Archive for the ‘Economy & Business’ Category

Proton cannot afford to hold on to its controlling stake

November 21, 2007

We have said it many times and we want to say it again: Proton must merge with other giant carmaker and allow the giant to hold a controlling stake. That’s the way to go and the Government should stop wasting time and money to allow Proton to struggle on its own because it’s destined to fail in the face of the global challenges.

PM Abdullah must not drag his feet on this failed project for too long. He must stop the costly financial bleeding before it’s too late. It’s silly for him to think that any giant carmaker would want to partner with an ailing brand like Proton without the controlling stake.

No deal between Proton and Volkswagen
Nov 20, 07 10:17am Malaysiakini

The government and Volkswagen said today they had shelved long-running talks about an alliance between the German firm and Malaysia’s national carmaker Proton.

Malaysia’s state investment arm Khazanah Nasional, which controls Proton, said it had discontinued negotiations with Volkswagen.

The German carmaker also said in a statement it and the Malaysian government had for the time being decided “to shelve their joint talks” about the alliance.

The talks began in October 2004 aiming to revitalise Proton, which experts say has suffered from stiff competition, a lack of new models and a reputation for poor quality.

Khazanah said it had also ended talks with General Motors. The government had earlier said it would turn to the US auto giant if talks with Volkswagen failed.

An improvement in Proton’s domestic sales and exports had led to the decision to halt negotiations, the state investment arm said in its statement.

“The government is therefore of the view that Proton’s management should be allowed to continue with its plans to further strengthen the company,” it said.

But it also left the door ajar for a future tie-up, saying a strategic alliance could be considered at a later date.

“Talks with Volkswagen have not broken down. They may have discussions later on,” a senior finance ministry official, who wished to remain anonymous, told AFP.

“For the time being, Proton will not enter into any pact with any car manufacturer. The government has decided that Proton will be managed by itself,” the official said.

Proton has suffered a sharp decline in market share and been hit by losses, including a 46.75-million-ringgit loss over the three months to June.

New models ‘mostly rebadged versions’

A deal was expected to boost Proton’s efforts to reclaim top spot in Malaysia and gain a foothold in the lucrative European market.

But such partnerships were hard to forge because of the government’s reluctance to cede control of a key national company to foreign hands, analysts said.

“We can only speculate but management control and the shareholding structure was probably the main issue. The talks have really dragged on,” Kurnia Insurans chief investment officer Pankaj Kumar told AFP.

“Proton cars have been selling well locally for the last few months but at the end of the day, Proton has to be competitive globally,” he said.

“I don’t think it has been that innovative. The new models are mostly re-badged versions of previous models,” he added.

A Volkswagen spokesman said in Frankfurt that the group was now looking for “new commitments” in Southeast Asia.

“The company continues to pursue the goal of developing a successful foundation for production and distribution in Southeast Asia for years to come,” the firm said.



Petronas: Malaysia a net importer after 2010

June 28, 2007
The good news: Petronas hit record-high profit of RM46 billion ( previous year RM43 billion).The bad news: Malaysia becomes a net importer of petroleum after 2010.

That’s why I always say that we are living in a “grace period”. When we have no more extra oil and gas for export, that will be the day all Malaysians have to face the real test collectively.

When the Umno-led BN Government cannot depend on the money from Petronas anymore, will they still able to run this country? I have serious doubts.

Petronas hits record-high profit of RM46 bil

Jun 28, 07 5:12am Malaysiakini
Petronas announced today another record net profit for the financial year to March due to higher sales volume and strong crude oil prices.The national oil company posted a net profit of RM46.4 billion against RM43.1 billion a year ago, with revenue up 10 percent to RM184.1 billion.

Hassan Merican, Petronas chief executive officer, said the company reported a record performance despite a challenging environment.

“The year has been a tough one for the industry … However, we managed to swim against the tide,” he told reporters at a briefing.

“Our results are on par, if not better than some of the other major oil companies,” Hassan said.

Oil prices remained high underpinned by global demand, particularly from China and India, but this was offset by supply disruptions in Alaska and Nigeria and geopolitical tensions in the Middle East, he said.

Operating costs increased, often out of proportion with the crude price gain, he said, adding that Petronas had had to defer or even scrap some projects.

Refined petroleum products was the top revenue generator at RM62.7 billion on volume of 215.9 million barrels, followed by crude oil sales worth RM45.4 billion from 192.4 million barrels.

Liquefied natural gas continued to be the third largest contributor with RM28.9 billion on volume of 24.1 million tonnes.

Hassan said Petronas’ international operations and exports from Malaysia grew RM10.9 billion during the year to RM141 billion or almost 77 percent of total revenue.

Petronas’ total oil production rose to 1.710 million barrels a day from 1.596 million bpd the year before, with higher output from the international operations offsetting a slight decline on the domestic side.

Net importer of oil in 2010

Hassan said Petronas secured four new production sharing contracts and won six new contracts abroad. The company now has 58 ventures in 22 countries.

Petronas invested RM21.6 billion in fiscal year 2007 and Hassan said capital expenditure for 2008 will be higher.

“Given the escalating cost environment, how can it be less?” he said.

He did not give an outlook for 2008 except to say that the biggest challenge facing the oil and gas industry is the shortage of skilled personnel.

Hassan also said Malaysia will become a net importer of crude oil by 2010 if domestic demand growth maintains an annual rate of 4.0 percent.

“If petroleum product demand in Malaysia continues to grow at four percent per annum, the country will not be able to export its production like it used to today, meaning that petroleum product demand will exceed domestic crude production,” he said.

“It doesn’t mean that we stop producing in 2010. We still continue to produce at the same level but product demand will grow ahead of domestic crude production.”

Proton-VW Negotiation: Najib throws a spanner

June 21, 2007
It is very wrong for Najib to openly declare that the Government would not give up its controlling stakes in Proton. As the No.2 in the country, he should know that this country cannot afford to shoulder the huge burden anymore longer and the need for Proton to team up with a world-class carmaker like VW, even if it means to allow the giant to control and lead the ailing national carmaker. We cannot afford the financial bleeding any longer. We need a reputable carmaker to help turning Proton around.That’s the way to go if we are serious about the long-term survival and healthy growth for Proton. Najib must have the interest of all workers and engineers serving the national car project all these years. All of them will lose their jobs and livelihood if Proton goes bust ( losses in 2006 alone was RM591 million).

Talks to find Proton partner going well

Jun 21, 07 10:26am Malaysiakini
Talks to find a foreign partner for ailing national carmaker Proton are going well, state media quoted Prime Minister Abdullah Ahmad Badawi as saying on Wednesday.“For now, the talks are proceeding smoothly and there seem to be no obstacles in the way,” Bernama news agency quoted him as saying in a written reply to an opposition member of parliament.

