The Global Economic Tsunami and its Effects on Malaysia: State outlook

The various reports from the media gives us an insight into the status of the economy of some states in the country.

PENANG

It was reported that the state's manufacturing sector is looking at blank pages in its order books for the next three months.
Core industries, such as electrical and electronics (E&E), plastics, chemical, textile, steel and metal said demand had dropped by 50 per cent or more.

The chemical and steel industries are among the worst hit with demand crashing by more than 70 per cent in the last quarter of 2008.

Federation of Malaysian Manufacturers northern region chairman Datuk O.K. Lee said manufacturers were concerned over the sharp decline in demand.

Lee did not rule out retrenchment as one of the measures to be taken but stressed that it would be the last resort.
"Manufactures will first resort to pay cuts by reducing work days and annual leave.

"When the economy recovers, factories will need the skilled workforce which can be a costly process (if they have been laid off)."

About 200,000 people are employed in Penang's manufacturing sector. As over 60 per cent of products manufactured in the state are for export markets, he said the situation was expected to get uglier.

He said the 1997/1998 Asian financial turmoil was not so bad as the markets in Europe and the United States then were not affected.

In fact, many Malaysian manufacturers enjoyed brisk businesses due to cheaper exports.

He proposed that the government introduced more stimulus packages to boost domestic demand and consumption.

Effect on the Logistics Sector:

The blank pages in manufacturers' order books will also affect freight forwarders.

Penang Freight Forwarders Association president Joachim Loo said business dipped by 20 per cent in the last three months.

Even the tourism sector, the major income contributor for the state, is projected to be shaky.

Although overall room bookings for December were not badly affected, hoteliers said they were bracing for a challenging 2009.

"We are not talking about holidaymakers alone, but also business travellers.

"With the overall economic activity slowing down, we are foreseeing a drop in business travellers and bookings for meetings and exhibitions," a hotelier said.

JOHOR

THE steady stream of local and foreign direct investments pouring into the Iskandar Malaysia development corridor is giving Johor hope that the state will not be too badly hit by the global economic downturn.

To date, Iskandar Malaysia has secured RM40.25 billion in investments, of which RM14.45 billion was from last year.

The total figure represents 85.6 per cent of the targeted RM47 billion total investments in Iskandar Malaysia by next year.

Among the major successes are Newcastle University Medicine Malaysia and Cempaka International School, which will help turn Iskandar Malaysia into a top educational hub in the country.

The RM750 million investment to open the first Legoland theme park in Asia in Iskandar Malaysia also signifies investors' confidence in the corridor.

The investments in Iskandar Malaysia will be good news for Malaysians who have been retrenched in Singapore which is facing a recession.

PAHANG

PAHANG may give food coupons to the poor if the economic situation continues to worsen.

State Information and Communication Technology, Biotechnology and Information Committee chairman Datuk Mohd Sharkar Shamsudin said this was among the ways to help the needy now under study by the government.

"We may introduce a system where the poor and needy will get monthly aid of basic necessities such as cash, food and to help them pay electricity and water bills."

"Malaysians are now enjoying low fuel prices and the proposal to standardise the prices of essential items will further help the people, particularly the low income group."

SABAH

THERE are no reports of Sabah companies laying off workers, state Resource Development and Information Technology Minister Datuk Dr Yee Moh Chai said.

However, the state is conducting skills training programmes for workers to prepare them for other jobs.

Sabah Deputy Chief Minister Datuk Seri Joseph Pairin Kitingan said it was the government's policy to reduce the reliance on foreign workers.

"Locals on their part should take up training programmes to improve their skills. We are also hoping that the Sabah Development Corridor (SDC) will create employment opportunities for locals," he said.

The 18-year SDC blueprint aims to create 900,000 jobs for locals in key sectors of the state's economy, especially in the services, agriculture and manufacturing sectors.

Pairin also reminded locals to not be picky when it comes to jobs.

General Comments:

Sabah State Authorities should regularly publich statistics from the various sectors so that the people are aware of how things are shaping up. It is better to know the devil, so that you can be prepared for any eventualities.

The most important statistics would have to come from the seaports and the airports as they record the vital statistics of incoming passengers and cargo and from there we would be able to diagnose the health bill of the state on a monthly basis at least.

From these statistics we could deduce further as to the directions or even status of other sectors like the tourism industry as it affects traffic to the various places of interest.

Rail to JB mega mall starts Mon
(Should it not read Rail to 1BORNEO starts....)
The new seven-storey Danga City Mall (above) is one of JB's biggest malls and will have its own train stop (next picture). Malayan Railways will from Monday run eight daily trips to and from the mall, which is five minutes from JB's town centre. -- ST PHOTOS: DESMOND FOO

News Excerpts:
KTM trains can carry about 200 passengers on each run, but can take up to 1,000 per trip by just adding carriages if the demand calls for it.

