A new cold war in trade wars also is a tech war and currency war now !

https://youtu.be/gUR250IZyj0

China Has Not Manipulated the Yuan, PIIE's Bergsten Says

https://youtu.be/WFhtHy3hZcg

https://youtu.be/2Nzb8cOn6EY

Huawei rolls out Plan B amid US pressure

China urged the US to stop its unfair and discriminatory treatment of Chinese firms following the US government moves to ban on Wednesday federal purchases of telecommunications equipment from five
Huawei's HarmonyOS unveiled: Could it catch on?
 
https://youtu.be/JrDKlrgEtjI


China warns the U.S. of tariff 'countermeasures'

https://youtu.be/j8Dd4bjCfTU

Poised for correction: A file picture showing a woman walking by an electronic stock board of a securities firm in Tokyo. After 10 years of continued rise in asset prices, markets are poised for correction. — AP

Tariffs are here to stay and likely to disrupt the 10-year economic cycle

IF investors ever needed a reminder that not all is right with the equities market, the shock waves the world capital markets, including Bursa Malaysia, had to endure earlier this week are proof enough.

Most stock markets are at the tailend of a 10-year bull run, although the same cannot be said for Bursa Malaysia which has generally has been more bearish than others in the last five years. Going by the current trends, Bursa Malaysia is likely to finish the year lower, which if it happens will be the fourth time in the last five years.

But the leading platform in the world which sets the pace for global flow of capital – the Wall Street – has been hitting new highs although it corrects from time to time largely due to the tweets from President Donald Trump.

Wall Street’s run started in May 2009 and seems to have the strength to carry on for a few more legs, defying conventional logic that economic boom-bust cycles corrects after 10 years. Other stock markets have had good and bad times since 2009 but the US has been consistently on the rise.

The benchmark Dow Jones Industrial Average, the Nasdaq and S&P 500, which charts the broader market, have all hit news highs. Bursa Malaysia on the other hand has languished between the 1, 600 and 1, 700 levels, with only one year of positive returns since 2014.

There are several reasons for Bursa Malaysia’s poor performance compared with other markets. For instance, the United States slashed tax rates, which spurred earnings of companies and has the best technology companies listed there. It’s not the same elsewhere in the world.

Nevertheless, after 10 years of continued rise in asset prices due to the combination of a low interest rate environment and advancement in technology, the markets are poised for correction. Until earlier this week, nobody had an inkling of an idea where and how the correction will take place.

However, after President’s Trump latest statement that the US would impose 10% tariff on an additional US$300bil worth of exports from China, it clearly underlines that the trade war is here to stay.

If anybody had a view that the trade war would end if President Trump does not retain his position in the US elections next year, they are wrong. Even some Democrats are leaning towards imposing tariff as measure to help the US keep its competitive edge in the world economy.

Reverse globalisation is no longer a bad word in world trade.

A 25% tariff has already been imposed on US$250bil worth of China’s exports to the United States since March this year.

It is bringing in billions to the US coffers with some going towards helping the farmers overcome the woes of the trade war. The person who takes over from Trump is not likely to dismantle the structure.

Any other president will want to get more from China, which is led by the influential President Xi Jinping, who is seen as the most powerful man that rules the second biggest economy in the world after the late chairman Mao Zedong.

China has retaliated by imposing tariffs on US$110bil worth of imports from the US so far including the produce from farms. It has also allowed the yuan to weaken, sparking concerns that the trade war is evolving into a currency war.Latest data from China shows that the exports are still growing and imports dropping in July even though there is a trade war, suggesting that President Xi will not yield to pressure from the US easily.

A new cold war in the form of the trade war has emerged. As a result, it has caused upheavals in the capital markets that should worry investors.

There have been significant shifts in asset prices from bonds to equities and commodities such as oil. Among all asset classes, dramatic movement in bond prices of government debt papers is the first to feel the impact from the trade war.

This is on the back of increasing certainty that the Federal Reserve and other major central banks will reduce interest rates more aggressively to stimulate the sagging economy. It has caused for money to seek safe haven such as US government debt papers.