Officials said Sunday that Proton and German auto giant Volkswagen AG were cautiously edging towards a partnership after a second round of talks in Thailand, following initial negotiations in New York earlier this month.

“Negotiations between Proton and Volkswagen are ongoing,” said Ahmad Shahizam, spokesperson with the government’s investment arm, Khazanah Nasional. He declined to elaborate further.

Khazanah Nasional is the controlling shareholder in Proton, with a 42.74 percent stake. State pension fund EPF and national oil firm Petronas own 12.07 percent and 8.84 percent respectively.

The remaining 36.35 percent is held by a mix of local and foreign companies.

Commercially viable

Another official familiar with the talks said negotiations were centred on “working out a solution to allow Proton to have a strong foreign partner.”

“The government is open to all positions. The idea is to make Proton a commercially viable company,” the source told AFP on condition of anonymity.

“I suppose there will be several more rounds of discussions between the two parties. There is momentum set in place to form a partnership,” the official added.

Asked if Volkswagen would be allowed to hold a majority stake in Proton, the official said: “That could happen. Nothing should be ruled out. Volkswagen could have a majority stake in Proton.”

In the past, analysts have partly attributed difficulties in forging partnerships to the government’s reluctance to cede control of a key national company to foreign hands.

Malaysia’s government is under intense pressure to announce details of a partnership for Proton in a bid to provide it with expertise to stem a sharp decline in market share and cut financial losses.

Proton last year lost its status as Malaysia’s biggest-selling automaker to homegrown rival Perodua, and recently reported larger than expected net losses of 591.36 million ringgit (174 million dollars) for the year to March 2007.


Keep Proton alive by selling it to a reputable carmaker

June 19, 2007
For the record, I am one of those who believes that a national car project in a small country (also means small market) would not succeed. I for one has been calling the government to merge or sell out stakes to bigger carmakers for long term interest.

Malaysians cannot afford to “save” Proton from going bust forever. The financial burden is too huge for us to shoulder. We must stop the bleeding of national resources before it’s too late.

Now that VW of Germany is interested to take over, we should let it happen to keep Proton kicking and alive. Efforts must be make to ensure the huge number of workers and engineers working for Proton directly and indirectly could still keep their jobs. The only way out is to allow a reputable carmaker like VW to take over. No way a reputable carmaker would take up a minority share in an ailing company like Proton. Only with a leading role and control could VW turn the company around.

VW could take advantage of the existing capabilities of Proton to make inroads in the ASEAN market. It’s possible to strike a win-win deal for both Proton and VW.

VW has made it big in its joint venture with Chinese carmakers in Shanghai and other parts of China. They too could succees in Malaysia and ASEAN with the right models and expertise.

Proton, VW edge towards partnership

Jun 18, 07 11:52am Malaysiakini
National carmaker Proton and German auto giant Volkswagen AG are cautiously edging towards a partnership after a second round of talks in Thailand, officials said on Sunday.“Negotiations between Proton and Volkswagen are ongoing,” said Ahmad Shahizam, spokesperson with the government’s investment arm, Khazanah Nasional. He declined to elaborate further.The first round of talks was held in New York two weeks ago and the second round was held last week in neighbouring Thailand’s capital, Bangkok.

Khazanah Nasional is the controlling shareholder in Proton, with a 42.74 percent stake in the company. State pension fund EPF and national oil firm Petronas own 12.07 percent and 8.84 percent respectively.

The remaining 36.35 percent is held by a mix of local and foreign companies.

Another official familiar with the talks said negotiations were centred on “working out a solution to allow Proton to have a strong foreign partner.”

“The government is open to all positions. The idea is to make Proton a commercially viable company,” the source told AFP on condition of anonymity.

“I suppose there will be several more rounds of discussions between the two parties. There is momentum set in place to form a partnership,” the official added.

The Malaysian team comprises officials from the prime minister’s department, ministry of finance and Khazanah.

Asked if Volkswagen would be allowed to hold a majority stake in Proton, the official said: “That could happen. Nothing should be ruled out. Volkswagen could have a majority stake in Proton.”

A business concern

The Star newspaper Saturday reported that Volkswagen had indicated that “Proton should be run as a business concern, meaning that everything had to be evaluated from the quality, efficiency and commercial standpoint.”

In the past, analysts have partly attributed difficulties in forging partnerships over the government’s reluctance to cede control of a key national company to foreign hands.

Malaysia’s government is under intense pressure to announce details of a partnership for Proton in a bid to provide it with expertise to stem a sharp decline in market share and cut financial losses.

The loss-making company last year lost its status as Malaysia’s biggest-selling automaker to homegrown rival Perodua.

A previous attempt at forging a deal with Volkswagen broke down in January 2006 after Proton rejected what it said were “inappropriate” plans by the German carmaker to exert control over the Malaysian firm.

Proton recently reported larger than expected net losses of RM591.36 million for the year to March 2007.

The carmaker blamed weak sales and higher production costs for a reversal from the previous year’s profit of RM46.69 million.


MAS made RM132.71 million in first quarter of 2007

May 31, 2007
Congratulations to Idris Jala and his team for achieving what they were trusted to do with flying colours. But I have similar questions to ask MAS. Malaysians have the right to know the full facts and figures as suggested by “High-Flying Truth” . Others GLCs may also want to know and learn from Idris Jala and his team on how to turnaround an ailling GLC.

We just want to be sure, the good news is not a by-product of ‘creative  accounting’ but truely a good news.    

MAS profits: Full facts and figures please

High-Flying Truth
May 30, 07 2:19pm
I refer to the malaysiakini report RM132.71 million: MAS’ Q1 profit report on MAS’ turnaround plans and its encouraging profits. While congratulations are definitely in order for MAS MD Idris Jala and his men and women, I would still hold my final adulation until I am given all the facts first.For instance, how much of the increase in revenue and profit is still attributable to subsidies and reimbursements coming from parent company PMB ( Penerbanagan Malaysia Berhad)? Talking about PMB, what has happened to it? Is it still functioning or has it been moth-balled?I still want to know if interest and leasing costs are being subsidised by taxpayers via PMB as well how much of the domestic sector losses are being absorbed by PMB if any.

It has also been reported that the cost of the VSS (Voluntary Separation Scheme or whatever they call them) has been subsidised by government. How much has this has affected the bottom line of MAS for this year and for the years to come?

Its all right to have press conference and announce glowing numbers but public must also have all the relevant facts before we can decide whether the turnaround plan is working.

I am sure the new team has done well, better then the previous one but let’s have all the facts please. Now they want to go frolicking in the low cost airlines business. Just how much is this going to cost the taxpayer yet again?

Westports questionable land deal: Chan Kong Choy must explain

May 29, 2007
Is buying land with public fund at a price more than double  the market value a crime?