Mr Hoo Seong Chang, who chairs Johor's Tourism and Domestic Trade committee, said at a press conference yesterday that KTM's stepped-up service was aimed at improving transportation between Singapore and Johor.

'It will be more convenient for travellers to have another travel option to JB,' he said.

Besides taking KTM trains or driving their own cars, Singaporeans get to JB by buses such as SBS Transit services 160 and 170 and taxis.

Mr Hoo added that KTM's services would also give trade and investment in other sectors a fillip as well.

Danga City Mall is part of Johor's project to turn Danga Bay into a tourist magnet.

Applying the above to our very own city of Kota Kinabalu, we can do the same and we have rooms to allow for the physical development to take place.

1BORNEO is easily the biggest hyper-mall in Borneo. It is set to be a huge tourist and shoppers paradise.

Sadly, this showcase much as it provides an attraction for people to be there, nothing much has been thought in getting these attractions realised by majority of those would be shoppers/visitors. It is 5 kilometres out of the city. Public transportation, yes the City Bus and taxis, but these modes of transportation is not an efficient way of ferrying hundreds of people at anyone time to a place of massive conggregation especially on weekends.

Perhaps this is the time for both the State Authorities and 1Borneo to sit down and plan in how to set up a Mass Transit System. It is high time. We can not procastinate and simply say, ah! we dont have the population yet for that system to be introduced. We should not be doing a catch up but to stay infront of development. This way we can show that we have a first class mind, though a developing state. This is the very reason why we should have a Total Integrated Transport System (Call it TITS, if you want to) for the City and have several more systems affecting inter town road transport communication.

For that matter, if you have the System beginning from the city, the System will pass through Likas Bay, Putrajaya, and UMS, and these are centres of activities that needed as much servicing as 1Borneo.

Wishing everyone a very happy and prosperous new year 2009. Stay with www.sdc.gov.my and www.sdc.net.my

Sunday, December 21, 2008

'KLIA East @ Labu’ gets government go-ahead: Airport part of 'massive city'
The cabinet has given the green light for a new low-cost carrier terminal on a 2,800-hectare site in Labu, Negri Sembilan, Transport Minister Datuk Seri Ong Tee Keat said.

Ong said the new LCCT would be built under a private finance initiative by conglomerate Sime Darby Bhd and budget airline AirAsia.

The airport will anchor Sime Darby's "massive integrated city" development in Labu, which includes five townships with services in education, health, sports, high technology, recreation and entertainment.

The RM1.6 billion terminal will be funded by Sime Darby and joint-venture partners which could include AirAsia and Malaysia Airports Bhd.

Ong said the new terminal was needed as the current facility in Sepang would not be able to cope with the increased passenger volume.

Under its final expansion phase, after which there will be no more room for growth, the Sepang LCCT will have its capacity increased to 15 million passengers a year, a figure industry sources say is likely to be exceeded by 2011.

Including its Thai and Indonesian affiliates, AirAsia flew some 18 million people this year. The new terminal will be built to accommodate 25 million passengers a year, and last on present forecasts until 2030.

Ong said he could not give a timeline on when work would start on the new LCCT.

"It is up to them as to when they want to start work. For our part we will make sure there is connectivity between the Kuala Lumpur International Airport and the new LCCT.

"We want to ensure passengers will be able to move from both places speedily, smoothly and efficiently."

To be called "KLIA East@Labu", the new terminal is slightly closer to central Kuala Lumpur than the present LCCT and will boast connectivity by both road and rail.

A 7km branch road will link it with the North-South Expressway and a 3km spur line will be built from the railway station in Labu -- a stop on the KL-Seremban KTM Komuter route.

Welcoming the project's approval, Negri Sembilan Menteri Besar Datuk Seri Mohamad Hassan said the KLIA would be connected to the new terminal by a 7km Express Rail Link (ERL).

Industry sources said a ground-breaking ceremony was being slated for late next month with construction planned for completion in two years.

When the new facility is commissioned, the Sepang LCCT, which has more than recovered its cost from the explosive increase in passenger numbers over the last two years, will serve other budget carriers, such as Singapore's Tiger Airways.

Mohamad said the siting of the new terminal near Kampung Gadong Jaya in Labu would boost economic growth in the state.

"The location is not far from the existing terminal. It will be an extension of the KLIA.

"When the airport is built, the state can expect economic development, such as housing estates and business centres, in the surrounding areas," he said. -- By : V. Vasudevan , NST

Datuk Seri Nazir Razak has become synonymous with the CIMB Group. His pedigree and achievements have made him a highly-regarded personality in corporate Malaysia. Here he replies to questions from readers.

1 People say you grew up in a well-known and rich family and, therefore, may not quite understand or have experienced a fall or real challenges. Is that true? - K.H. Low

I value my family background not for material comforts but for the emotional security and set of personal code of ethics it has instilled in me. As for career challenges, I can assure you that life as a rookie at CIMB was no bed of roses. To be honest, I struggled and almost surrendered a few times.

