Thursday, 22 April 2021

Why Do Incompetent Men Become Leaders?


Historically, most of our leaders have been men. Men are generally perceived as better leaders, even by women. But this is not always the case. There are still many leader roles out there played by incompetent men, and the reason is explained by Tomas Chamorro-Premuzic in his book, Why Do So Many Incompetent Men Become Leaders? (And How to Fix It).

Jakub Domerecki/EyeEm/Getty Images

The answer to why do so many incompetent men become leaders is similar to why are there so few women leaders. The three popular explanations are: (1) women are not capable; (2) women are not interested; (3) women are both interested and capable but unable to break the glass-ceiling: an invisible career barrier, based on prejudiced stereotypes. Conservatives and chauvinists tend to endorse the first; liberals and feminists prefer the third. But what if they all missed the big picture?

People in general commonly misinterpret displays of confidence as a sign of competence. Hence, we are fooled into believing that men are better leaders than women. In other words, when it comes to leadership, the only advantage that men have over women is the fact that manifestations of hubris – often masked as charisma or charm – are commonly mistaken for leadership potential, and that these occur more frequently in men than in women.

Men often think that they are much smarter than women. Yet arrogance and overconfidence are inversely related to leadership talent - the ability to build and maintain high-performing teams, and to inspire followers to set aside their selfish agendas in order to work for the common interest of the group. The best leaders are usually humble.

“Women are better leaders,” says Tomas. “I am not neutral on this. I am sexist in favour of women. Women have better people skills, more altruistic, better able to control their impulses. They outperform men in university at graduate and undergraduate levels.”

Tomas is not biased. The competency of women, in terms of leadership skills, has been proven in research. Jack Zenger and Joseph Folkman’s research concluded that women in leadership positions are perceived just as – if not more – competent as their male counterparts.

The analysis of thousands of 360-degree reviews shows that women outscored men on 17 of the 19 capabilities that differentiate excellent leaders from average or poor ones.


Women’s percentile

Men’s percentile

Takes initiative






Practices self-development



Drives for results



Displays high integrity and honesty



Develops others



Inspires and motivates others



Bold leadership



Builds relationships



Champions change



Establishes stretch goals



Collaboration and teamwork



Connects to the outside world



Communicates powerfully and prolifically



Solves problems and analyzes issues



Leadership speed






Technical or professional expertise



Develops strategic perspective



Note: The t-values of all data are statistically significant.

Source: Zenger Folkman 2019

When comparing confidence ratings for men and women, Jack Zenger and Joseph Folkman found a large difference in those under 25. As people age their confidence generally increases; surprisingly, over the age of 60 male confidence declines. According to the research, men gain just 8.5 percentile points in confidence from age 25 to their 60+ years. Women, on the other hand, gain 29 percentile points.

If 90% of the employees competing for the same position are male, and you are making the decision about who to promote, and you have a highly qualified female and a highly qualified male, what are you inclined to do? It may seem safer to choose the man.

Women are far more competent than they think they are. What they need are more opportunities to prove themselves and boost their self-confidence!



1.     Tomas Chamorro-Premuzic, Why Do So Many Incompetent Men Become Leaders? 22 August 2013, Harvard Business Review

2.     Jack Zenger and Joseph Folkman, Research: Women Score Higher Than Men in Most Leadership Skills, 25 June 2019, Harvard Business Review


Wednesday, 21 April 2021

What’s Blocking Malaysia to Reach High-Income Status?


Malaysia’s GNI per capita was at US$11,230 in 2019. The World Bank has projected Malaysia to join the club of high-income nations, but at a slower pace than its predecessors. What’s blocking Malaysia to achieve a high-income nation?

·       Malaysia’s total factor productivity lags behind most of its transitional peers.


Total factor productivity over time (1960=1)


·      Malaysia’s human capital is in line with what per capita income predictions, but it lags in quality of education and child stunting.


·  Malaysia’s institutional quality lags not just its aspirational peers, but also the expectations of its increasingly middleclass population. Malaysia does poorly versus its aspirational peers on international rankings of voice and accountability and control of corruption.


Worldwide Governance Indicators, 2018


     Inequality and poverty have fallen, but Malaysia remains more unequal compared to most peers. Economic growth in Malaysia has become less inclusive than in the past, compounding persistent disparities and fuelling a strong sense among the population that growth has not benefitted everyone equitably.