Transport Minister Chan Kong Choy must explain. Others who must also explain incl former Transport Minister Ling Liong Sik, the two former PKA chairman Ting Chew Beh and Yap Pian Hon and Umno Sementa state assemblyman Rahman Palil and Westports chairman Gnalingam.


■日期/May 28, 2007   ■时间/08:10:43 pm
■新闻/家国风云   ■作者/merdekareview 陈慧思
【本刊陈慧思撰述】自2006年投入运作迄今,雪兰莪州巴生的马来西亚西港私人有限公司(Westports Malaysia Sdn. Bhd,简称“西港公司”)负债近马币十亿元。在该公司执行主席贾纳林甘忙于解释欠债原由之际,一笔高达马币18亿元的购地支出,仍有待西港、前交通部长林良实、港务局及反贪污局予以人民一个明确的交待。民主行动党非政府组织局主任刘天球(左图)曾在2004年就西港的一项土地交易向皇家警察的商业罪案调查组报案,质疑这宗交易是否牵涉贪污及失信问题。可是迄今,反贪污局仍没有任何交待及相应行动;当时的交通部长林良实也不曾回应此事。刘天球接受《独立新闻在线》电访时透露,当林良实于2003年退任之后,他查悉林任期内曾批准交通部属下的港务局(Part Klang Authority)以马币十亿元购买一幅一千亩的土地,发展巴生港口自由贸易区(Port Klang Free Zone)。当时,刘天球的报案书指出,上述土地交易数额高达马币十亿元,平均每英亩100万元,每平方公尺约马币25元,比市价高出44%。为此他质疑,此项交易是否牵涉贪污问题。刘天球指出:“我曾向地产界人士了解,他们认为,当时西港的土地市价约每平方公尺14元。换言之,港务局收购的价格比市价高出了44%!”




刘天球从《海峡时报》的财经新闻获知,该占地一千亩的土地以马币18亿1000万元成交,比当时他从《太阳报》(The Sun)所获知的数额还要高出8亿元;为此,原拟就西港的债务问题报案的他说:“我更有理由报案了!”

《独立新闻在线》发现,若以一千英亩18亿1000万元计算,该地段的价格高达每平方公尺41元55分,比市价高出两倍!根据《海峡时报》报道,国家稽查局甚至形容该土地是“以特别价格计算”(calculated on a special-value basis)。

此外,《海峡时报》的报道指出,巴生港务局是从一家名叫“Kuala Dimensi”的公司手中购入该片土地。根据公司注册资料,Kuala Dimensi私人有限公司四名董事当中的两名董事都是国阵领袖,其一为国阵民进党民都鲁区国会议员张庆信,另一名则是自2004年出任巫统总财政阿都阿欣(Abdul Azim Mohd Zabidi)。






交通部署下的巴生港务局是巴生北港和西港的管理机构,惟港务局已将位于美丽岛(Pulau Indah)的西港的操作和营运部份已经私营化。西港公司目前以特许经营者的身份负责西港的操作和营运。



此外,《马来西亚前锋报》(Utusan Malaysia)新闻网今年5月15日的一则报道揭露,西港公司欠下港务局十亿元的债务,相信正在寻求新加坡港务局(Port of Singapore Authority)的“协助”,以解决该公司的债务问题。

西港公司执行主席贾纳林甘(G. Gnanalingam,右图)最近与新加坡港务局执行主席Eddie Tan的会面,被视为西港或转手新港务局的先兆。



他说:“还没有缴还给巴生港务局的余额不属于贷款,却是可以在30年被清还的租约(perjanjian penyewaan)。因此,西港没有面对财务问题。”他指出,在过去的五年中,该公司大部份的发展皆由内部基金及出租公司器材支撑。

根据公司注册资料,西港控股(Westports Holding)是西港公司的大股东;西港公司董事贾纳林甘通过Redzai建筑公司(Syarikat Pembinaan Redzai)掌握西港控股的50%股份、香港首富李嘉诚则透过Hutchinson港口码头(Hutchinson Ports Terminal)掌握30%股份、国库控股(Khazanah Holdings Bhd)则拥有10%股份。

Congratulations! Yang Mulia Raja Petra

May 18, 2007

Top 20 Asian progressives

Who are the modernisers and reformers steering the region towards good business practice, transparency and management excellence?

Michael Backman
World Business

Other publications list Asia’s most influential, or its most powerful or richest, but World Business is more forward-looking than that. We have spotlighted the individuals driving Asia forward – those that are helping to bring about rules-based civil societies, or who are advancing the cause of better governance, be it in business or government. One of the greatest guarantees of freedom is the free-flow of information, debate and commentary, and so our list includes several who are integral to promoting debate where governments of the region seek to restrict it. Included are several prominent bloggers who risk their livelihoods to bring to the people of Asia commentary and opinion that is a matter of course in the West.

We have included some of the region’s prominent businesspeople, notable not only for their forward-looking approach but also for their philanthropy, which remains essential in Asia where governments for the most part lack sufficient resources to do all that should be done to take care of society’s most vulnerable. And there are some prominent legislators: Asia is home to some of the world’s most repressive regimes, but others, such as Vietnam’s current leadership, have shown a preparedness to ditch ideology in favour of improving their people’s welfare.

Some of the names will invite controversy: as administrator of Tibet, Hu Jintao was responsible for a crackdown in 1989 that saw hundreds of Tibetan protestors killed; Malaysia’s former prime minister Mahathir Mohamad did not use his period of power to introduce greater transparency in government tendering or stamp out corruption in Malaysia’s police force; and Pushpa Kamal Dahal, better known as Prachanda, leader of the Maoists in Nepal, led a bloody decade-long war against the Nepalese government. But it is our contention that these individuals are now helping to reform Asia, so that in future the region’s citizens will enjoy greater freedoms than in the past.


Hu Jintao is the eighth General Secretary of the Communist Party of China, and China’s paramount leader and president. The general rule of thumb has become that each new Chinese leader is less hard-line than the last and Hu bears this out. He succeeded Jiang Zemin in 2002 and to date has shown himself to be cosmopolitan, worldly and technocratic. He speaks relatively unaccented Mandarin, unlike most of his predecessors, underlining his urbane image.

Hu rose through China’s construction ministry, became involved in the Communist party and was introduced to a series of mentors who recognised his talent. He was appointed party chief of the Tibet Autonomous Region in 1988, where he took a hard-line politically, instigating a crackdown in 1989 that saw the deaths of several hundred Tibetan activists. But at the same time, he liberalised cultural activities. This apparently paradoxical approach sums up his style: protect the Chinese state at all costs, but increase personal freedoms.