For instance the yields on the 10-year US debt paper is 1.69% now. It was 1.9% a week ago and 2.06% a month ago. The yields moves inversely with the price of the bonds.

The yields on the five- and two-year government debt papers have also moved by up 18 points in the last one week. Such movements on billions of dollars will have an impact in the months to come.

The trade war has caused a major disruption in the global supply chain, evidence of the economy slowing globally.

If anybody wants any evidence of the disruption in global supply chain, they only need to go to the KLIA cargo complex and see for themselves the number of idle lorries that do not have enough cargo to move about.

In Malaysia’s case, apart from a slowdown in movement of goods around the world, the uncertainties in Hong Kong have exacerbated the situation.

The combined effects of the trade war, China’s economic uncertainties and Hong Kong’s future as Asia’s financial hub will only be felt in the fourth quarter of this year.

Until then, asset prices will continue to adjust to the new norm.

The views expressed here are solely that of the writer. Source link 

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The cost and funding of the Hong Kong violence in CIA innumerable US regime-change, a price on freedom

Protesters in protective gear holding up a symbolic yellow umbrella and an American flag while marching through the Sha Tin District in Hong Kong earlier in the month. Sights such as these are fuelling speculation about foreign involvement in the ongoing protests. — AP

https://youtu.be/huXI39jtq1s - Thousands rally to denounce violence and support Hong Kong police

https://youtu.be/tOw6kfhS1Ns - Annie Wu: Young HK people need to learn to become Chinese

There’s no such thing as a free lunch, and likewise, in the pursuit of democracy, there will always be casualties.

ONE of the most avid speculations about the Hong Kong protests is whether the CIA is involved, and this talk is fuelled, no less, by warnings from the Chinese to the US to keep out of Hong Kong’s affairs.

Last week, former HK chief executive Tung Chee-hwa was more ominous, openly accusing the US and Taiwan of orchestrating “well-organised” recent protests.

The first retaliatory strike from China on Taiwan was the ban on solo travellers, involving 47 mainland cities to Taiwan, which will cost the island state US$900mil (RM3.75bil) in tourism dollars by January.

Let’s look at these accusations rationally, though. It’s impossible for the CIA to hire such a massive crowd in Hong Kong.

The anger is real, though, and the spontaneity of the protests speaks for itself.

There has been growing frustration among the people, especially the younger generation, over what they see as the decline in living standards, and many now don’t see a future in the city.

The amendment to the Extradition Law has touched a nerve among HK citizens because many perceive they would not get justice or due legal rights under China’s mainland rule.

Let’s put it this way, the judicial independence in China isn’t ranked highly by international standards, and even Chinese nationals complain about it.

HK citizens are concerned that their city will be like any other mainland Chinese city, where the citizens’ freedom could be compromised, although one wonders how many of these protesters truly believe they would ever get extradited to China in the first place.

The Bill is, essentially, a manifestation of the frustrations that have built up, and its timing allowed for that volcanic eruption of anger.

It’s unlikely the young protesters were aware that HK has, in fact, extradition agreements with 20 countries, including Britain and the United States. From China’s point of view, why can’t there be one with the mainland?

Against this backdrop, with students on summer holidays, the perfect concoction was created, building up a massive protest for an international audience.

The timing couldn’t have been worse for HK chief executive Carrie Lam to push the Bill through – this is the season of protests, coinciding with the anniversaries of the Tiananmen Square incident and British handover of HK to China on July 1, 1997.

By now, it’s clear that Lam is a technocrat who isn’t politically savvy, and her lack of learned leadership during a crisis shows her shortcomings in being the best person to helm HK, even though China continues to back her.

The Bill has been suspended since June 15 until further notice, but not withdrawn. She has said the legislation process was a complete failure and that “the Bill is dead”, but she hasn’t enacted any legislative process to withdraw the proposal either.

So protests will likely continue, but nothing is free, and that includes the business of organising well-planned weekly protests.

