While Malaysia fiddles, its opportunities are running
dry
Michael Backman (The Age)
November 15, 2006
MALAYSIA'S been at it again, arguing about what
proportion of the economy each of its two main races
the Malays and the Chinese owns. It's an argument
that's been running for 40 years. That wealth
and race are not synonymous is important for national
cohesion, but
really it's time Malaysia grew up.
It's a tough world out there and there can be little
sympathy for a
country that prefers to argue about how to divide
wealth rather than
get on with the job of creating it.
The long-held aim is for 30 per cent of corporate
equity to be in Malay hands, but the figure that the
Government uses to justify handing over huge swathes
of public companies to Malays but not to
other races is absurd. It bases its figure on equity
valued, not at market value, but at par value.
Many shares have a par value of say $1 but a market
value of $12.
And so the Government figure (18.9 per cent is the
most recent
figure) is a gross underestimate. Last month a paper
by a researcher
at a local think-tank came up with a figure of 45 per
cent based on
actual stock prices. All hell broke loose. The paper
was withdrawn
and the researcher resigned in protest. Part of the
problem is that
he is Chinese.
"Malaysia boleh!" is Malaysia's national catch cry. It
translates
to "Malaysia can!" and Malaysia certainly can. Few
countries are as
good at wasting money. It is richly endowed with
natural resources
and the national obsession seems to be to extract
these, sell them
off and then collectively spray the proceeds up
against the wall.
This all happens in the context of Malaysia's grossly
inflated sense
of its place in the world.
Most Malaysians are convinced that the eyes of the
world are on
their country and that their leaders are world
figures. This is
thanks to Malaysia's tame media and the bravado of
former prime
minister Mahathir Mohamad. The truth is, few people on
the streets
of London or New York could point to Malaysia on a map
much less
name its prime minister or capital city.
As if to make this point, a recent episode of The
Simpsons features
a newsreader trying to announce that a tidal wave had
hit some place
called Kuala Lumpur. He couldn't pronounce the city's
name and so
made up one, as if no-one cared anyway. But the joke
was on the
script writers Kuala Lumpur is inland.
Petronas, the national oil company is well run,
particularly when
compared to the disaster that passes for a national
oil company in
neighbouring Indonesia. But in some respects, this is
Malaysia's
problem. The very success of Petronas means that it is
used to
underwrite all manner of excess.
The KLCC development in central Kuala Lumpur is an
example. It
includes the Twin Towers, the tallest buildings in the
world when
they were built, which was their point.
It certainly wasn't that there was an office shortage
in Kuala
Lumpur there wasn't.
Malaysians are very proud of these towers. Goodness
knows why. They
had little to do with them. The money for them came
out of the
ground and the engineering was contracted out to South
Korean
companies.
They don't even run the shopping centre that's beneath
them. That's
handled by Australia's Westfield.
Next year, a Malaysian astronaut will go into space
aboard a Russian
rocket the first Malay in space. And the cost? $RM95
million
($A34.3 million), to be footed by Malaysian taxpayers.
The Science
and Technology Minister has said that a moon landing
in 2020 is the
next target, aboard a US flight. There's no indication
of what the
Americans will charge for this, assuming there's even
a chance that
they will consider it. But what is Malaysia getting by
using the
space programs of others as a taxi service? There are
no obvious
technical benefits, but no doubt Malaysians will be
told once again,
that they are "boleh". The trouble is, they're not.
It's not their
space program.
Back in July, the Government announced that it would
spend $RM490
million on a sports complex near the London Olympics
site so that
Malaysian athletes can train there and "get used to
cold weather".
But the summer Olympics are held in the summer.
So what is the complex's real purpose? The dozens of
goodwill
missions by ministers and bureaucrats to London to
check on the
centre's construction and then on the athletes while
they train
might provide a clue.
Bank bale outs, a formula one racing track, an entire
new capital
city Petronas has paid for them all. It's been an
orgy of nonsense
that Malaysia can ill afford.
Why? Because Malaysia's oil will run out in about 19
years. As it
is, Malaysia will become a net oil importer in 2011
that's just
five years away.
So it's in this context that the latest debate about
race and wealth
is so sad.
It is time to move on, time to prepare the economy for
life after
oil. But, like Nero fiddling while Rome burned, the
Malaysian
Government is more interested in stunts like sending a
Malaysian
into space when Malaysia's inadequate schools could
have done with
the cash, and arguing about wealth distribution using
transparently
ridiculous statistics.
That's not Malaysia "boleh", that's Malaysia "bodoh"
(stupid).
........
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