Since becoming president, one of Hu’s priorities has been the development of China’s poorer inner provinces to ensure a better distribution of the country’s economic advancement. Transparency in government decision-making has also increased – China’s news agency now publishes Politburo standing committee meeting details, and foreign journalists enjoy unprecedented access. Emphasis on GDP growth has lessened; instead, there is more concern with the quality of growth.

China’s foreign policy, particularly its cultivation of links with African and South American states, illustrates that under Hu, China is becoming more of a commercial player on the world stage and less of a political strategist for its own sake.


Though more robust than that of Singapore, Malaysia’s media is nonetheless tame. All significant media outlets are sympathetic to the government, there is little investigative journalism and discussion of many issues is discouraged. The newspapers focus endlessly on crime and lifestyle issues, and Malaysians tend to buy them for their job ads and to find out what’s showing at the cinema. Increasingly, the serious reporting and commentary is done by bloggers, of which Raja Petra Kamarudin’s is the best.

Petra, a nephew of a former king of Malaysia, founded Malaysia-today in 2004 and works on it full time. The site now gets an astonishing 1.8 million hits on an average day, making it much more popular than any Malaysian newspaper. Malaysia-today plays an enormously important role in its attempts to keep the government accountable. It reports on ministers’ many business interests, nepotism and just about anything else that the government would prefer to keep quiet. Petra uses the site to denounce money politics, corruption and Malaysia’s endless fascination with race and race-based politics. A popular, ongoing series is the Khairy Chronicles, which provides an account of the doings of the prime minister’s young, unelected, but highly influential son-in-law.

Many reports have been made against Petra to the police, agents from Malaysia’s Special Branch have questioned him on several occasions and his computers have been seized. Recently, he reported how the government intended to use a nominee company to borrow $50 billion, in order to avoid recording the loan as government borrowing. He has also reported on a particularly grisly murder that appeared to implicate senior government figures.


Lou Jiwei has been appointed to head the investment agency that will manage $200 billion of China’s $1 trillion in foreign exchange reserves, which have accrued from inwards foreign investment and export earnings. Finance minister Jin Renqing said in March that the new agency will use “international best practices” and that “we will try to maximise profits and returns on our management of foreign exchange, guided by the principles of safety and risk management”. The agency will model itself on the Singapore government’s Temasek Holdings, but will be twice its size.

Educated and cosmopolitan, Lou’s reputation as a moderniser precedes his appointment to the agency. He has been at the forefront of reforming China’s economy for more than two decades and is a well-regarded technocrat. He spearheaded the reform of China’s financial services industry during his seven-year term as vice-minister of finance. A protege of the reformist premier Zhu Rongji, Lou was pivotal in redesigning China’s tax system and drawing up plans for a domestic bond market as the deputy head of the Shanghai Commission for Economic Regulation.

A computer programmer turned economist, he has always been a low-key policy specialist and perhaps represents the best hope for China’s troubled Communist party. As the party’s devotion to Marxist and Maoist ideology has waned, talent in running China’s increasingly sophisticated economy has become more important. Unlike many of his colleagues, Lou did not join the rallies in Shanghai’s People’s Park in 1989 in support of the Tiananmen Square demonstrations. He prefers to use more official channels and consequently has been one of China’s most effective reformers.


Narayana Murthy founded global consulting and IT services giant Infosys Technologies in 1981. He and a handful of other software engineers, who saw IT outsourcing’s potential, have almost single-handedly changed how the world thinks about India. In the space of one generation, the popular perception has changed from one of chronic poverty and over-population to one of technical sophistication and a country on the move. Of course, the reality lies somewhere in between, but this change in perception has been more important within India than outside, giving Indians a new confidence. Importantly, it has shown that India can compete on the world economic stage in a sector not assisted by government or hidden behind tariffs.

Murthy served as Infosys chairman for 20 years until 2002, and as executive chairman of the board and chief mentor from 2002 to 2006. The company expects revenues of more than $3 billion this year. He has been prominent in the fight in India for better corporate governance and was appointed chairman of the Securities & Exchange Board of India’s Committee on Corporate Governance in 2003,

He is a member of the advisory board of Harvard Business School’s Corporate Governance initiative. He is also on the board of directors of INSEAD and is an independent director of DBS, Singapore’s largest bank. In March, he became chairman of the Asia Business Council, and he joins Unilever’s board this month as a non-executive director. He has been the recipient of numerous awards and honours, and in December 2005 was voted the seventh most admired CEO/chairman in a global study by the Economist Intelligence Unit. In March, he denied that he was interested in running for the presidency of India.


Nguyen Tan Dung was appointed prime minister of Vietnam in June 2006 after the retirement of his predecessor, Phan Van Khai. At 57, he is the first Vietnamese communist leader to be born after the August Revolution in 1945 and is Vietnam’s youngest prime minister. Like Khai, he is a reformer and a moderniser; he was appointed to carry on the economic reforms that have seen the economy grow at about 7% a year and permitted the country’s admission to the WTO in 2006.

Dung is a technocrat and is economically literate, but he is not the only moderniser in the government. Nguyen Minh Triet, who was appointed president when Dung was appointed prime minister, is also a reformer. And the third member of the power triumvirate, communist party chief Nong Duc Manh, is another keen moderniser with a strong preference for privatising state-owned assets.

Dung was appointed one of five deputy prime ministers in 1997; a year later he was also made governor of Vietnam’s central bank, the State Bank of Vietnam, where he pushed forward monetary reform and bank mergers, thus giving the country’s financial system a more stable foundation. On becoming prime minister, he nominated fighting corruption and developing the Vietnamese economy in a sustainable way as two of his priorities. On one of his first overseas trips as prime minister, Dung met the Pope at the Vatican in January, the first Vietnamese leader to do so.

Dung is overseeing Vietnam’s progress from a communist state to a more market-oriented country that is an active and mature participant on the world stage. He is firmly committed to carrying on the legacy of his recent predecessors – that of further openness and economic freedom.


Born in 1940, Muhammad Yunus is the founder of Grameen Bank, which provides micro-credit loans to poor, would-be entrepreneurs who would otherwise be denied credit by the formal banking system. For his efforts, he and the bank were jointly awarded the Nobel Peace Prize in 2006. Yunus is also the recipient of the Ramon Magsaysay Award, the World Food Prize and the Sydney Peace Prize.

Yunus graduated in economics from Dhaka University, later obtaining a PhD in economics from Vanderbilt University. He first became interested in what later became known as micro-credit during the 1974 Bangladesh famine. His first loan – from his own pocket – was for $27 to a woman who made bamboo furniture. He soon realised that very small loans could make a big difference to poor people who want to start or expand a small business.

