World Bank report shows Putrajaya may have sold off country’s assets, says Rafizi

Putrajaya may have "sold off" or "pawned" the country's assets in a last ditch effort to meet its budget
deficit target, said PKR.

Party strategic director Rafizi Ramli (pic) cited the latest World Bank report on Malaysia to back his claim, noting that it had said that Prime Minister Datuk Seri Najib Razak's administration will achieve the target to reduce its deficit to 4% through non-tax resources that included RM1.4 billion gained from “asset sales” and RM4.2 billion from “securitisation of government mortgages”.

Rafizi cited Page 10 of the report that details how Putrajaya planned to achieve its deficit target of 4% of the gross domestic product (GDP) this year from 4.5% last year.

The Pandan MP said the revelation in the World Bank report was shocking as it appeared that the Najib administration has reached the point where it is selling the nation's assets and pledging the country's land (through securitisation of government mortgages) to prop up the government's extravagance and wastage.

"I suspect the plan to sell off national assets has already taken place, because the aim of achieving the target deficit rate of 4% has in fact already failed.

"This means our national assets have already been sold off or pawned so that the proceeds for 2013 can be used to close up the chasm between national revenue and expenditure," he said. – December 20, 2013.

World Bank sees tough 2014 for Malaysian households

Malaysians winding down for the year-end may already have to start bracing for tough times in 2014, the World Bank says.

According to its Economic Monitor report on the country released on Dec 10, household expenditures will take a hit as the government continues to cut subsidies and other policies.

It said that even with cash aids like the Bantuan Rakyat 1Malaysia (BR1M), households will need to tighten their belts, leading to a dip in private consumption.

It also said that BR1M will cost the government RM7.1 billion, so the actual cut in fuel subsidy is expected to expand from 23 percent today to 28.6 percent in 2014 to meet savings targets.

Happily, however, the World Bank expects inflation to rise “only modestly” in 2014 from 2.3 percent in 2013 to 3.2 percent, due to benign supply conditions such as weak commodity prices.

“Reduced energy subsidies, not only in terms of additional fuel price hikes but also an adjustment of electricity tariffs, may have a knock-on impact on consumer prices, as may the wider introduction of the minimum wage.

“Private consumption may also be negatively affected by possible interest rate hikes and tighter credit markets, with signs of weaker credit expansion already appearing this year,” the report said.

It added that poor prospects for agriculture commodities will also bring pain to smallholders. This would include the roughly 420,000 smallholders under the Federal Land Development Agency (Felda) scheme.

However, the World Bank said, firm employment and wages as well as higher welfare cash aid like the BR1M can help to ease the pain for households to an extent.

Even then, it said, private consumption growth to slide to 6.5 percent in 2014, a significant dip from 8.4 percent in 2013.

The World Bank expects private consumption to pick up to 7.2 percent in 2015, but this will still be lower than 2012 figures, where private consumption grew by 7.7 percent.

“Growth in government consumption will come in at 6.0 percent in 2013 (largely due to high growth in the second and third quarters) before contracting in 2014 by 0.1 percent,” it said.
Gov’t must watch its spending

It said that while subsidy cuts are an effort to reign-in the deficit, the coffers will be hit by a reduction in oil-related revenue.

There will be a potential boost in corporate and personal taxes, despite tax breaks offered in the Budget, but it will not be enough to truly reel in the deficit.

“Therefore, the reduction in the deficit will need to be achieved through expenditure restraint,” the Economic Monitor report said.

It said the government’s efforts will mean lower development levels, with debt-to-GDP ratio expected to drop from 54.8 percent to 54.3 percent.

“Long-term fiscal sustainability will require continuing on the path of consolidation, while carefully monitoring and managing contingent liabilities and other sources of fiscal risk,” it said.

The debt-to-GDP ratio does not take into account contingent liabilities, which include government-backed bonds and other guaranteed debt by government-linked corporations.

World Bank Recognises Malaysia As Regional Leader In Corporate Governance

KUALA LUMPUR, Feb 26 (Bernama) -- Malaysia has received strong ratings from the World Bank in its Corporate Governance Report on Observance of Standards and Codes 2012, said the Securities Commission Malaysia (SC).