Over the past month, the media has been reporting that groups involved in the protests have received significant funding from the National Endowment for Democracy (NED), “a CIA soft-power cut-out that has played a critical role in innumerable US regime-change operations, ” according to writer Alexander Rubinstein.

The report claimed that the NED has four main branches, at least two of which are active in Hong Kong: the Solidarity Center (SC) and National Democratic Institute (NDI).

“The latter has been active in Hong Kong since 1997, and NED funding for Hong Kong-based groups has been consistent, ” Louisa Greve, vice president of programmes for Asia, Middle East and North Africa, was quoted.

While NED funding for groups in Hong Kong goes back to 1994, 1997 was when the British returned the territory to China, it was reported.

The report said in 2018, NED granted US$155, 000 (RM645, 885) to SC and US$200, 000 (RM833, 400) to NDI for work in Hong Kong, and US$90, 000 (RM375, 000) to Hong Kong Human Rights Monitor (HKHRM), which isn’t a branch of NED, but a partner in Hong Kong. Between 1995 and 2013, HKHRM received more than US$1.9mil (RM7.9mil) in funds from the NED.

This isn’t the first time the NED’s name has cropped up either.

During the 2014 Occupy protests, the spectre of NED in the protests and the foreign philosophies it represented also came up.

The NED was set up in 1983 to channel grants for “promoting democracy” and it’s said that it receives US$100mil (RM416mil) annually from the relevant agencies.

Hong Kong media tycoon Jimmy Lai has also been accused of funding the protests. He has taken it a step further by meeting US Vice President Mike Pence and Secretary of State Mike Pompeo in Washington DC to discuss the Bill and the city’s situation.

Lai is the owner of Next Digital, which publishes both the pro-democracy Apple Daily and Next Magazine, among others.

Predictably, the Chinese Foreign Ministry in Hong Kong issued a statement saying it has lodged a solemn representation at the US Consulate General in Hong Kong to ask the US to stop its “mistaken words and deeds”.

A spokesperson for the local Commissioner’s Office said that it strongly opposed foreign forces interfering in Hong Kong’s affairs.

“The US side clearly knows who Jimmy Lai is, what his stance is, and what his role is in Hong Kong society. Top US government officials have ulterior motives and sent a seriously wrong signal when they queued up to meet such a person at this sensitive time of Hong Kong – we express our strong discontent and opposition, ” it said.

In 2014, the South China Morning Post reported that Lai spent millions funding the Occupy Central protests.

The SCMP reported that Lai’s group offered extensive advice – including propaganda material – to the Occupy Central organisers, whom Lai dismissed in private as “idealist scholars” who “couldn’t make the cut without help”.

The emails were leaked by the same person who sent documents detailing the Next Media chairman’s political donations to various pan-democrats two weeks ago. It isn’t clear how the documents were obtained, though.

One of the exchanges between Lai and his top aide, Mark Simon, indicates that Lai spent some HK$3mil (RM1.6mil) to HK$3.5mil (RM1.8mil) to help the plebiscite. The email did not detail how the money was spent, only mentioning that the costs included “advertisements and billboards”.

In a rebuttal, Lai said that while he had donated large sums of money to politicians in the pro-democracy camp, he had not given a cent to the co-founders of Occupy Central. His newspaper, though, had given the movement discounts for advertisements.

China cannot be faulted for seeing shadows of foreign influence in the protests. It doesn’t help that protesters, pressing for independence, are waving colonial British and US flags, and what began as peaceful protests has now degenerated into riots, a term the demonstrators have also challenged and protested.

There is much irony in the HK protests. The late kung fu legend, Bruce Lee, has become an icon in the protests because of his philosophical advice to “be formless, shapeless, like water, ” in his role as Li Tsung, a martial-arts instructor in Longstreet, a US TV series.

Basically, the protesters should take on the HK police with a new tactic: formless, shapeless protests in scattered parts of the territory, aimed at wearing the authorities down.