In 1976, the Grameen Bank started to make loans to poor Bangladeshis. It has since lent more than $5.1 billion to 5.3 million borrowers. More than 96% of loans are to women: they are more impoverished and have also proven to be more diligent repayers than men. Repayment is encouraged by lending to informal groups whose members act as co-guarantors. The success of the Grameen model has inspired similar efforts throughout the developing world and there are now micro-credit institutions in more than 23 countries.

Yunus announced in February that public pressure to intervene in Bangladesh’s violent and complex political arena had forced his decision to set up a new political party. The country has been ruled by a military-backed administration since 11 January, when the president declared a state of emergency and cancelled parliamentary elections.


Mahathir Mohamad, Malaysia’s prime minister from 1981 to 2003, was perhaps Asia’s most misunderstood leader. Mahathir had plenty of critics, but the country’s impressive development under his stewardship is undeniable. Also undeniable is his popularity among Malaysia’s minority ethnic groups, particularly the Chinese, who comprise about 30% of the population. Mahathir managed to persuade different ethnic groups to think of themselves as Malaysians, despite economic and education policies that favoured the majority Malay population at the expense of the commercially successful Chinese minority.

These policies helped to break the nexus between great wealth and (Chinese) ethnicity, thus making the Chinese less of a target politically in the event of unrest. Mahathir also kept a lid on Islamic fundamentalism, showing not just Malaysia but much of the Islamic world that economic progress and Islam can go hand in hand. Under Mahathir, the media and the judiciary lacked independence, but Malaysians enjoy far more political freedoms than the citizens of neighbouring Singapore.

Mahathir resigned as prime minister while still popular and at a time of his choosing. In retirement, he has emerged as a loud critic of the new administration, bringing to Malaysia a level of public debate that few would have thought possible. His regular interventions on policy issues have almost given Malaysia the strong opposition voice that it has not previously had.

He has attacked the government for not doing enough to tackle the widespread corruption, and has criticised the concessions given to foreign firms that invest in an economic zone in southern Malaysia. Even out of office, Mahathir continues to modernise his country.


Sir Li Ka Shing has broken the mould. When most ethnic Chinese become big in business, it usually means they simply become even bigger traders of goods. But not Li. An immigrant from mainland China, he had his start making and selling plastic flowers. As he became more successful, he moved increasingly into providing services, albeit with infrastructure development – specifically, providing port services in Hong Kong, mainland China, India and elsewhere, and more recently becoming a worldwide force in telecommunications services.

By moving beyond the old cultural stereotype, Li has transformed his group of companies into one of Asia’s first home-grown genuine multinationals. He is admired around the world rather than merely in Hong Kong as an astute investor, and along the way has made himself the world’s ninth richest individual, with an estimated fortune of $23 billion. But he does not lead an extravagant lifestyle: the main indicator of his wealth and status is that he’s rarely seen without a large contingent of bodyguards.

Cheung Kong Holdings emerged in the early 1970s; today, the group operates in 54 countries and employs 220,000 people. In 1979, Li acquired Hutchison Whampoa, which became the vehicle for his electricity generation, ports and telecommunications interests. Li was an early investor in telecoms group Orange, before selling out to Germany’s Mannesmann Group in 2001 for a profit of more than $15 billion. In January 2007 Hutchison agreed to sell its 67% stake in Indian mobile phone operator Hutchison Essar to Vodafone for $9 billion.

Li has established the Li Ka Shing Foundation for charitable works and is a major donor to education and healthcare – he is believed to have given away more than $1 billion to date.


Jaime Augusto Zobel de Ayala is the head of the influential Ayala Group, one of the Philippines’ biggest business groups. Zobel studied economics at Harvard and has an MBA from Harvard. He is an intellectual, has a truly global outlook and is a strong promoter of the principles of corporate governance in a country that sorely needs them.

Ayala has interests in real estate, water supply, automobile distribution, banking and food production, and has a reputation for being prudent and conservative. Zobel serves as chairman of the family holding company, Ayala Corporation, the group’s mobile telephone operator Globe Telecom and the Bank of the Philippine Islands. He is also co-vice chairman of the Ayala Foundation, a leading corporate donor in the Philippines. The foundation has a US-based arm that encourages Filipinos to contribute to social development programmes in the Philippines.

The family’s sound management practice is exemplary by Asian standards. It does not have private business interests that run parallel with its listed companies, and so it is free of the conflicts of interests that bedevil many Asian family-controlled conglomerates. All Ayala businesses are listed or belong to a parent company that is.

The family is of Spanish descent, but under Zobel it has moved to open its management ranks to Filipinos of any ethnicity. Family members are involved in the group’s management only if they have the requisite professional skills. The group has raised its accounting practices to international standards, ahead of that mandated by the Securities & Exchange Commission and the Philippine GAAP.


Syed Mokhtar Al-Bukhary has built himself up from almost nothing to be one of Malaysia’s richest men. He has developed port facilities and an airport in southern Malaysia, as well as amassing interests in property, hotels, power stations, rubber plantations, banking, retailing and construction. His companies are run by professional managers throughout, rather than family members.

He dislikes publicity and is remarkable by Malaysian corporate standards in not using his shareholders’ money to buy a corporate jet, a helicopter or a fleet of Mercedes-Benz. He has no interest in personal aggrandisement. Instead, his great passion is his charitable foundation, the Al-Bukhary Foundation, into which he has poured millions to build mosques, schools and hospitals. The foundation has also built, stocked and runs the Islamic Art Museum in Kuala Lumpur, a world-class institution that puts Malaysia’s National Museum to shame. A modern Muslim, he does not believe that women should cover their heads or faces and feels that Islam should return to what it was once known for: commerce and the arts.

In late 2006, his MMC Corporation, together with a local partner, won an extraordinary $30 billion infrastructure deal in Saudi Arabia to develop a new industrial and commercial city. It’s a huge undertaking for any company, let alone a Malaysian one, and it represents how Al-Bukhary likes to do business. He is a strong promoter of Muslim cross-border investment and trading ties, in the same way that other commercial ethnic groups trade across borders.

Al-Bukhary is a breath of fresh air for corporate Malaysia and an inspiration to Muslims everywhere.


Susilo Bambang Yudhoyono was elected president of Indonesia in 2004. To some, his presidency has been disappointing, but then it could barely be anything else. Indonesia’s problems are so enormous and intractable that the job is near-impossible. So why is Yudhoyono one of Asia’s top progressives? Largely because of what he’s not: he is not corrupt, prone to nepotism, administratively incompetent or an obsessive nationalist.

He has enormous personal integrity and has done a remarkable job in balancing Indonesia’s many conflicting interests in this the world’s largest Islamic country, but also one of its most ethnically diverse. A retired general, he is Indonesia’s sixth president but the first to have been elected directly by voters. He is an English speaker, in contrast with his immediate predecessor Megawati Soekarnoputri, a Jakarta housewife whose only political attribute was that her father had been president. Unlike other senior politicians’ children, Yudhoyono’s two sons are not in business. Each of ex-president Soeharto’s six children started one or more conglomerates, all dependent on government favours and concessions.