Inequality and income (2010-2017)

·    Malaysia’s fiscal policy is much less redistributive than those in high-income OECD countries and other comparators. Limited fiscal space prevents fiscal policy from being an effective tool for promoting shared prosperity.

In short, we need an overhaul of the education system, integrity in government/ private sector, less race-centric policies, better distributional mechanisms and a higher productive workforce to be a more competitive economy. Is there political will for this?


Aiming High: Navigating the next stage of Malaysia’s development, World Bank Group, 16 March 2021


Tuesday, 20 April 2021

Is Malaysia Fading in the Covid Fight?

Competing companies, tardy procurement, low signup rates has plagued Malaysia in the fight on Covid, according to John Berthelsen of Asia Sentinel (April 16, 2021).

Early on, Malaysia was one of Asia’s leaders. Cases are now surging across much of Southeast Asia, for instance in Brunei, Cambodia, Thailand, and other countries although all are far behind Indonesia and the Philippines. With nearly more than 9,000 cases in the past week, Malaysia’s weekly rise has hit 35 percent during that period, according to statistics compiled by the website Worldometer.

Clusters reported from February 22 – April 2, 2021 were 314. There were 9,316 Covid cases from the reported clusters. Could we not focus on factories and construction sites for movement control rather apply it on a national basis? Furthermore, our incidence of Covid and the deaths thereto are very low compared to others in the region.

The Ministry of Health has been seeking to identify reasons behind low take-up rates and are considering steps to boost vaccine registration. Malaysia has vaccinated only 3.2 percent of its population. The government has only recently concluded phase 1 of the vaccination program, involving medical and nonmedical front-liners.

Some sources have blamed much of the other problems in combating the coronavirus on the Director General of Health, Noor Hisham, who initially was regarded as being instrumental in keeping cases down but who now is widely disliked in government circles for being dictatorial although his public image remains positive.

“In a totally dysfunctional cabinet made up of incompetent ministers, he dictates what should be done and what cannot be done,” the report said, adding that his critics say he held off approving the Pfizer vaccine until well after the European Union, the United States and the United Kingdom had recognized it. Now, with a long line already having obtained supplies including Israel, Bhutan, and Singapore, which has vaccinated at least 28.5 percent of its citizens, and with many more competing for it, Malaysia is described by a source as “at the back of the queue.”

In Malaysia, the latest vaccination rate is 26,523 doses per day, on average. At this pace, it will take another 4.9 years to cover 75% of the population. Why can’t we allow private hospitals, clinics or even pharmacies to do the vaccination? How else can we speed up the process? That assumes we have the vaccines to distribute!

The problem is that “rich countries have cornered the Covid-19 market,” said Khairy Jamaluddin, the coordinating minister for Covid-19 immunization, in a prepared statement and as reported by Asia Sentinel. “Some rich countries have bought enough vaccines for their citizens three to five times over. Many pharmaceutical companies give preference to rich countries for obvious reasons. That is also why Malaysia has had to balance our vaccine portfolio to include Pfizer, AstraZeneca but also those from non-Western countries like Sinovac.” But the key problem is incompetence and self-interest.



1.     John Berthelsen, Malaysia Fades in Covid Fight, 16 April 2021, Asia Sentinel

2.     Where Are Covid-19 Clusters Found In Malaysia? 7 April 2021, CodeBlue

Monday, 19 April 2021

State Capitalism, Market Socialism or Progressive Capitalism?


The Biden administration has unveiled a US$ 2 trillion in infrastructure spending package. It is a wide-ranging bill that includes roads to R&D. This is in a way sets the stage for the U.S. to compete with China.

How is it funded? Raising the corporate tax to 28% from the current 21% (previously it was 35%).

The world needs this large fiscal stimulus to help global recovery from the pandemic. The OECD estimates up to 1.5% increase in global growth based on the U.S. stimulus package.

Will there be inflation? The short answer is No. Why? So long as there are subscribers to the U.S. debt issuance and China restrains price increases, inflation will remain benign.