In a statement Tuesday, the SC said the bank also reported that Malaysia has been recognised as a regional leader in corporate governance, and has made substantial progress in improving the legal and regulatory framework in relation to corporate governance.

"According to the report, Malaysia's overall scores are higher than the average scores of countries within the Asian region.

"The bank also acknowledges that Malaysia has a large capital market, strong institutions, sophisticated participants and high quality accounting practices," it said.

SC chairman, Datuk Ranjit Ajit Singh, said it was important to have in place a strong corporate governance eco-system in order to sustain active investor interest and growth in the capital market.

"We are highly encouraged by the strong endorsement by the World Bank on the collective efforts by the regulators and the industry in strengthening corporate governance in Malaysia," he said.

The report, which is an independent assessment carried out by the World Bank, examines the country's corporate governance framework benchmarked against the Organisation for Economic Cooperation and Development (OECD) Principles for Corporate Governance.

This is the third time that Malaysia has participated in the assessment.

The first was in 2001, and subsequently in 2006.

Out of the six OECD Principles for Corporate Governance examined in the report, Malaysia scored highest in terms of equitable treatment of stakeholders, enforcement and institutional framework, as well as disclosure and transparency.

World Bank warns of 'very difficult year'

The US economy will continue to suffer, the World Bank estimates, but not as much as poor countries [GALLO/GETTY] 

 Bi-annual report slashes growth projections and predicts a downturn in 2012 that "no country and no region will escape".
 The World Bank has warned the international community to brace for slow growth and economic challenges in 2012 stemming partly from Europe's debt woes.

The bank substantially cut its forecasts for growth in both developed and poorer nations in its twice-yearly report, issued late on Tuesday.

"Europe appears to have entered recession, and growth in several major developing countries [Brazil, India and to a
lesser extent Russia, South Africa and Turkey] has slowed," the bank said as it updated forecasts made last June.

It predicted the global economy will expand by 2.5 per cent in 2012 and by 3.1 per cent in 2013, well behind the 3.6 per cent growth for each year that the bank had projected in June.

The US economy will also suffer from slower global growth, the report said, though not by as much as developing countries.

"The world is very different than it was six months ago," said Andrew Burns, head of the bank's global economics team and lead author of the report. "This is going to be a very difficult year."

Sobering assessment

The report noted two major reasons for the projected global slowdown: Europe's debt crisis has worsened and several big developing countries have taken steps to prevent growth from overheating and fueling inflation.

Developing countries' economies will continue to out pace those of richer, developed countries, but the World Bank also
lowered its forecasts for growth in these countries to 5.4 per cent in 2012 and six per cent in 2013.

That was down from previous estimates of 6.2 per cent and 6.3 per cent respectively for growth in developing countries.

"The downturn in Europe and weaker growth in developing countries raises the risk that the two developments reinforce
one another, resulting in an even weaker outcome," it said.

It also cited failure so far to resolve high debts and deficits in Japan and the US and slow growth in other high-income countries, and cautioned those could trigger sudden shocks.

On top of that, political tensions in the Middle East and North Africa could disrupt oil supplies and add another blow to
global prospects, the World Bank said in a sobering assessment of the challenges facing the economy.

'Global crisis'

It said that while Europe was moving toward a long-term solution to its debt problems, markets remain skittish.

"While contained for the moment, the risk of a much broader freezing up of capital markets and a global crisis similar in
magnitude to the Lehman crisis remains," the World Bank said, referring to the US investment bank that went bankrupt in 2008 and helped intensify a global financial crisis.

Against that backdrop, it said developing countries were even more vulnerable than they were in 2008 because they could
find themselves facing reduced capital flows and softer trade.

In addition, many developing countries have weaker finances and would not be able to respond to a new crisis as vigorously.

The World Bank pointed out that since last August risk aversion to Europe has shot up and "changed the game" for
developing countries that have seen their borrowing costs escalate sharply and the flow of capital to them decrease.