Yudhoyono earned a reputation as one of the army’s pro-reform officers in the last days of Soeharto’s regime. In the aftermath of Soeharto’s fall in 1998, Yudhoyono talked publicly about his ideas for reforming the role of the military and Indonesia more generally. His popularity rose, and he was made co-ordinating minister for politics and security. One of his first tasks was to remove the army from political life.

Yudhoyono’s time as president has been plagued by natural disasters, including the 2004 tsunami. Nonetheless, he has negotiated a peace settlement with rebels in the province of Aceh, and cut fuel subsidies twice in 2005.


Ratan Tata is India’s most progressive businessman on several counts: he has expanded a family business into a well-run international conglomerate and has done so largely on behalf of charity – the principal owners of the Tata Group are a series of charities. The family’s activities (it has given millions to research, environment projects and schools), like those of the rest of India’s small Parsee community of which Tata is a member, have made it well-liked and admired, despite its wealth and ethnic minority status. The Parsees provide a valuable lesson to other rich business minorities on how to avoid persecution from an envious majority.

Tata joined the family business after graduating in architecture and structural engineering from Cornell University in 1962. In 1991, he took over as group chairman, ushering in a period of management rationalisation and greater investment in core activities that have allowed the group to expand to its current size – Tata Group has the largest capitalisation on the Mumbai stock exchange. The group bought Tetley Tea in 2000 for $421 million, the truck division of South Korea’s Daewoo for $102 million in 2004 and, in January, Europe’s Corus steel-making group for a massive $11.3 billion. Under Tata, the group has been at the forefront of India’s push to become the world’s biggest exporter of IT services.

Tata is on the board of India’s central bank and is a member of the Prime Minister’s Council on Trade and Industry. Among his other public and charitable roles, he also serves on the programme board of the Bill & Melinda Gates Foundation’s India AIDS initiative. Tata has shown India that its companies can be world class, and he is arguably the country’s most important philanthropist.


A US citizen, Warren Lichtenstein is an activist investor and founder of Steel Partners, a New York-based hedge fund. The fund has stakes in more than 100 companies in the US, Japan and Korea. Lichtenstein is a demanding minority investor, who exercises shareholder rights to enforce disclosure and accountability from the companies in which he invests. Accordingly, he has been something of a shock to corporate Japan and Korea, in which minority shareholders are expected to know their place.

In Japan, many listed companies hold their AGMs on the same day to limit the number of meetings that investors in multiple companies can attend. Many companies have little interest in shareholder value and build up huge cash piles with no intention of returning funds to shareholders. This, and other sluggish practices, damages the reputation of the stock market and hinders the flow of new capital.

Lichtenstein targets cash-rich firms with market capitalisations well below net asset values, builds up a stake in them and then threatens a takeover unless they return their cash to shareholders. His targeting of several Japanese companies in 2003 impelled the boards of dozens of unrelated Japanese companies to pre-emptively increase their dividend payouts. In Korea, Lichtenstein teamed up with fellow fund manager Carl Icahn to launch a hostile takeover bid for South Korea’s biggest tobacco company, KT&G. Hostile takeovers are almost unheard of in Korea and the move created an uproar, but KT&G agreed to return $2.9 billion to shareholders.

Lichtenstein’s method of doing business has made him immensely wealthy, but he has also dramatically changed the behaviour of Japanese and Korean companies.


A Sri Lankan-based intimate apparel maker, the three Amalean brothers founded MAS Holdings in 1986. It is the largest supplier to Victoria’s Secret and other customers include Gap, Marks & Spencer, Tesco and Reebok. In March 2007, MAS announced plans to launch its own brand this August.

The company has 17 plants in eight countries and 35,000 employees. But what’s remarkable about it is its home-grown corporate social responsibility (CSR) programme. Women comprise more than 90% of MAS’ employees and so the company established the Women Go Beyond programme to educate and empower its employees. A beauty, health and hygiene certificate is offered, and there are classes on reproductive health, domestic violence and traditional crafts. Nearby schools and hospitals are funded and scholarships are awarded.

MAS set up its plants in rural locations near villages so that women would not have to leave their families to find work, and all employees must be aged at least 18 (in contrast, Chinese factories can take on employees as young as 14). The company also invests in developing clear career paths: its Ready to Unleash programme aims to guide graduates into the company and on to management levels.

MAS has faced intense competition from China. The international Multi-Fibre Agreement, which ended in 2005, ensured that at least some of the West’s clothing and textiles were sourced from smaller developing countries. Since then, the Amaleans have shown that it is possible to compete with sweatshops in China by emphasising their CSR programme, which has made MAS a more attractive source for retailers with ethical buying policies.


Born in 1947, Jaruvan Maintak is Thailand’s auditor general and an iconic figure. A Catholic convert, she graduated from Thailand’s Chulalongkorn University and later completed an MBA at Michigan State University. She joined the office of the auditor general and in 2001 was appointed by the Thai Senate to be the auditor general. The manner of the appointment was controversial, however, and she did not appear to be then prime minister Thaksin Shinawatra’s first choice for the position.

Jaruvan embarked on a series of investigations that embarrassed the government and a legal challenge was made to her appointment, which was upheld. Many interpreted this move as an attempt to silence her rather than concerns about due process. She refused to step down, saying she would do so only if the king assented. The king withheld his assent, thus embarrassing Thaksin and his government.

The military coup in September 2006, which had the implicit backing of the king, abrogated the 1997 constitution and most of the state organisations it established. The auditor general’s office was spared, however, and the new military government confirmed Jaruvan in her position.

The government made Jaruvan a member of its newly established Assets Examination Committee (AEC), tasked with investigating corruption involving projects approved by Thaksin’s government. Jaruvan threatened to resign if its scope was not expanded to include all cases of alleged irregularity, including the personal wealth of former cabinet ministers.

The AEC has since commenced several high-profile investigations and Jaruvan has shown no fear. Her dogged determination has attracted many enemies, but she has set new standards of accountability in Thailand.


Singapore has some of the world’s tightest media restrictions. Little genuine public debate is permitted and investigative journalism is largely non-existent. The role of the media is to report government announcements rather than to hold the government to account. And so Singaporeans are fed a bland diet of lifestyle articles, world news often slanted to show Singapore in a good light by way of comparison, and news about government policy. Not surprisingly, Singapore has one of the world’s most active blogging communities. Genuine debate, opinion pieces and news appear on many Singapore-related websites.

Lee Kin Mun has become one of Singapore’s most widely read and influential bloggers through his social and political commentary website, Lee also produces a satirical podcast called the Mr Brown Show, which averages 20,000 downloads a day. It is sophisticated and hugely funny – and a stark contrast to what is available on local government-controlled television.