Andrew Sheng in a recent Starbiz article (Saturday 10 April 2021) remarked state-owned enterprises (SOEs) contributed to China’s growing net national wealth to US$ 88.6 trillion. The state owns one-quarter of such wealth, ample reserves to address modernisation without higher taxation. Chinese SOEs are best labelled as “social enterprises” – achieving social goals through business methods – not wholly for profit.

In contrast, U.S. shareholder capitalism and political requirements, cause formidable obstacles and delays in implementing infrastructure projects. The bulk of public infrastructure in the U.S. is in private hands. China has SOEs to own infrastructure but allows private sector to innovate and compete on the basis of usage rights.

How then to deliver performance without corruption, concentration and social injustices? Free markets have made the top 1% in the U.S. increase concentration of wealth and power. So, is it state capitalism or more market socialism? That’s for the U.S. Congress to decide.

In Malaysia, the boundaries between business, politics and state have been blurred so it is difficult to distinguish between “rent-seeking” and “productive” or progressive capitalism. Has Government initiatives since the NEP raised new entrepreneurs or fostered more rent-seekers? Then there are state-owned enterprises (or GLCs) in almost all sectors of the economy that competes with private sector entrepreneurs of all ethnicities.

In terms of countries with the highest SOEs or GLCs, Malaysia ranks fifth in the world. Total assets of these GLCs amount to 51% of GDP as at end 2015 (Jayant Menon, IDEAS). Its debts amount to 15% of GDP and its revenue about 25% of GDP. The Government estimates GLCs employ 5% of the workforce, and accounts for 36% of market capitalisation on the Bursa Malaysia. GLCs are most dominant in utilities (93%, before sale of Edra) and in transportation and warehousing (80%). GLC’s share is greater than 50% in agriculture, banking, information communications and retail trade. The heavy presence of GLCs in the said sectors seem odd when they are neither monopolies nor strategic to the nation. Wan Saiful Wan Jan (2016) remarked that the Government’s share in the KLCI increased from 43.7% in 2011 to 47.1% in 2015.

Menon and Ng (2017) found that GLC presence in general has a discernible negative impact on non-GLC investments in Malaysia. Their research also determined that where GLCs account for a dominant share (60% or more) of revenues in an industry, investments by private firms in that industry is negatively impacted. This is the crowding-out effect!

There is a legitimate role for Government in an economy – especially in provision of public goods and/ or facing market failures. In Malaysia, the state is widely and deeply involved in business. Good governance and quality leadership are then compromised. And when massive bailout drains our limited resources, the question is whether the political or social cost to be incurred is even higher.

To move forward, there is a need for divestment by the Government of its interests in GLCs and an acknowledgement (that with the GLCs) the NEP has been firmly met. Issues of income distribution can then be addressed through divestment and restructuring of state enterprises.



1.     Government-Linked Corporations: Impacts on the Malaysian Economy, IDEAS

2.     Andrew Sheng, Adopting state capitalism to compete against China, 10 April 2021, The Star

Friday, 16 April 2021

Inter-state Travel Ban Impacts the Economy


The continued ban on both interstate and international travel means that a fast economic recovery will certainly be delayed, say Carmelo Ferlito from the Center for Market Education (FMT, 12 April 2021).

The Government’s move to restrict movements and certain economic activities, as well as holding off from convening Parliament, was an overreaction to the Covid-19 situation. In setting policies, the Government should be looking at the country’s very low fatality rate of 0.37% rather than the number of cases.

 “In Malaysia, the survival rate if you get Covid-19 is 99.6%. This is a lot higher than a lot of other illnesses. “In fact, Malaysia’s death rate from Covid-19 – the proportion of cases that prove fatal – ranks among the lowest compared to regional neighbours and other countries with similar population size, and is far better than the global average of 2.02%.”

Ferlito said measures from lockdowns to continued travel restrictions are greatly damaging the economy and that the consequences such as higher debt, inflation, and so on have largely been left out of the conversation.

 “Clearly the risks outweigh the benefits but the government does not speak about this. So there is a great contradiction,” he said, adding the reality was there were no “zero-risk” situations in life, be it vaccines or the economy.

“If you want to look at the real costs of the restriction on jobs, just look at the data on the number of people who started doing Grab, Foodpanda, and other gig-economy jobs. Then you would know how many people more would be jobless if these jobs didn’t exist.”