2 A set of rules is normally redefined by the person(s) in-charge, be in the corporate world or family unit. Do you use the same principle at home as you do at work?

Zaharah Rashid, Subang Jaya

Datuk Seri Nazir Razak

Although I try to assist, due to my work schedule I leave home matters largely to my wife.

3 We have heard so much about your life at work. Can you tell us more about your life outside the office? See Gaik Eng, KL

Life outside work revolves around my family. I have been married to Azlina since 1992 – we met while we were studying at Bristol University. We have two kids, Arman and Marissa. I try to spend as much time as possible with them. We are not good at glitzy social events and are actually very private.

It is important to have a good work/life balance; working long hours at the office also means working harder to obtain quality time with your family. As for sports, I find squash the most efficient form of exercise and Chelsea the best football team in the world!

4 Family support is key to one’s success. How do you reconcile that with the huge benefits it may bring you as your brother will be Prime Minister of Malaysia not too long from now? Yasir Tamizi

Indeed, the most important influence in my career has been my wife Azlina. She believed in me even before I had a job. She has been a great sounding board and conscience.

As for my brothers, we are close but we have each deliberately kept separate career paths. This won’t change even when Najib becomes Prime Minister.

As for CIMB, I am determined that my family relationships does not detract from the very real successes that CIMB staff have worked so hard and for so long to attain.

5 How do you distance yourself or the CIMB Group from the perception of having strong political connections in securing high-profile business mandates? Are other investment banks really in the same playing field with CIMB? Mustaqim Zain

CIMB was Malaysia’s leading investment bank before I became CEO in 1999. Since then, we have not only successfully defended that position but we have expanded to become No. 1 in mergers and acquisitions advisory in Singapore and a leading investment bank in Indonesia. I do not have any relatives in government in other countries.

I do not deny that connections of whatever form helps open doors but it’s always what you do in the room that matters. Our team at CIMB Investment Bank includes bankers with a track record that can justify winning any mandate.

CIMB has also been successful at consumer banking – surely that cannot be attributed to political connections.

6You are one of the few who practises meritocracy in staff recruitment/promotion. How can you persuade others to do the same to raise our competitive advantage? S. Paul

At CIMB, we try our best to ensure that those who do well are rewarded financially and in career progression, regardless of gender, race or age. But it is not easy as it is human to be biased towards one’s race, gender or even friend. Management has to continuously remind managers to challenge what comes naturally to them.

My best advice to others: admit this human failing and take steps to counter it because it will enhance your organisation’s performance.

7 You have been in the banking industry for almost 20 years and during that time you have been instrumental in propelling CIMB to great heights. What are your future plans? Do you see yourself as a regulator, for instance? Ratha

Over the next 10 years, I see myself continuing to spearhead the CIMB Group and, in particular, its transformation into an Asean banking group and then hand-over to an able successor. I am very committed to the CIMB agenda that has consumed me since 1989 and do not see myself in any other full-time role after this.

8 Your late father is seen as a people’s leader and you are seen as the single force behind CIMB’s success locally and abroad. Like your father, how can that be meaningful to you when there are people out there in your own country who are trying to make ends meet?

Ahmad Safuan Mokhtar, Project Management Consultant

I am very proud of the role that the CIMB Group plays. Banks are crucial to any economy and economic growth drives employment and wealth creation without which we can’t even begin to discuss distribution of wealth.

CIMB is a socially responsible organisation and strives to supplement the Government’s welfare efforts through our RM100mil charitable foundation.

9 What measures will CIMB take to tackle the current global crisis to avoid it becoming a victim of the “falldown”?

Katherine, Selangor

We have limited exposure to international assets and dependence on foreign financing. This ensured that we were not materially hurt by the crisis itself. But as the crisis will have a severe impact on the economy as a whole next year, we have to watch our loan books, be vigilant about all types of risks and contain our operating costs.

10 What is your view on the NEP? Should it be abolished? Hussein Hamzah, Johor

The NEP (National Economic Policy) was meant to be a 20-year exercise that, according to Tun Razak in 1971, is “… not aimed at promoting any sectional interest but is a blueprint for the progress and unity of our Nation.”

The NEP has had many successes against poverty and in uplifting the economic well-being of Malays but it now has gone on for 18 years longer than the founding fathers planned and is sadly seen by too many as a major cause of national disunity.

Furthermore, since the NEP was introduced, the competitive landscape of nations has changed dramatically, the complexion of our economy has transformed and Malaysians are quite different too.

I would suggest that we set up a closed-door forum of the best and brightest Malaysians to openly discuss the future of the NEP. At the very least, we need to change some out-dated implementation policies.

On a related note, I also feel disturbed that we can’t even seem to talk about vernacular schools. Again, why not set up a parallel forum to openly discuss all aspects of the education system so that future generations have a real chance of realising Bangsa Malaysia?