Such is the popularity of Lee’s blog that he was given a column in the government-controlled Today newspaper in a measure designed to demonstrate that the government could tolerate a measure of public debate. However, the experiment ended abruptly after Li wrote a column on rising living costs. A government official complained that Lee had distorted the truth and Singapore’s prime minister claimed that Lee had made wild accusations.

Lee continues to publish and broadcast his satires and commentaries, providing Singaporeans with a vibrant and diversified media otherwise denied them.


The assertive and competent Zeti Akhtar Aziz was appointed governor of Malaysia’s central bank in 2000. Her appointment demonstrated to the world that being a Muslim woman in an Islamic country was not incompatible with either holding a position of real power or with south-east Asian traditions. She had held previous positions with the bank, including deputy governor, chief economist and head of the economics department.

Zeti was instrumental in advising the government to unpeg the Malaysian ringgit from the US dollar, as she had been in advising the government about implementing the peg in the first place. Many might have disagreed with the government’s decision to peg the ringgit in 1998 during Asia’s economic crisis, but few could argue with the competency with which it was carried out – Malaysia’s central bank is one of Asia’s most technically able and least corrupt.

Zeti has been prominent in the development of Islamic finance in Malaysia and internationally, such that the country is emerging as an important centre for Islamic finance, both in its practice and in developing the regulatory framework to support it. She studied economics at the University of Malaya, obtained her PhD from the University of Pennsylvania, and is published in the areas of monetary and financial economics, capital flows and macroeconomic management.


Tarisa Watanagase, the first female governor of the Bank of Thailand, the country’s central bank, was appointed to the post in October 2006; she also sits on the seven-member monetary policy board that sets interest rates in Thailand. She has been with the bank for 31 years (with a break at the IMF from 1988 to 1990) and is widely respected in the finance community not only for her technical skills, but also for her reputation as a fighter for central bank independence.

The attempts of previous prime minister Thaksin Shinawatra to undermine the independence of most key state institutions was one of the contributing factors in the military moving against him in September 2006. The interim military-backed government’s appointment of Tarisa to head the central bank was a signal that it intended to adopt a hands-off approach. Similarly, it opted to reinstate the auditor general, who Thaksin had sought to remove, for similar reasons (see Jaruvan Maintaka).

Born in 1949, Tarisa gained a PhD in economics from Washington University. She joined the bank in 1975 and has had experience in each key division. Before her appointment to governor, she had been one of the bank’s three deputy governors and another woman, Atchana Waiquamdee, was appointed to fill the vacancy created by Tarisa’s appointment. The pair provide clear evidence of the prominent role that women are able to play in Asia.


David Webb runs one of the best websites devoted to corporate governance among listed companies anywhere – see His commentaries on the misdeeds of many of Hong Kong’s listed companies are exceptionally well written, and are devastating in their forensic and careful analysis. Unfair related-party transactions between listed and privately held companies are a particular target of his; a recent post, for example, looks at Chinese oil company CNOOC’s attempt to force minority shareholders to approve more loans to a finance company set up by its state-owned parent.

Still relatively young, Webb is a former investment banker who moved to Hong Kong from London in 1991. He was corporate finance director of Barclays subsidiary BZW Asia, conducting equity issues and advisory mandates throughout Asia, until 1994, when he became in-house adviser to Wheelock, a local listed conglomerate, before retiring in 1998.

He made a small fortune from savvy stock investing and has devoted much of his time since to non-profit corporate governance advocacy work, most notably through his website, which has attracted a following among the investment community. He has become widely quoted on corporate governance issues in the Hong Kong and regional media. He holds small stakes in many companies in order to attend AGMs and hold directors accountable.

He was elected a non-executive director of Hong Kong Exchanges & Clearing, which runs Hong Kong’s stock exchange, in 2003. Some were concerned that this would compromise his independence, but his withering and typically humiliating website commentaries have continued.


Pushpa Kamal Dahal, aka Prachanda, is the leader of the Maoist Communist party of Nepal. Born into a Brahmin family in 1954, he studied agricultural science at a Nepalese university and was inspired by China’s Cultural Revolution in the 1970s to become active in the communist movement in Nepal. He became leader of the Communist party in 1986 and after it splintered he emerged as the leader of the Communist party of Nepal (Maoist) in 1994. The party gave the government a list of 40 demands and threatened to declare war if the demands were not met. Between 1996 and 2006, the Maoists waged a bloody civil war, causing enormous damage to Nepal’s rudimentary infrastructure and costing about 12,000 lives. Both sides were culpable and engaged in appalling human rights abuses.

In February 2005, Nepal’s king sacked the elected government and took direct control of day-to-day affairs of state. In November 2005, Prachanda and an alliance of seven parties that had been elected to Nepal’s parliament in 1999 released a 12-point plan for co-operation. Key to the plan was a commitment by all sides to a multi-party democracy, press freedom and human rights. A ceasefire was agreed and, at Prachanda’s urging, the government of prime minister Girija Prasad Koirala stripped almost all powers and many assets from the king, a process that has occurred with surprising speed.

Prachanda’s talks with the prime minister have resulted in an agreement that the Maoists will enter a multi-party interim government, a new constitution will be drafted and both sides will disarm under international supervision. Nepal now has its first chance of peace in more than a decade and the possibility of real political reform.

Dr Collin Abraham: Resurrection of the NEP

April 7, 2007

Tun Dr Mahathir’s foreboding that the Malays stand to be colonized again under the Iskandar Development Region Project (IDR project), sets the stage for an analysis within the framework of W.B. Yeats, “Things Fall Apart; the Centre Cannot Hold”; and the “Gunfight at OK Corral” where Tun himself will probably be the last man standing against all odds. 

The fact of the matter is that despite his groundbreaking thesis of the Malay Dilemma and the massive thrust arising from this to push the Malays ahead economically (as no Prime Minister has done or can ever do), Tun has had to face the harsh reality that the NEP has been a failure in achieving this target. There is not much point anymore in laboring on the reasons for this at any detail. This is because it is now widely acknowledged that it was primarily due to the usurpation of political power by the Malay Upper and Middle classes, who had in fact shown great ingenuity in utilizing this base for the accumulation of unprecedented personal economic wealth to the detriment of the community as a whole. Of course, this achievement would not have become a reality, or indeed a fine art as is has, had it not been with the active involvement and participation of the Baba in the Ali Baba equation but this is yet another related story. 