 “Children can go to school, people can go and watch football games, but we are not allowing people to travel. So areas outside of the Klang Valley and other big cities especially are going to suffer more than others, the tourism and retail sector is going to continue to suffer.

“What is the logic in allowing a mall in Selangor to be packed but not allowing people to travel to Melaka for a holiday?”

Excessive caution impacts the economy. Many hotels, retailers and businesses suffer because inter-state travel is not allowed. If the SOP is being followed, pray why then do we restrict travel and domestic tourism? Couldn’t we be more imaginative?

With vaccines being rolled-out it is time for the Government to relax inter-state travel, at least for now.



Travel ban crush hopes of quick recovery, say think tank, Robin Augustin and Imran Ariff,

(, April 12, 2021


Thursday, 15 April 2021

Sleep: How Much Do You Need?

Among the most rested countries surveyed by Sleep Cycle, an app that tracks how much shuteye people are getting, New Zealand comes top with the average Kiwi clocking in excess of 7.5 hours per night.

Finland, the Netherlands, Australia, the UK and Belgium all rank highly for sleep, too, with Ireland close behind.

But not all developed economies rest well; South Korea and Japan are the world’s worst countries when it comes to getting a good night’s sleep. People in Saudi Arabia, the Philippines, Malaysia and Egypt are also some of those most likely to be sleep deprived. Singaporeans sleep 6.6 hours on weekdays and 7.3 hours on weekends.

The problem of sleeplessness in Japan is well-documented, particularly in relation to the phenomenon of karoshi – death caused by lack of sleep.

Thankfully, cases of karoshi are relatively rare. But long before a person’s health and wellbeing are critically endangered, sleep deprivation will eat away at their ability to do their job.

The cumulative effect of compromised productivity adds up to the equivalent of a slew of working days being lost. According to Rand Corporation, the US loses the equivalent of around 1.2 million working days per year due to people not getting enough sleep. In Japan, around 600,000 working days are lost per year, while in the UK and Germany it stands at around 200,000.

All these lost days have an unavoidable effect on a country’s economic output. The US loses approximately $411 billion a year, or 2.28% of its GDP. For Japan, that’s around $138 billion a year (2.92% of GDP). In Germany, it equates to $60 billion (1.56% of GDP) and in the UK it’s $50 billion (1.86% of GDP).

To Sleep, Perchance to Dream

The fact that small improvements in sleep can be amplified into much larger economic gains is something of a wake-up call.

If everyone in the US who sleeps fewer than six hours a night got between six and seven hours, there would be a $226.4 billion boost to the economy. All that from what is, effectively, less than an extra hour in the land of nod each night.

This level of improvement could add around $75.7 billion to the Japanese economy, a point that hasn’t been lost on the owner of a Tokyo-based wedding company called Crazy. Last year, the firm’s CEO, Kazuhiko Moriyama announced a cash-bonus for employees who were getting at least six hours sleep a night. “You have to protect workers’ rights, otherwise the country itself will weaken,” he said.

The American National Sleep Foundation recommends that adults get between seven and nine hours a night.


1.     Sean Fleming, Which Countries Get the Most Sleep?

2.     Khoo Bee Khim, Nearly 6 in 10 Singaporeans aren’t sleeping well because of COVID-19, study confirms, 18 Mar 2021, CNA

Wednesday, 14 April 2021

Household Debt to GDP: When Does It Become Critical?


Malaysia’s household debt-to-Gross Domestic Prod­uct (GDP) ratio surged to a new peak of 93.3% as at December 2020 from its previ­ous record high of 87.5% in June 2020, ac­cording to Bank Negara Malaysia (BNM).

BNM said this was mainly because growth in the nation’s household debt had nor­malised to pre-pandemic levels in the sec­ond half of 2020 (2H20), but the GDP remained below pre-Covid-19 levels. “A concern over high household debt is that it may lead to a rapid deleveraging by households in the aftermath of a cri­sis, thus dampening or derailing economic recovery,” BNM warned in its Financial Stability Review for Second Half 2020 re­port released on 31 March 2021(Emir Zainul in reviewed the report).

According to BNM, household debt growth in 2H20 was mainly driven by car and housing loans, which expanded 6.1% and 7.4% from a year earlier respectively, lifted by strong response to sales and ser­vice tax exemption for the purchase of cars and various homeownership incentives.

