Najib faces furore over corruption sweep

Malaysia's incoming leader Najib Razak faced a furore Wednesday over corruption charges against members of his party, while a former cabinet minister called for the king to block his appointment.

Fifteen members of the ruling UMNO party were Tuesday reprimanded over vote-buying during intense campaigning ahead of internal leadership elections next week.

The most prominent was Mohamad Ali Rustam, who was running to become deputy prime minister but is now disqualified. Najib, the current deputy, is due to replace Prime Minister Abdullah Ahmad Badawi this month.

Mohamad Ali said he would appeal against the decision.

Home Minister Syed Hamid Albar said the decision to punish the party members was potentially damaging, and that although UMNO needs to stamp out money politics the timing was unfortunate.

"If action is taken before you reach the final hurdle, then things will collapse. When it collapses, it will create a lot of undercurrents," he said, according to The Star daily.

"And these undercurrents for UMNO in its present state are not healthy," he said, referring to the party's crisis of confidence since disastrous results in general elections a year ago.

Najib has rejected suggestions that the move against Mohamad Ali -- seen as close to Abdullah's outgoing administration -- could trigger a split within the party.

James Chin, a political analyst from Monash University's campus in Kuala Lumpur, said vested interests meant Najib would survive the furore despite shouts of outrage from Abdullah's faction.

"The best way to describe UMNO is that it's a giant patronage machine. When people are angry it simply means they've been cut out of patronage. Those who are still on the gravy train will never go against the leader," he said.

Adding to the pressure on Najib, former cabinet minister Zaid Ibrahim on Wednesday appealed to the king to block his appointment as prime minister because of "unanswered allegations" over corruption and a murder.

"The air must be cleared, it is thick with accusations and doubts which can only undermine the office of the prime minister if he were to assume it," Zaid, a maverick who was sacked from the party last year, said in a speech.

Najib has been forced to repeatedly deny any involvement in the 2006 murder of 28-year-old Mongolian woman Altantuya Shaariibuu, the lover of one of his close aides, whose body was blown up with military-grade explosives. (MSN)


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The Financial Market Meltdown And What It Means To People Like Us

The global financial market meltdown triggered by the US subprime crisis has snowballed to a magnitude too big for anyone to tackle.

The financial crisis that has taken the world by storm over the past one year, has not seemed to slack off despite efforts by the US government to keep dishing out rescue plans and joint actions with other central banks to inject massive sums of money into the markets.

No one seems to be able to tell when the crisis will actually retreat, but one thing is sure: it has displayed the trend of further propagation, as evidenced by the spread of its fallout to financial institutions in Europe calling for similar rescue packages.

The intensity of this crisis easily dwarfs the 1997/98 financial crisis in Asia.

When the Asian financial crisis broke out a decade ago, the vulnerability of Asia's financial system quickly came under the harsh criticisms of the West. Nevertheless, the latest crisis has sparked off from the world's most powerful economy, and Western critics, which mercilessly thrashed Asian economies back then, appear to be less critical of the root cause of the debacle this time.

The root cause, to some extent, reflects the laxity with which the United States has been regulating the disbursement of subprime mortgage loans as well as the derivatives evolved from them.

The financial institutions of many countries, in particular developed and emerging economies, have been lured by such derivatives, which explains the far and wide reach of the latest crisis.

Even Malaysian banks, long known for their conservative approach in handling their investments, have been implicated in the debacle. Maybank, for instance, has suffered approximately US$10 million from the Lehman Brothers bonds it is holding.

Which, is a direct impact the crisis has on the country's financial system. As for the indirect impact, the intensity could be way larger than what we have imagined.

Given credit tightening, it is anticipated that global economy will be adversely affected. The United States is now a full-blown victim with its economy heading towards a possible recession and consumerism taking a sharp dive.

Like Malaysia, most countries in the world are export-driven economies. The US imports US$2 trillion worth of products each year, exporting only US$1 trillion (or a trade deficit of US$1 trillion). Many countries, especially Asian countries, have viewed the US as a very important consumer market for their products.

With Uncle Sam sneezing now, the whole world is poised to catch the cold soon.

Although the crisis has erupted in the US, it could bear down on ordinary people like you and me.

From a peak of more than 1,500 points, the KLCI has retreated to around 1,000 points today, with the face values of many stocks suffering drastic contraction. On top of the political uncertainties in the country, the external financial turmoil and subprime crisis have also contributed to the recent falls in the local bourse.

The shares we are still holding on hand have devalued remarkably; even the values of trust units have been squeezed.