"No country and no region will escape the consequences of a serious downturn," the World Bank said, adding that now was the time for developing countries to plan how to soften the impact of a potential deep crisis.

PKR reveals new ‘proof’ in World Bank row

PKR says that a World Bank loan was sought through the National Economic Action Council, of which Mahathir was the chairman.

KUALA LUMPUR: PKR today continued with its attack on Dr Mahathir Mohamad by showing alleged new evidence to prove its claim that the former premier had asked for loan from the World Bank during the 1999 financial crisis.

PKR strategic director Rafizi Ramli said in a statement today that a World Bank report coded “PID6999″ showed Mahathir asking for loans to support his administration’s National Economic Recovery Plan (NERP).

The loans were sought through the National Economic Action Council (NEAC) under the tenure of Mahathir’s strongman Daim Zainuddin. Mahathir was the chairman of NEAC.

Daim was the NEAC’s secretary and was also the director of the Economic Planning Unit that answered to the former prime minister himself.

The World Bank report read:

“In view of these circumstances in July 1998, the government announced a National Economic Recovery Plan to bring the economy back on a positive growth path.

“One of the six strategic objectives of the National Economic Recovery Plan is to continue the country’s equity and socio-economic agenda which had been instrumental during the past two decades, in maintaining social stability in the country.

“In line with this objective, the government has proposed a plan of action to mitigate the adverse social impacts of the crisis which threaten to reverse the gains made in the past. The government has approached the (World) Bank for help in strengthening this plan and implementing it through a Social Protection Project”

‘Asked for and not offered’

The NERP was introduced as a blueprint to steer Malaysia out of the Asian financial crunch in July 1998.

The report stated that Malaysia had first sought the loan on July 26, 1998. It further stated that the World Bank assessment team had departed for Malaysia on Nov 30. The negotiation began Feb 1, 1999.

Rafizi said the report clearly stated that the aid was “asked for and not offered”.

In his blog posting yesterday, Mahathir maintained that he had never written any letter requesting for loan from the World Bank.

He said that Malaysia had been taking loans from the World Bank since 1958, with the last being in 1997.

The funds, however, were only disbursed in 1999, which explained the records produced by PKR, he added.

Mahathir reiterated his allegation that Anwar had favoured IMF policies which he said were detrimental to Malaysia’s sovereignty.

He said he would swear on the Quran and dared Opposition Leader Anwar Ibrahim, who ignited the ongoing spat, to do the same.

Rafizi laughed off Mahathir’s statement, stating that “daring others to swear on the Quran would only lead to more expose of his family’s corruption”.

“I believe Tun Mahathir would find new excuses to defend himself although it is obvious that he admitted to taking the loans (despite denying before),” he said.

“This polemic of daring others can lead to other issues involving his (Mahathir) family members and it will be hard for him to deny them,” he added.

Sandiwara Tun Mahathir terbongkar

Selama ini, Mahathir menyalahkan Dato' Seri Anwar Ibrahim kononnya beliau adalah alat kepada Bank Dunia dan Tabung Kewangan Antarabangsa (IMF).

PETALING JAYA: Sandiwara mantan Perdana Menteri Tun Dr Mahathir Mohamad berhubung pinjaman dari Bank Dunia pada sekitar tahun 1999 sudah terbongkar walaupun selama ini beliau menafikannya.

Selama ini, Mahathir menyalahkan Ketua Pembangkang Dato’ Seri Anwar Ibrahim kononnya beliau adalah alat kepada Bank Dunia dan Tabung Kewangan Antarabangsa (IMF).

Laman web Bank Dunia mendedahkan bahawa Malaysia membuat pinjaman sebanyak tiga kali pada tahun 1999 dan sekali pada 1998 yang berjumlah AS$400 juta dan pinjamam itu dibuat setelah Anwar dipecat dari kabinet.

Pinjaman Mac 1999 itu atas nama projek “Malaysia Education Sector Support Project”, “Malaysia Social Sector Support Project” dan

“Malaysia Year 2000 Technical Assistance Project” manakala pada 18 Jun 1998 bagi projek “Malaysia Economic Recovery and Social Sector Loan”.