Tun is theoretically correct in his analysis that the Malay rakyat would be colonized again under the IDR project, for the simple reason they have nothing to gain because they have nothing to fight back with. Under British colonialism they also were in the same position which is one of the reasons some joined the Malayan Communist Party because the latter had the guns to fight back.  The present situation is in fact worse because the Malays simply do not have the high tech knowledge -based skills which cannot be acquired overnight simply by joining foreign skilled personnel. They are at the bottom of the skills ladder and likely to remain there, because the preliminary steps of skills on which they could have climbed up the skills ladder, are no longer relevant. This is the same reason why the majority of Blacks in cities in the USA find themselves “down in the dumps”. 

The political and economic situation of elite domination in the country today is now fully entrenched and irreversible in the political system and it is therefore necessary to ‘write off ‘the present scenario as unworkable and to implement new development models instead. I am in a unique position in having had two of the most outspoken brilliant Malays, namely Tun Dr Mahathir and Datuk Zaid Ibrahim write Forewords to my recent book entitled “The Finest Hour”: Malaysian-MCP Peace Accord in Perspective where they have both suggested that alternate development models should now be seriously explored. Indeed I have devoted one entire Appendix in the book entitled “Epilogue” postulating that unless and until we seriously consider such alternate models, even the present precarious peace we now enjoy, may not be lasting. 

With the greatest of respect and in all humility I wish to propose that the Malaysian people appeal to His Majesty our King to immediately appoint a Royal Commission for National Integration and National Unity under an Ombudsman along the lines of the National Operations Council (after the May 13th racial riots). The composition of this Commission should be drawn entirely from Non-Government Organisations, the only exception being senior members of the Armed Forces, to ensure that implementation was always complied without question, as was done under the NOC. 

Dr Collin Abraham. 

How about “Badawi Development Region” for Penang?

March 25, 2007
 Johor Bahru seafront

Iskandar Development Region (IDR) is seen as “Shenzhen for China” to many businessmen. It’s in a way a special region for development with special incentives unavailable in other Malaysian economic centres. Some businessmen has described the IDR as “one nation,two systems”. Because only investors in IDR enjoys the exemption of the usual 30% bumi quota.

Following the disclosure of some special incentives schemes by the prime minister, one of the advisors of IDR Tun Musa Hitam openly proposed to do away with the usual 30% racial quota. It was reported in the press that the PM has decided to accept the proposal but it was said that the exemption was meant for foreign investments. Another report said that the exemption was only meant for six selected sectors, i.e. creative industries, logistics, education, tourism, financial advisory and consulting and health care. It was not for all industries. The IRD Authority has not explained why only six selected industries were given the special exemption and why these six were selected.

It was also not clear at this point whether the exemption also covers domestic investments. We hope it does cover local investors for all fairness; if the answer is otherwise, the local investors may have to set up companies in Singapore and use them as their investment arms for the IDR. That will be the biggest joke of the day!

IDR, as a concept, should work for the southern region. It will certainly attract some if not many investors from Singapore and Indonesia. Those who believe the IDR is flood-proned would not come. Likewise with those who dislike the racial quota(Remembered? Only six industries were exempted according to Najib)

But how about the northen region of Peninsular Malaysia? Umno has been complaining day and night about Penang being left out as an economic centre and how the Malays were being marginalised in Penang. Why don’t we set our eyes on Balik Pulau, which is said to be backward with no development?

Why don’t Abdullah Ahmad Badawi kick start a similar plan for Balik Pulau? Call it Badawi Development Region and provide similar incentive schemes and exemption of racial quota like what they did with IDR. Such “Shenzhen-like” special development region should be attractive to investors from Thailand and India. after all, Penang is a natural port with a great potential nothing less than South Johore.No?

A businessman I know asked me a question which even AAB and Najib would not dare to answer – why don’t we do away with the 30% bumi quota to promote economic development throughout Malaysia? It’s a question only opposition leaders like Anwar Ibrahim and Lim Kit Siang can answer.

Roundup: Malaysia announces incentives for Iskandar Development Region

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Malaysian Prime Minister Abdullah Ahmad Badawi on Thursday announced a package of policy incentives to spur the development of the South Johor Economic Region, also known as “Iskandar Development Region”.These incentives apply to qualifying companies in six targeted sectors, namely, creative industry, educational services, financial advisory and consulting, healthcare, logistics and tourism related services.Badawi unveiled the incentives, the first package announced for the Iskandar Development Region (IDR), at the Investment Malaysia Conference 2007 here.Firstly, those qualifying companies will be exempted from corporate income tax for activities within these zones and outside Malaysia for 10 years upon commencement of operations.Secondly, qualifying companies will be exempted from withholding tax on certain payments for 10 years upon commencement of operations.The condition for the above-mentioned two incentives is that those companies should commence their operation before the end of year 2015.Thirdly, qualifying companies in the six sectors will enjoy exemption from Foreign Investment Committee rules, have freedom to source capital globally and can employ foreign employees within the approved zones without employment restrictions.”Further details of the incentives and support package will be announced in due course by the one-stop-center Iskandar Regional Development Authority,” the prime minister said.He added the Malaysian government will continue to review those incentives to ensure the competitiveness of the IDR.Meanwhile, Iskandar Regional Development Authority (IRDA) released a media statement after Badawi’s speech to clarify those incentives.

IRDA said to qualify for those incentives, companies must be approved by IRDA and carry out the qualifying activities in designated zones, for customers within the zones and outside Malaysia. These companies will be known as IRDA-status companies.

In lieu of exemption from the Foreign Investment Committee rules, IRDA-status companies will be required to make a contribution to the Social Projects Fund. The fund will be administered by IRDA for social welfare development in IDR.

While qualifying companies will be free to employ foreign employees in these zones, IRDA said it expects Malaysians to make up the large majority of the workforce.

Located in the southernmost Johor state, the IDR encompasses 2, 217 square kilometers of land, covering the logistic triangle of Senai Airport to the north, Port of Tanjung Pelepas to the southwest, and Johor Port in Pasir Gudang to the southeast. The state capital city of Johor Bahru and Nusajaya, the planned state new administrative center, are located within this region.

Envisioned to be the leading new growth engine in the country, the economic region was officially launched by Badawi on Nov. 4, 2006.

Malaysian government targets a total investment of 50 billion ringgit (14.29 billion U.S. dollars) in the first five years for IDR. Badawi on Thursday said the first batch of investment worth approximately 4 billion ringgit (1.14 billion U.S. dollars) is currently being finalized.

Source: Xinhua

TWN,thank you for your analysis on USFTA

March 21, 2007

Re: TWN Analysis on the Proposed Malaysia-US FTA

We wish to bring to your attention analysis prepared by the Third World Network on the Malaysia-US FTA looking at the implications of the agreement on the various economic sectors in Malaysia as well as on the society as a whole.

The areas covered by the analysis include market access, services, investment, telecommunications, financial services, government procurement, competition polices, environment, biosafety and intellectual property rights.

The paper is available online at:

Best wishes,

Third World Network
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