But older folks like me would probably remember a better scene in the movie Fist Of Fury, where he kicked and smashed a sign at the gate of Huangpu Park which read, “No dogs and Chinese allowed”. The park in Shanghai was closed to the Chinese between 1890 and 1928.

It has been said, according to some reports, period photographs show a sign listing 10 regulations, the first of which was that “The Gardens are reserved for the Foreign Community”, with the fourth being “Dogs and bicycles are not admitted”. Any way you cut it; the Chinese weren’t allowed in the foreign settlement.

What has happened in HK is that the protests’ demands have grown exponentially, bordering on calls to be independent and free from China. Tragically, it has also become more violent by the day.

In calling for freedom of speech, citizens who disagreed with the protesters have found themselves beaten up, which seems to go against the grain.

When violence committed on the police and those who disagree are embraced or encouraged as part of a democratic process, and the destruction of public properties is accepted as a minor price for freedom, then something has gone badly wrong.

By Wong Chun Wai who began his career as a journalist in Penang, and has served The Star for over 35 years in various capacities and roles. He is now editorial and corporate affairs adviser to the group, after having served as group managing director/chief executive officer. On The Beat made its debut on Feb 23 1997 and Chun Wai has penned the column weekly without a break, except for the occasional press holiday when the paper was not published. In May 2011, a compilation of selected articles of On The Beat was published as a book and launched in conjunction with his 50th birthday. Chun Wai also comments on current issues in The Star.

chunwai@thestar.com.my https://twitter.com/chunwai09 http://www.wongchunwai.com/

Related News

---

China faces dilemma over Hong Kong

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The cost and funding of the Hong Kong violence in CIA innumerable US regime-change, a price on freedom

Protesters in protective gear holding up a symbolic yellow umbrella and an American flag while marching through the Sha Tin District in Hong Kong earlier in the month. Sights such as these are fuelling speculation about foreign involvement in the ongoing protests. — AP

Inside America's Meddling Machine: NED, the US-Funded Org Interfering in Elections Across the Globe

https://youtu.be/NzIJ25ob1aA

https://youtu.be/huXI39jtq1s - Thousands rally to denounce violence and support Hong Kong police

https://youtu.be/tOw6kfhS1Ns - Annie Wu: Young HK people need to learn to become Chinese

There’s no such thing as a free lunch, and likewise, in the pursuit of democracy, there will always be casualties.

ONE of the most avid speculations about the Hong Kong protests is whether the CIA is involved, and this talk is fuelled, no less, by warnings from the Chinese to the US to keep out of Hong Kong’s affairs.

Last week, former HK chief executive Tung Chee-hwa was more ominous, openly accusing the US and Taiwan of orchestrating “well-organised” recent protests.

The first retaliatory strike from China on Taiwan was the ban on solo travellers, involving 47 mainland cities to Taiwan, which will cost the island state US$900mil (RM3.75bil) in tourism dollars by January.

Let’s look at these accusations rationally, though. It’s impossible for the CIA to hire such a massive crowd in Hong Kong.

The anger is real, though, and the spontaneity of the protests speaks for itself.

There has been growing frustration among the people, especially the younger generation, over what they see as the decline in living standards, and many now don’t see a future in the city.

The amendment to the Extradition Law has touched a nerve among HK citizens because many perceive they would not get justice or due legal rights under China’s mainland rule.

Let’s put it this way, the judicial independence in China isn’t ranked highly by international standards, and even Chinese nationals complain about it.

HK citizens are concerned that their city will be like any other mainland Chinese city, where the citizens’ freedom could be compromised, although one wonders how many of these protesters truly believe they would ever get extradited to China in the first place.

The Bill is, essentially, a manifestation of the frustrations that have built up, and its timing allowed for that volcanic eruption of anger.

It’s unlikely the young protesters were aware that HK has, in fact, extradition agreements with 20 countries, including Britain and the United States. From China’s point of view, why can’t there be one with the mainland?