Tuduhan terhadap Anwar direkayasa semenjak tahun 1998 lagi lantaran komitmen beliau dalam memastikan disiplin pengurusan kewangan negara yang berteraskan tatakelola dan pertanggungjawaban, demikian menurut satu kenyataan dari pejabat Ahli Parlimen Permatang Pauh itu.

Kata kenyataan itu, Anwar bertegas menolak preskripsi ekonomi yang mahu menyelamatkan kroni dan elit politik ekonomi sedangkan rakyat perit berhadapan krisis ekonomi 1997/98.

Lantaran ketegasan beliau inilah Mahathir sebagai perdana menteri ketika itu merasakan perlu menyingkirkan beliau dari tampuk kepimpinan negara, kata kenyataan itu lagi.

Setelah lebih dari satu dekad fitnah terhadap Anwar dan keluarga beliau masih diteruskan oleh pimpinan Umno serta juak mereka.

Menurut kenyataan itu lagi, rakyat Malaysia tidak mudah lupa bagaimana Mahathir bersekongkol dengan Jack Abramoff dalam usaha beliau melobi untuk bertemu dengan Presiden Amerika Syarikat George W. Bush.

Malah menurut rekod Bank Dunia, selepas Anwar dipecat, Malaysia masih menerima bantuan Bank Dunia sedangkan di hadapan khalayak tanpa segan silu mantan Perdana Menteri itu semberono memfitnah Anwar sebagai perkakas Bank Dunia sekaligus agen Barat.

Mahathir cari alasan

Sementara itu, Naib Presiden PAS, Datuk Mahfuz Omar memberitahu Mahathir sekarang terkedu dan terdesak dan sedang cuba mencari alasan untuk mengalih pandangan rakyat dari isu beliau meminjam wang dari Bank Dunia pada tahun 1999.

“Rekod yang mengatakan beliau melakukan pinjaman didedahkan oleh laman web Bank Dunia dan sekarang Mahathir memikirkan cara terbaik untuk menutup pembohongan beliau iaitu memfitnah Anwar yang merupakan Menteri Kewangan ketika itu.

“Kenapa beliau takut dan kalau betul baik mengaku sahaja jangan melepaskan apa yang beliau lakukan kepada orang lain,” katanya kepada harakahdaily.

Tambahnya pendedahan pinjaman itu menunjukkan ianya berlaku pada tahun 1999 iaitu selepas Anwar dipecat sebagai Menteri Kewangan dan juga Timbalan Perdana Menteri.

“Dulu beliau cuba tunjukkan dirinya sebagai ‘hero’ yang tidak akan tunduk kepada Bank Dunia yang bersikap ‘kapitalis’. Tetapi sekarang segalanya terbukti bahawa Mahathir diwaktu siang beliau bermusuh dengan Bank Dunia tetapi malam menjadi teman perbualan telefon.

Mahfuz yang juga Ahli Parlimen Pokok Sena berkata, rakyat sendiri boleh melihat sikap berpura-puraan dan berbohong Mahathir hanya untuk kepentingan sendiri.

Katanya, dalam isu itu Mahathir yang sepatutnya perlu bersumpah bukan Anwar, dan seluruh rakyat sedang menunggunya.

Malaysia’s brain drain getting worse, says World Bank

KUALA LUMPUR, April 28 — World Bank senior economist Philip Schellekens painted a gloomy picture of the Malaysian brain drain situation today saying that it not only grew rapidly but is likely to intensify, further eroding the country’s already narrow skills base.

Schellekens said that the number of skilled Malaysians living abroad has tripled in the last two decades with two out of every 10 Malaysians with tertiary education opting to leave for either OECD (Organisation for Economic Cooperation and Development) countries or Singapore.

“Brain drain from Malaysia is likely to intensify in the absence of mitigating actions,” he said at the launch of the World Bank report titled “Malaysia Economic Monitor: Brain Drain”.

The report defined brain drain as the outflow of those with tertiary-level education.

