Speech during the DAP Forum "Feeling Good about the Feel-good Economy?"

by Lim Guan Eng

(Kuala Lumpur, Wednesday): Today Abdullah said that he would not be influenced by t he return of opposition figure Datuk Seri Anwar Ibrahim to active politics in April 15 2007 when he is qualified to contest would not tempt him to call an early polls.  No one believes Abdullah when he said that he would not call for early elections before Anwar is qualified to run on April 15 2007.

If Abdullah wants to be fair, let him declare that party polls will be held after April 15 2007. If no early polls, why does the BN component parties postpone party polls to face general elections? The writing is clearly seen on the wall of an early general election by the end of this year to March 2007.

Prime Minister Datuk Seri Abdullah Ahmad Badawi had said that there is a feel-good factor in our economy, so good that it is conducive to call for an early general election. Abdullah replied that times are not good enough and can even be better before he calls for early elections. I doubt that there can be any better economic news that he can give.  

The RM 1.07 trillion total trade for 2006 is not an inspiration, but a false dawn of good economic times that does not benefit Malaysian workers when many for the first time did not even receive 2006 annual bonuses

How can Abdullah claim that he RM 1.07 trillion total trade for 2006 is an inspiring achievement when there is no sense of well-being amongst Malaysians that business is booming or that pay is rising and does not benefit Malaysian workers when many for the first time did not even receive 2006 annual bonuses?

I have received many complaints from ordinary retail businesses that this year's Chinese New Year is worse than last year and many can not understand how the economy can be performing as well as claimed by the government. For workers it is worse as many from multi-national companies and even listed companies failed to pay annual bonuses for the first time in history. Many believe that talk of good economy is just a propaganda exercise to deceive the public in preparation for the coming general elections.

If the Prime Minister is inspired by the performance of the economy, why is it that many Malaysian small businessmen and workers are not equally inspired? According to the Ninth Malaysian Plan (9MP), the mean monthly household income for a Malaysian family was RM 3,249 in 2004. This is misleading as it is doubtful that a Malaysian family would have even a monthly household income of RM 3,249 now.  

With the economy performing at such an "inspiring" level in 2006, the mean monthly household income should even be higher. But does every Malaysian family get to enjoy the fruits of the country's economic success equally with a mean monthly household income of more than RM 3,249?

The answer is in the United Nat ions Human Development Report which consistently list Malaysians as suffering the worst income inequality between the rich and poor in South-East Asia . The 9MP shows the share of income of the bottom 40% of the population declined from 14.5% in 1990 to 13.5% in 2004 whilst the share of the top 20% of the population increased from 50% in 1990 to 51.2% in 2004.

Instead of us declaring that economic times are not as good as it appears, this forum today is intended to hear it from you. I want to concentrate on highlighting those who are really feeling good.

Works Minister Datuk S. Samy Vellu and highway toll companies

Works Minister Datuk Samy Vellu feels good when highway toll companies feel good. And highway toll companies are feeling ecstatic with huge extraordinary profits. In a written reply in Parliament on 20.3.3007 to Teresa Kok (DAP – Seputeh) and Tan Kok Wai (DAP – Cheras), Samy Vellu said that the North-South Expressway concessionaire PLUS enjoyed a 50 year concession period. Since it was completed in 1988, it had collected RM 15.91 billion in toll by 2006 – RM 9.87 billion more than the cost to build it. However, it only made a profit of RM4.03 billion after taking into consideration the maintenance costs.

Samy Vellu said the total toll collections for all 19 highways until last year was RM 23.656 billion and the overall cost to build them was RM 18.93 billion. In other words, even before the concession had ended, toll companies have already got back their construction cost and have an excess of RM 4,726 million.

Why does the government not undertake to build the highways themselves when common sense dictates it is cheaper to do so? Further this sum collected does not include the government's compensation of RM 38.5 billion to the toll companies since 2006 to defer toll hikes or imposition of tolls. Toll collections of RM 23.7 billion and government compensation of RM 38.5 billion would result in total collection of RM 62.2 billion as compared to construction cost of RM 18.9 billion- an excess of RM 43.3 billion.

Even after taking into account the maintenance costs, toll highways companies would be raking in tens of billions of ringgit in profits. No wonder this privatization exercise is an act of piratisation of public resources that is against national interests.

Incompetent and shoddy contractors of government projects that caused the government to bail out 7 ailing privatised projects for RM 11 billion last year

Incompetent and shoddy contractors of government project that abandon or delay government projects also have a reason to feel good, especially those who had 7 ailing privatized projects bailed out by the government last year for RM 11 billion.

Deputy Minister in the Prime Minister's Department Senator Datuk Abdul Rahman Suliman told the Dewan Rakyat   in December last year that the government spent more than RM11.022 billion to rescue seven ailing privatised ventures over the past five years as follows:-

·        the Putra transport system, which cost RM4.486 billion;

·        the STAR-LRT bailout costing RM3.256 billion;

·        MAS bailout costing RM2.802 billion respectively;

·        the takeover of the National Sewerage System costing RM192.54 million;

·        the Seremban-Port Dickson Highway costing RM142 million;

·        the Kuching Prison costing RM135 million; and

·        the Unit Kajian Makanan dan Gunaan Orang Islam costing RM8.3 million.

The original cost of these sick 7 privatised projects amounts to RM 15.864 million. In other words spending an extra RM 11,022 million represents an extra 70% of the original cost, far above the variance of 5-10% for construction projects.

Others projects are the RM120 million Middle Ring Road 2, where an additional RM70 million had to be paid for repair work; the RM167 million Matrade building which was eventually completed at a cost of RM287 million; and the RM198 million Navy Recruit Training Centre (Pularek) which had 7,032 defects and needed an additional RM13 million.  

Morgan Stanley Estimates US$100 Billion Losses From Corruption Since 1980s  

Three, what about those allegations of financial scandals attending failed privatized ventures such as the twin RM 3.5 billion Bumiputra Finance scandals or RM 5 billion Perwaja scandals? In Time Asia magazine issue on March 15 2004, South East Asian economist at Morgan Stanley in Singapore Daniel Lian, figures "that the country may have lost as much as U$$100 billion or RM 380 billion since the early 1980s to corruption."

If Malaysia lost RM 380 billion to corruption both from privatized and government ventures during Mahathir's 22 year old reign, the situation now could have worsened. When Mahathir stepped down as Prime Minister in 2003, Malaysia's ranking was No. 37 under the Transparency International Corruption Perceptions Index. And Morgan Stanley estimated RM 380 billion losses due to corruption during that period.

Three years later, Malaysia 's corruption ranking has deteriorated to No. 44 in 2006. By slipping down 7 places during Abdullah's rule as Prime Minister, many fear that corruption has worsened and the cost to the nation may be even higher than during Mahathir's era.