Against this backdrop, with students on summer holidays, the perfect concoction was created, building up a massive protest for an international audience.

The timing couldn’t have been worse for HK chief executive Carrie Lam to push the Bill through – this is the season of protests, coinciding with the anniversaries of the Tiananmen Square incident and British handover of HK to China on July 1, 1997.

By now, it’s clear that Lam is a technocrat who isn’t politically savvy, and her lack of learned leadership during a crisis shows her shortcomings in being the best person to helm HK, even though China continues to back her.

The Bill has been suspended since June 15 until further notice, but not withdrawn. She has said the legislation process was a complete failure and that “the Bill is dead”, but she hasn’t enacted any legislative process to withdraw the proposal either.

So protests will likely continue, but nothing is free, and that includes the business of organising well-planned weekly protests.

Over the past month, the media has been reporting that groups involved in the protests have received significant funding from the National Endowment for Democracy (NED), “a CIA soft-power cut-out that has played a critical role in innumerable US regime-change operations, ” according to writer Alexander Rubinstein.

The report claimed that the NED has four main branches, at least two of which are active in Hong Kong: the Solidarity Center (SC) and National Democratic Institute (NDI).

“The latter has been active in Hong Kong since 1997, and NED funding for Hong Kong-based groups has been consistent, ” Louisa Greve, vice president of programmes for Asia, Middle East and North Africa, was quoted.

While NED funding for groups in Hong Kong goes back to 1994, 1997 was when the British returned the territory to China, it was reported.

The report said in 2018, NED granted US$155, 000 (RM645, 885) to SC and US$200, 000 (RM833, 400) to NDI for work in Hong Kong, and US$90, 000 (RM375, 000) to Hong Kong Human Rights Monitor (HKHRM), which isn’t a branch of NED, but a partner in Hong Kong. Between 1995 and 2013, HKHRM received more than US$1.9mil (RM7.9mil) in funds from the NED.

This isn’t the first time the NED’s name has cropped up either.

During the 2014 Occupy protests, the spectre of NED in the protests and the foreign philosophies it represented also came up.

The NED was set up in 1983 to channel grants for “promoting democracy” and it’s said that it receives US$100mil (RM416mil) annually from the relevant agencies.

Hong Kong media tycoon Jimmy Lai has also been accused of funding the protests. He has taken it a step further by meeting US Vice President Mike Pence and Secretary of State Mike Pompeo in Washington DC to discuss the Bill and the city’s situation.

Lai is the owner of Next Digital, which publishes both the pro-democracy Apple Daily and Next Magazine, among others.

Predictably, the Chinese Foreign Ministry in Hong Kong issued a statement saying it has lodged a solemn representation at the US Consulate General in Hong Kong to ask the US to stop its “mistaken words and deeds”.

A spokesperson for the local Commissioner’s Office said that it strongly opposed foreign forces interfering in Hong Kong’s affairs.

“The US side clearly knows who Jimmy Lai is, what his stance is, and what his role is in Hong Kong society. Top US government officials have ulterior motives and sent a seriously wrong signal when they queued up to meet such a person at this sensitive time of Hong Kong – we express our strong discontent and opposition, ” it said.

In 2014, the South China Morning Post reported that Lai spent millions funding the Occupy Central protests.

The SCMP reported that Lai’s group offered extensive advice – including propaganda material – to the Occupy Central organisers, whom Lai dismissed in private as “idealist scholars” who “couldn’t make the cut without help”.

The emails were leaked by the same person who sent documents detailing the Next Media chairman’s political donations to various pan-democrats two weeks ago. It isn’t clear how the documents were obtained, though.

One of the exchanges between Lai and his top aide, Mark Simon, indicates that Lai spent some HK$3mil (RM1.6mil) to HK$3.5mil (RM1.8mil) to help the plebiscite. The email did not detail how the money was spent, only mentioning that the costs included “advertisements and billboards”.

In a rebuttal, Lai said that while he had donated large sums of money to politicians in the pro-democracy camp, he had not given a cent to the co-founders of Occupy Central. His newspaper, though, had given the movement discounts for advertisements.