BNM said that those earn­ing less than RM3,000 monthly remain stretched financially, with low financial buffers and substantially higher leverage. Borrowers earning less than RM5,000 monthly also appear to be showing signs of financial stress, as observed from the pro­files of those seeking repayment assistance.

In the short term, economists believe this high level of household debt-to-GDP ratio is manageable and do not pose that sig­nificant a risk to the country’s financial stability.

A Bank for International Settlements (“BIS”) study suggested that debt boosts consumption and GDP growth in the short term (over one year). But the long-run negative effects of debt eventually outweigh short-term positive effects. A 1% increase in household debts to GDP tends to lower output growth by 0.1% in the long run. BIS has determined the threshold for negative effects to kick-in is when household debt to GDP ratio exceeds 60%. The greater impact is when this ratio exceeds 80%.

An IMF study in 2017 confirmed that there is a trade-off between short-term benefits and medium term costs of rising debt. In the case of the IMF, it was observed that a 5% increase in household debt to GDP results in a 1.25% decline in real growth in three years into the future. And a 1% increase in debt raises the odds of a future banking crisis by about 1% point.



Mitigating the risks include better financial regulation and lower income inequality. Those economies with less external debt, floating exchange rates and are financially more developed seem better placed to weather any crisis.

BNM may find itself in a difficult situation in the present “high” ratio. Monitoring borrowings by the lower income group and early re-scheduling of debt will mitigate risks. Nonetheless, it is only in having higher incomes and better income distribution will we be able to resolve this ballooning ratio.



1. Malaysia’s household debt-to-GDP ratio surges to new peak of 93.3%, Emir Zainul,, April 1, 2021

2. Rising household debts: what it means for growth and stability, Nico Valckx,, October 3, 2017

Tuesday, 13 April 2021

Are Crowdfunding Platforms Getting Hot?

Venture capital and private equity fundraising activities declined by 41% last year as there were increased uncertainties caused by the Covid-19 pandemic. The amount raised amounted to RM11.7 billion last year, of which RM4.31 billion was via venture capital and RM7.39 billion via private equity (The Star, 20 March 2021).

But the reverse was seen for equity crowdfunding (ECF) / peer-to-peer (P2P) financing, which grew by 43%, raising RM631 million for the Micro, Small and Medium Enterprises (MSMEs), as reported by the Securities Commission.

Total capital raised through ECF in Malaysia grew by a whopping 457% to RM127.73 million last year from RM22.92 million in 2019. The campaign sizes in 2020 also shifted towards larger fundraising amounts, with 84% of campaigns raising more than RM500,000.

The top three sectors in terms of the amount of capital raised in 2020 were:

- the other services activities with RM38.88 million or 31% of the total amount of capital raised; - the professional, scientific and technical activities sector saw RM19.96 million (16%); while   - the information and communication sector raised RM18.27 million (14%).

P2P financing also saw total capital raised increase by 20% to RM503.31 million last year, from RM418.64 million in 2019. Wholesale and retail trade; repair of motor vehicles and motorcycles sector remains the largest sector served in 2020 at 52%.

ECF and P2P have proven to be viable financing options for MSMEs. Within six years, about 3,000 MSMEs have raised more than RM1.3 billion (as at end 2020) through ECF and P2P. Over 80% of the investors in the crowdfunding markets are retail and about 60% of them are under the age of 35.

More and more entrepreneurs and investors are acknowledging the benefits of crowdfunding. To entrepreneurs, the hinderances of long waiting period, collateral and creditworthiness track record in getting a loan approval now seem avoidable. But to investors, high returns will always come with high risks. Do your due diligence and make sure you diversify your investments!



1.     SC Annual Report 2020, Securities Commission Malaysia

2.     B.K. Sidhu, Crowdfunding more popular, 20 Mar 2021, The Star

3.     Jagdev Singh Sidhu, Risen Jayaseelan, SC remains vigilant on emerging cyber risks, 20 Mar 2021, The Star

Monday, 12 April 2021

Covid Bankruptcies: Top 15 Failures in the World


In the U.S., some sectors are faring much worse than others, with restaurants, retailers, entertainment companies, real estate firms and oil and gas ventures filing for protection in far greater numbers than in previous years, according to New Generation Research. Bankruptcies filed by entertainment companies in 2020 nearly quadrupled, and filings nearly tripled for oil and gas companies, doubled for computer and software companies and were up 50 percent or more for restaurant owners, real estate companies and retailers, compared with 2019. Among those industries most affected, there were 5,236 Chapter 11 filings in 2019 but 6,917 last year, a tally at least 30 percent higher than any of the previous four years.