The economist said Malaysian migration was increasingly becoming a skills migration with one-third of the one million-strong Malaysian diaspora now consisting of the tertiary educated.

“Expect the trend to continue,” he said.

He added that the outflow of talent was not being replaced with inflows, thus damaging the quality of Malaysia’s “narrow” skills base, noting that 60 per cent of immigration into Malaysia had only primary education or less, even as the number of skilled expatriates declined by 25 per cent since 2004.

The report also noted that there was a geographic and ethnic component to the brain drain, with about 88 per cent of the Malaysian diaspora in Singapore being of ethnic Chinese origin.

“The numbers for US and Australia are similar,” said Schellekens.

Report figures also show that 54 per cent of the Malaysian brain drain went to Singapore while 15 per cent went to Australia, 10 per cent to the US and 5 per cent to the UK.

The top three drivers for brain drain identified by the report were career prospects, compensation and social justice.

“(Lack of) Meritocracy and unequal access to scholarships are significant push factors and a deterrent to coming back,” said Schellekens. “Non-Bumiputeras are over-represented in the brain drain.”

He suggested that Malaysia implement important structural reforms in tandem with introducing targeted measures such as income tax incentives to reverse the brain drain.

“Once the highway is built, you must compete for traffic,” he said. “One suggestion is to hold a competition among members of the diaspora to get ideas on what can be done to attract them home.”

He added that while this report estimated the Malaysian diaspora at one million compared with about 1.4 million in a previous World Bank report, it was due to the lack of Singapore government information on the breakdown of its non-resident population.

“This is a conservative estimate and the diaspora could well be larger,” he said.

NEP, brain drain holding back Malaysia, says World Bank

KUALA LUMPUR, April 28 — More than one million Malaysians live abroad, the World Bank said today, adding that policies favouring Malays are holding back the economy, causing a brain drain and limiting foreign investment.

In a Bloomberg news service report today, World Bank senior economist Philip Schellekens was also quoted as saying that foreign investment could be five times the current levels if the country had Singapore’s talent base.

“Migration is very much an ethnic phenomenon in Malaysia, mostly Chinese but also Indian,” Schellekens (picture) told Bloomberg in Kuala Lumpur on Tuesday ahead of the report’s release today.

Governance issues and lack of meritocracy are “fundamental constraints” to Malaysia’s expansion because “competition is what drives innovation,” he said.

Malaysia’s growth fell to an average 4.6 per cent a year in the past decade, from 7.2 per cent the previous period.

Singapore, which quit Malaysia in 1965, expanded 5.7 per cent in the past decade and has attracted more than half of its neighbour’s overseas citizens, according to the World Bank.

Malaysia has in recent years unveiled plans to improve skills and attract higher value-added industries.

The World Bank conducted an online survey in February of 200 Malaysians living abroad in conjunction with the Kennedy School of Government at Harvard University.

They cited better career prospects, social injustice and higher wages as their main reasons for leaving, the Washington-based lender said in the Bloomberg report.

Singapore has absorbed 57 per cent of Malaysia’s overseas citizens, with almost 90 per cent of those crossing the border ethnic Chinese, the World Bank said.

“If Malaysia has the investment environment of Singapore and also had the innovation and skills environment of Singapore, then foreign direct investment inflows into Malaysia could be about five times larger,” Schellekens said in the Bloomberg report.

“They need to boost productivity and strengthen inclusiveness.”

Prime Minister Datuk Seri Najib Razak has pledged to roll back the country’s NEP-style policies but he also told the Umno assembly last year that the government’s social contract of providing benefits to Bumiputeras cannot be repealed.

According to the Bloomberg report, Najib has eased some rules to woo funds, including scrapping a requirement that foreign companies investing in Malaysia and locally listed businesses set aside 30 per cent of their Malaysian equity for indigenous investors. Last year, he unveiled an economic transformation programme under which the government identified US$444 billion (RM1.3 trillion) of projects from mass rail transit to nuclear power that it would promote in the current decade.

“If everything is implemented as they say, Malaysia is going to be a star economy,” Schellekens told Bloomberg. “The problem is implementation.”