China cannot be faulted for seeing shadows of foreign influence in the protests. It doesn’t help that protesters, pressing for independence, are waving colonial British and US flags, and what began as peaceful protests has now degenerated into riots, a term the demonstrators have also challenged and protested.

There is much irony in the HK protests. The late kung fu legend, Bruce Lee, has become an icon in the protests because of his philosophical advice to “be formless, shapeless, like water, ” in his role as Li Tsung, a martial-arts instructor in Longstreet, a US TV series.

Basically, the protesters should take on the HK police with a new tactic: formless, shapeless protests in scattered parts of the territory, aimed at wearing the authorities down.

But older folks like me would probably remember a better scene in the movie Fist Of Fury, where he kicked and smashed a sign at the gate of Huangpu Park which read, “No dogs and Chinese allowed”. The park in Shanghai was closed to the Chinese between 1890 and 1928.

It has been said, according to some reports, period photographs show a sign listing 10 regulations, the first of which was that “The Gardens are reserved for the Foreign Community”, with the fourth being “Dogs and bicycles are not admitted”. Any way you cut it; the Chinese weren’t allowed in the foreign settlement.

What has happened in HK is that the protests’ demands have grown exponentially, bordering on calls to be independent and free from China. Tragically, it has also become more violent by the day.

In calling for freedom of speech, citizens who disagreed with the protesters have found themselves beaten up, which seems to go against the grain.

When violence committed on the police and those who disagree are embraced or encouraged as part of a democratic process, and the destruction of public properties is accepted as a minor price for freedom, then something has gone badly wrong.

By Wong Chun Wai who began his career as a journalist in Penang, and has served The Star for over 35 years in various capacities and roles. He is now editorial and corporate affairs adviser to the group, after having served as group managing director/chief executive officer. On The Beat made its debut on Feb 23 1997 and Chun Wai has penned the column weekly without a break, except for the occasional press holiday when the paper was not published. In May 2011, a compilation of selected articles of On The Beat was published as a book and launched in conjunction with his 50th birthday. Chun Wai also comments on current issues in The Star.

chunwai@thestar.com.my https://twitter.com/chunwai09 http://www.wongchunwai.com/

Related News

HK violence reveals hidden agenda fueled by evil intentions

Those responsible for orchestrating such violence have combined criminal behavior with protesting so they can destroy Hong Kong.

US operates thuggish diplomacy in Hong Kong

The US “ringleader” plays dirty tricks, but it does not have Hong Kong's governing rights. As Hong Kong's patriotic groups bravely stands out with the support of central government, conspiracy will be smashed, turmoil will be ended and rioters will be punished by law. Source: Global Times | 2019/8/9 17:13:40

---

China faces dilemma over Hong Kong

Hong Kong police make fresh arrests, city braces for further protests

Hong Kong protesters appear in court to face riot charges

Related posts:

Hong Kong in decline

China orders US to remove ‘black hands’ from Hong Kong

Hong Kong's social problems stem from British rule, faces risk of Beijing rule as UK's ‘toothless threat’ against China

State of GLCs a matter for concern

A MAJOR topic at the inaugural Malaysian Economic Symposium held on July 26 at the Parliament Complex was government-linked companies (GLCs). The big issues about GLCs are not only their large presence in the economy but also their governance.

As mentioned in the symposium, which was jointly organised by the Office of the Speaker of the Dewan Rakyat, the Backbenchers Council and the Parliamentary Caucus on Reform and Governance to get a deeper understanding of the challenges facing the economy, there are so many GLCs that nobody knows what the total number is. The other concern is their lack of transparency and accountability.

About 15 years ago, the then prime minister launched the GLC Transformation Programme to raise the standards of corporate governance in government-linked companies following the guidelines issued by the Securities Commission and Bank Negara Malaysia, as part of the reforms to make the economy more resilient to external shocks.