Economists are predicting strong economic growth this year overall. But the bankruptcy data show that despite $3.7 trillion in federal stimulus spending and another $1.9 trillion by President Biden, businesses in certain industries have become particularly vulnerable.

Because bankruptcy filings lag other signals of economic distress, experts say the worst may be yet to come. Bankruptcies stemming from the 2007 financial crisis didn’t peak until 2010.

“Bankruptcies don’t cause damage to the economy," said Ed Flynn, a consultant to the American Bankruptcy Institute. "The damage has already been occurred when the bankruptcy is filed. Higher bankruptcies are more a symptom of economic harm than the cause.”

Hundreds of bankruptcies that have already taken place are clearly a by-product of the pandemic and its nearly year-long squeeze on the economy. Many of them will not recover. Over the summer, chain retailers became some of the biggest names to file for Chapter 11, among them J. Crew, Neiman Marcus, J.C. Penney, Brooks Brothers and Lord and Taylor. In June and July, there was an average of more than two corporate bankruptcy filings per day, according to S&P Global.

When one looks at the top 15 bankruptcies filed in 2020 it becomes clear that these businesses were struggling long before the pandemic hit. For all of them, a combination of some or all the typical and painful remedies against financial insolvency—layoffs and budget cuts, sales of assets, refinancing or restructuring of debt—ensued. The top 15 were as follows:


Country: United States

Liabilities: $6.79 billion

The American chain of luxury department stores, which also owns New York landmark Bergdorf Goodman, became the first highest-profile retailer to apply for bankruptcy protection when it filed for Chapter 11 on May 7.

Neiman Marcus had been struggling financially for a long time. Yet, the Dallas-based group proves that bankruptcy can be an opportunity to refocus and reorganize the business. Under a restructuring plan which eliminated more than $4 billion of its debt, the group managed to emerge from Chapter 11 in September.


Country: United States

Liabilities: $7.16 billion

Over 840 locations across the United States, 90.000 employees, 118 years in business. On May 15, barely a week after Neiman Marcus, J.C. Penney filed for Chapter 11 bankruptcy protection.

Like its upscale rival, the discount store chain has announced it emerged from bankruptcy after being acquired by mall owners Simon and Brookfield. One-third of its stores will be closed and 20,000 workers laid off, but that is the high price of survival. A majority of J.C. Penney's workforce will get to keep their jobs.


Country: Colombia

Liabilities: $7.27 billion

Founded in Colombia in 1919, the world’s second-oldest carrier (behind the Dutch KLM) and Latin America’s second-largest filed for Chapter 11 in New York on May 10. Along with many historic airlines, Avianca had been facing competition from low-cost operators for years. To stay in business, it plans to cut routes and let go of up to 40% of its fleet.


Country: Norway

Liabilities: $7.34 billion

Norwegian Air, the pioneer in discounted transatlantic flights, entered into administration in December. Years of aggressive, credit-fuelled expansion left the company vulnerable to shocks. In the second quarter of 2020, the carrier’s passenger numbers collapsed by 99% due to the pandemic and it became impossible for them to make debt payments in full and on time.


Country: United Kingdom

Liabilities: $7.3 billion

The crash in oil demand prompted by lockdowns and travel bans forced numerous energy firms to declare bankruptcy. Seadrill—a rig contractor managed from London but incorporated in Bermuda for tax purposes and controlled by Norwegian billionaire John Fredriksen—filed for Chapter 11 in December.


Country: Jamaica

Liabilities: $7.4 billion

Digicel mobile phones are ubiquitous in the Caribbean. Yet, the company has been battling declining revenues and increasing operating costs for years. The reason? The industry-wide trend of declining high-margin voice revenue versus increasing low-margin data usage among its subscribers. Digicel cable television and broadband businesses, also, have not been able to offset the losses in phone operations.


