons were still quite young, we had plenty of fun activities. Among other things, I built them a playhouse, flew kites with them, and taught them to swim and to ride a bicycle.

On my second stint, when they were already in their pre-teens and had become more aware of the world around them, our conversations often revolved around the values of life.

Fathers, as you receive gifts on Father’s Day, I wonder if you have thought about what gifts you might give to your children in their formative years – gifts that money cannot buy.

Do you teach them how to make the right choices, rather than lay down a list of dos and don’ts?

Do you respect that they have a voice that needs to be heard, or do you exert authority simply because you are the father?

Do you imbue in them the fortitude to overcome obstacles in life, resisting the urge to always jump in and rescue them?

Do you affirm their dreams, or simply tell them to be practical and march to the beat of the world?

I have learnt that these lessons cannot be taught in a textbook format, and certainly not in one sitting.

Lessons in life are passed on over many conversations and through much time spent together.

If we are the kind of fathers who leave home before our children wake up and come home after they are asleep, or even when we are present with them, are not really listening, perhaps it’s time to take stock.

The world tries to make busy dads feel less guilty by highlighting the effectiveness of so-called quality time. But I believe there can be no quality time without time in quantity.

Fathers, full-time or not, are you prepared to leave everything aside when your child comes up to you, because you are the only person he or she can call “dad”? And will you show, through your words and actions, that such moments mean all the world to you? Happy Father’s Day.

By Sunday starters SOO Ewe Jin

Deputy executive editor Soo Ewe Jin urges every dad to listen to Cat in the Cradle, made famous in 1974 by Harry Chapin. The song is about a father who was too busy to spend time with his son, who eventually grew up just like him, a busy man who did not have time for his father. The views expressed are entirely the writer’s own.





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What household debt means and how to manage it ?

The difference between ‘healthy’ and ‘unhealthy’ loans

I have received queries about what household debt means and the best ways to manage it.

Household debt is basically all forms of loans with interest rates taken from entities that provide financing. The loans can be secured with assets such as real estate loans (housing and commercial properties), or without any collateral such as personal and credit card loans.

Residential and commercial property loans have capital appreciation potential over the long term. According to statistics from National Property Information Centre, the annual appreciation rate for house prices has averaged 9% in the past five years.

Even if we assume the average house prices only appreciate 5% per annum, it is still an ideal asset which we can live in, and at the same time it grows in value.

If you refer to the chart above, the effective interest rate for housing loans is only 4.65%, which is lower than its annual appreciation rate.

On the other hand, the effective interest rates for car loans range from 5% to 7.5% depending on car model and loan term (effective interest rates are calculated from the advertised headline rates of 2.5% to 3% depending on the tenure of the car loan).

On top of higher effective interest rates, the value of private vehicles depreciate about 10% to 20% per year based on car insurance calculations and accounting practice.

In fact, everyone knows that the day you drive the car out of the showroom, its value drops by 15% to 25%!

The effective interest rate for personal loans is 9% to 10%, while credit card effective interest rates can go as high as 18% to 24% (again, like car loans, the effective interest rates per year are much higher than the advertised rates).

If these loans are spent on items that do not appreciate over time and on perishable items, then the depreciation rates are high and there are no returns to speak of.

The real estate loans (housing and commercial properties) that will appreciate in the longer term, can be deemed as “good debt”.

Car, personal and credit card loans, which have higher interest rates repayment and do not generate value in the future, and are considered as “unhealthy debt” or “bad debt”.

The chart above illustrates the effective interest rates on different household debt components. It also reminds me about the household debt I shared in my last article. What does our nation’s household debt really mean to us? How much of it impacts us if we include its interest rate, appreciation and depreciation values?

According to Bank Negara, our household debt was at RM940.4bil or 87.9% of gross domestic product (GDP) as of end-2014.

Large burden

Residential housing loans accounted for 45.7% (RM429.7bil) of total debts, hire purchase at 16.6%, personal financing stood at 15.7%, non-residential loan was 7.7%, securities at 6.5%, followed by credit cards and other items at 3.9%.

Our household burden is larger if we include the servicing of incurred interest rate for loans. Much of it comes from the higher interest rates to service hire purchase, personal financing and credit card loans.

It reinforces my belief that if we take a debt to invest or secure appreciating items such as housing and other valuable assets, they will eventually provide a higher return in the longer term which more than compensates for the interest rate paid on the loans.

My belief is substantiated by Bank Negara’s Financial Stability and Payment Systems Report 2014.

The report states that properties remain an important investment for many households to finance children’s education, provide a form of financial security for the next generation and preparation for retirement.

Our government can help us achieve higher investment on housing and other valuable assets by looking at ways to reduce our dependency on other types of loans.

Reducing dependency

Example, to provide a comprehensive public transportation system by aggressively expanding mass rapid transit, buses, mini buses, and taxi service to cover more areas.

This will reduce the dependency on private vehicles which in turn help us to divert our financial resources to more fruitful areas or secure a roof over our heads.

As shared in my previous article, housing loans in advanced countries comprise an average of 74% of total household debt compared with ours at 45.7%.

This tells me that we, as a nation, are spending too much of our already high household debt (87.9% to GDP) on high interest/high depreciation “bad debt” such as a car, credit card and personal loan.

Now is a good time to relook into our debt portfolio and the interest rates incurred, and check whether we are having a healthy or unhealthy debt burden.

FIABCI Asia-Pacific Regional secretariat chairman Datuk Alan Tong has over 50 years of experience in property development. He is also the group chairman of Bukit Kiara Properties. For feedback, please email feedback@fiabci-asiapacific.com.

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