The New Economic Model report to the National Economic Action Council also stressed the need to reform GLCs so that they do not affect adversely the efficiency and competitiveness of the economy and become an obstacle towards making Malaysia a fully developed high income country.

Khazanah Nasional, Employees Provident Fund (EPF) and Permodalan Nasional Berhad (PNB) adopted these guidelines to strengthen their internal checks and balance and make their major GLCs more attractive to local and foreign investors. Good governance in the companies owned by these three national institutions is important as their shareholdings in the corporate sector account for a big share of the market capitalisation.

Further, as the country’s national wealth fund, Khazanah realised its responsibility as an MoF (Ministry of Finance) Inc corporation to set the tone for good governance.

EPF and PNB are responsible for paying good dividends to millions of their subscribers. Like Khazanah, they too insist on their investee companies to adopt good governance practices so that when they do well in the market place, the benefits will go to their subscribers.

One of the important guidelines in good corporate governance is that the board of directors should be evaluated on the “fit and proper“ criteria before they are appointed. One major requirement in the criteria is that the nominee for board appointment should not be politically connected or linked so as to protect the independence of the board from outside interference.

A good board should have the committees on audit, nomination, renumeration and risk management actively checking the management and also providing it with professional advice and recommendations.

The presentation by the university professor at the symposium highlighted the political links of GLCs, with many ministries involved in overseeing them. Thus, the ministries dealing with rural and land development, technology and research, tourism, sports, youth and culture are among the ministries which have GLCs to implement their policies and projects.

Ministerial influence on the GLCs is not always good. The federal GLCs are MoF Inc in ownership but administratively, they answer to the ministers. Often, the GLCs have bumiputra partners who are linked to the top circles or their own relatives in forming joint venture business to provide the privatised services to the ministry. With the political connections, the contract prices that the ministry pays to the GLCs for supplying the work orders or purchases may well be above the market price. The GLCs are thus operating at the expense of taxpayers.

Some politicians use GLCs and trustee foundations under religious authorities to promote their political activities under the guise of CSR (corporate social responsibility), like sending pilgrims to Mekah, sponsoring religious events, building surau or paying for goodwill golf trips overseas, including their wives’ travel costs.

States also have their GLCs established as Mentri Besar Inc companies or as subsidiaries of statutory bodies like state economic development corporations (SEDC) and state agricultural development corporations. Many of these GLCs have joint ventures with bumiputra partners who are politically linked. Malay property developers have raised issues over the SEDCs which build shop lots and commercial buildings at lower cost because they get priority access to state land and often at lower than market price, thus undercutting the genuine Malay private sector.

The Pakatan Harapan government has pledged that the appointments to GLCs will be non-political in the sense that politically active persons will not be appointed as directors of the companies. The government wants to bring professionals to serve on the GLC boards to improve their performance. The definition “non- political“ should include persons holding any kind of party positions because those at the lower levels can be just as ambitious in using the GLCs for gaining influence among the top leaders.

Some professionals have left active politics but remain advisers to a political party or are business associates with high-ranking politicians or are married into powerful political families. It's not clear whether such professionals can be considered as independent or free from politics.

A good board should respect the views of its committees on nomination, remuneration, audit and risk management. These committees are mandatory for listed companies and banks as the Securities Commission and Bank Negara are very strict about good corporate governance to provide the internal checks and balance to prevent the board from making wrong decisions or from being influenced by the chairman’s personal or political interests.

The government should make it compulsory for all GLCs to be similarly regulated, especially those under the control of state governments and statutory bodies as they are highly politicised.

Business associations have always complained in every dialogue with the government that the GLC sector is too large and is crowding out the private sector. As growth is fundamental so that more wealth can be created in the economy to generate the resources for the government to spend on the poor, it should consider reducing the size of the GLC sector so as to strengthen the investment climate and provide more room for the private sector to expand locally. Those GLCs that are a financial burden to taxpayers should be closed down or sold off before they cause a financial crisis to the country.

Tan Sri Mohd Sheriff Mohd Kassm Kuala Lumpur


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