In view of the existing uncertainties, coupled with the sluggish global economy, it remains largely unknown when Bursa Malaysia will see its sunny days once again.

Although some petty investors with a little cash to spare may want to do some bargain hunting at this moment, many will still adhere to the "cash is king" belief.

More importantly, having gone through the recent falls, investors have picked up some wisdom now, and they will try to avoid absorbing stocks they are unfamiliar with, let alone commodities which they seldom hear of.

This financial crisis is bound to lash some horrendous impacts on global economy, and Malaysia is not going to be spared. The first victims could have been electronic manufacturers which export a sizeable portion of their products (currently at 16% of total export) to the States. If you are in an electronic business, or are working for one such company, you may want to get yourself mentally prepared for possible layoff.

But this might as well be an opportune time for self-improvement so that you could still land on a new job in case you are retrenched.

Moreover, consumers are generally more prudent when times are bad, or they may have to encounter problem servicing their house and car loans if they lose their jobs.

More importantly, we must refrain from swiping our cards unnecessarily during this period of economic uncertainties.

Let's keep our fingers crossed that we could safely sail past the assault of this gigantic storm bearing down upon us in a big way now. (By LIANG FENGYING, Business Desk/Translated by DOMINIC LOH/Sin Chew Daily)

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Opaque govt crippling economy - Anwar

Opposition leader Datuk Seri Anwar Ibrahim took a swipe at the government’s opaque operations, which he claims, are crippling the economy and discouraging investment.

He said the opposition was concerned that public-sector spending had risen to RM200 billion annually from RM160 billion in 2004.

“That of course doesn't include the slush funds in excess of RM30 billion used at the discretion of the Prime Minister,” Anwar said in his address at the CLSA Investor Forum in Hong Kong today.

He was also concerned that the national debt has gone up by another RM100 billion and the fiscal deficit has risen to 4.8 per cent of GDP this year.

“With capital flight at a record high since the 1997 crisis, RM125 million in 2008 already, Malaysian investment abroad now exceeds inward foreign investment. We are facing a double barrel onslaught of our own doing with the ringgit hitting all-time lows since 2005 and inflation a record high of 8.5 per cent, the worst in 27 years.”

The de facto leader of the Pakatan Rakyat opposition coalition said issues of governance and corruption in the country had yet to be resolved.

“The latest corruption perception index from Transparency International speaks for itself. In almost a decade Malaysia has hardly improved its position in the ranking while our would-be peers are making substantial improvements.”

Anwar claimed that the opposition had a clear agenda for Malaysia.

• Revive the lagging economy by adopting market friendly policies.

• Take decisive action to cure the festering sore of corruption and cronyism that has decimated the judiciary, rendered anti-corruption efforts impotent and leeched billions of dollars from the state coffers

• Restore faith in the institutions of governance both domestically and internationally so that investors will once again find the country an attractive destination for their long-term investments.

• Strict adherence to the rule of law and an immediate end to draconian statutes that would allow the powers that be to detain their adversaries willy-nilly and without due process.

He said a change in government was central to the current political scenario. “The ability to handle a transition is a measure of the strength of the country's democratic institutions.”

However, he said it should be done peacefully and orderly as stability could not be sacrificed no matter how intense the desire for change has become.

Anwar said Pakatan Rakyat would introduce structural reforms in public procurement programmes and the management of state companies while ensuring that adequate social safety nets are in place.

“With the political will to combat corruption, wastage and mismanagement, an 8 per cent per annum growth rate is not unrealistic.

“Petronas should be made accountable to Parliament and not remain the private piggy bank of the Executive branch. We will remove restrictions on foreign capital inflows and outflows and revamp government protection of monopolies in industries like telecommunications and banking.”

In an apparent hit at Prime Minister Datuk Seri Abdullah Ahmad Badawi, the opposition leader said if markets are strong and unfettered, and if laws are transparent and enforced by impartial judges, “we will not need special development corridors or regions to attract investment”.

“A stable and clean business environment is far more important than special tax breaks and quotas handed out by a corrupt and opaque government,” said Anwar.

He said when the Asian crisis struck 10 years ago, the decisions he made as Finance Minister were not populist nor were they popular.

But he added that on principle, he felt they were the right moves even though they were at the expense of his personal freedom.

“Yet in my darkest hours of solitary confinement I had never given up hope that something good was to come of the ordeal. And now after more than a decade of struggle and profound challenges we are on the threshold of a new beginning.”

The Malaysianinsider


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