Country: United Kingdom

Liabilities: $7.85 billion

Many oil and gas firms have defaulted on their debt. Among them, the largest offshore and well drilling company in the world, London-based Valaris, which filed for Chapter 11 bankruptcy protection on August 19.


Country: United States

Liabilities: $9.86 billion

McDermott International to default on its loans. A casualty of low prices and record-breaking debt, McDermott entered Chapter 11 reorganization in January. It has since then emerged from proceedings through a restructuring plan that included the sale of its subsidiary Lummus Technology.


Country: Thailand

Liabilities: $10 billion

Thailand's national carrier used to be known for having the best service among Asian airlines. Not anymore, according to its customers, and that might have to do with the fact that Thai has recorded net losses for seven of the past 10 years, making it difficult to invest on the necessary improvements and upgrades. In May petitioned for bankruptcy protection (or “debt rehabilitation,” as it is called in Thailand) claiming an estimated debt burden of 300 billion baht at the time of the filing, roughly equivalent to $10 billion.


Country: United States

Liabilities: $11.79 billion

A decade ago, Oklahoma City-based Chesapeake Energy helped turn the US into a global powerhouse by pioneering fracking, the technique of extracting oil and gas from rock formations by injecting high-powered water and chemicals. By the end of June this year, buried under a mountain of debt, it was bankrupt and delisted from New York Stock Exchange.


Country: United States

Liabilities: $12.5 billion

What can amass more debt than a large retail chain? An umbrella company that owns several retail chains, of course. That is the case of Ascena, which filed for bankruptcy in July, and counted among its subsidiaries household names such as Ann Taylor, Loft, Lou & Grey and Lane Bryant. In November, Ascena announced that the private equity firm Sycamore Partners had agreed to acquire and relaunch the portfolio of brands with the commitment to retain about 900 of the 1,500 retail locations throughout the U.S.


Country:  Luxembourg

Liabilities: $16.8 billion

The global pandemic forced the already struggling Luxembourg and Virginia-based satellite operator to file for Chapter 11 in May.

What does Covid-19 have to do with satellites? Most broadcast and cable tv providers in the U.S. rely on Intelsat to distribute their programming, but the near-total absence of live sporting events had a major impact on the company. The ban on traveling weighed on its revenues as well, as an important portion of the business is represented by communication services to aviation and maritime industries.


Country: Chile

Liabilities: $17.96 billion

It is the largest airline in South America and the largest to enter into administration this year globally. With its affiliates in Brazil, Peru, Colombia, Ecuador and the U.S., Latam Airlines filed for Chapter 11 bankruptcy protection in New York in May. It faced many of the same problems by its counterparts in the region and around the world during the pandemic, except its pile of debt was much, much greater.


Country: United States

Liabilities: $21.86 billion

The internet, TV and phone company initiated business rescue proceedings in April. With a debt burden—according to consultancy firm BankruptcyData—close to $22 billion, it is the biggest telecom bankruptcy since the Worldcom Inc. fiasco in 2002. 

Frontier operates in 29 states across the U.S. in predominantly rural areas and small and medium-sized cities. Amid costly acquisitions and countless complaints of poor-quality service, its financial collapse has been several years in the making. Bankruptcy proceedings, while likely to save the company, won’t make customers’ wifi any faster.


Country: United States

Liabilities: $24.3 billion

“The impact of Covid-19 on travel demand was sudden and dramatic, causing an abrupt decline in the company's revenue and future bookings,” said Hertz Global Holdings in a statement on May 22. The same day, the company—which began in Chicago in 1918 by renting a dozen Model T Ford cars—filed for Chapter 11 in Delaware. By then, Hertz had already furloughed or laid off 20,000 employees, or about one-half of its global workforce.


There are also others in Malaysia which may survive because of cash infusions by the Government or “work-outs” with banks. Recovery and vaccines will determine fate of many. Meanwhile, over 60,000 SMEs may have collapsed up to early this year. Some may never come back and others may return with new entrepreneurs, who have not seen any scary downturns. Remain cautious and vigilant.


1. The wave of Covid bankruptcies has begun, Jonathan O’Connell and Anu Narayanswamy, The Washington Post, Feb 26, 2021

2. The world’s biggest bankruptcies in 2020, Luca Ventura, Global Finance, Dec 29, 2020