Can We Have Malaysia Savings Bonds?

 An illustration of the proposed Malaysia Savings Bond includes:

The above illustration is based on the Singapore Government’s Savings Bonds for retail investors. Why can’t we have this to fund Government development projects? Is MOF/BNM able to organise it?

Savers are currently paid pittance even in a rising interest environment. The current savings rate is about 0.2% p.a, well below inflation. Couldn’t the banks/MOF assist savers to get a fair return?

Reference:

Monetary Authority of Singapore

Can You Work Till You Die?

Nearly two centuries ago, lexicographer Noah Webster defined “retire” and “retirement” as a form of withdrawal: retiring for the evening, for example, or retiring from public life. But retiring to pursue hobbies and spend more time with the grandchildren while living off a lifetime’s worth of savings invested in stocks and bonds? No.

Back when Webster was doing his defining, 70% of white men over the age of 65 worked for a living. Official rates for women were lower.

Source: https://www.theatlantic.com

The toil-until-you-die mentality was arguably a necessity, particularly on family farms where most Americans lived and worked at the time. Historians have also argued that it reflected respect for the elderly, who accumulated useful knowledge about farming over the course of their lives. The small-scale industrial enterprises that were just beginning to transform the U.S. economy also employed the old, but for different reasons. These firms often depended on family and community connections to recruit and retain workers. Owners and managers realised that putting older relatives to work would help them hire younger labourers as well.

Factories grew larger, but managers kept graying workers on the payroll. Some did so out of compassion, but others believed that older employees were more conservative and consequently less likely to succumb to radicalism and strikes. They could also be employed as reserves during times of labour unrest.

Beginning in the 1890s, though, men over 65 began to “retire” from the workforce. This shift arguably began when late-19th century unions and progressives pushed to reduce the length of the working day, which often lasted between 10 and 12 hours. They demanded an eight-hour day, and eventually, a five-day work week.

As reformers made inroads, companies became increasingly sensitive to productivity issues: They now needed to produce the same amount as before, but with far fewer hours. Inefficiencies that might have been acceptable in the past now became intolerable. This spelled trouble for older workers. 

As Americans internalised the idea of retiring, they lost touch with its problematic origins. This amnesia made it difficult to imagine alternatives to retirement that did not involve a full-scale separation from the workplace, such as part-time work or other flexible arrangements.

And now that leaves the United States in an increasingly untenable position as it confronts a persistent labour shortage. The workforce participation rate for people over the age of 65 is stuck at 23%. In fact, many of the unfilled positions are in professions that are likely to continue seeing high demand even in a recession – teachers, for example.

There is a solution. Greater acceptance of flexible or “phased” retirement would enable older workers to retain an income while still spending more time on leisure. This approach can help alleviate shortages of workers, and it may also lessen the burden on the social safety net by keeping seniors engaged and active.

Companies and public agencies should put more effort into extending such part-time opportunities to their older workers instead of thinking of retirement as being either an all-or-nothing stage of life.

In Malaysia, we have older folks with low-savings. It is difficult to retire unless you have savings of at least RM250,000 in present day terms. This is a bare minimum, and many don’t even have more than RM10,000 in their EPF at 60. So, flexible arrangements are the way forward. Perhaps working in a part-time arrangement to 75 will help. If one keeps well, i.e. mentally and physically fit, it is possible. It also reduces the possibility of early onset of dementia or stroke. Perhaps, insurance companies, medical institutions and the Government could work towards a scheme for senior part-timers who are willing and able to work to 75!

Reference:

Ready to work until you die? America needs you, Stephen Mihm, The Star, 10 Sept 2022

Is Malaysia Unlikely To Go Into Recession?

 In August, Finance Minister Tengku Zafrul Aziz said Malaysia’s economic outlook could be hurt by pessimism in the global economy. Bloomberg quoted him as saying Malaysia must be prepared for a slowdown in the global economy, despite the country’s strong economic expansion following the reopening of its borders and booming exports. But Bursa Malaysia’s Chairman thinks otherwise.

Pragmatic and responsive policies as well as an economy which is well-diversified are factors that could prevent Malaysia from going into recession. In addition, Bursa’s Chairman cited that one important factor that has contributed to Malaysia’s resilience is its strong and stable financial system. Debt and Equity markets are valued at RM3.5 trillion as of the end of 2021.

Source: https://www.thesundaily.my

The former economic affairs minister, however, noted that global supply chains had been under pressure with economies returning to normal post-pandemic, exacerbated by trade tensions between US and China as well as the Ukraine-Russia conflict. These factors had caused commodity and logistic prices to surge, in turn causing high inflationary pressure which forced central banks around the world to tighten their respective monetary policies.

There are at least two problems with this thinking:

(i) Financial system only lubricates the economy or provides the “blood flow” in a body – it does not generate GDP per se. If you have done Economics 101 you may understand that growth is the summation of consumption, investment, government intervention and net foreign trade/services. Banks being well capitalised and resilient means it could weather a downturn, not generate growth. In a recession (or potential downturn) outlook is dimmed, businesses invest less and generally Government expenditure may stem negative growth.

(ii) Central banks tighten interest rates to deflate inflationary pressures not because of logistics or supply chain disruptions. The latter is a cost-push phenomenon, not a monetary one. Printing money during Covid has now come to roost. Hence the interest rate hikes.

Malaysia’s resilience is due to its diversified export commodities and the manufacturing sector – primarily E&E. But we need to improve output disruptions due to labour shortages in the manufacturing, plantations and construction sectors. That hampers growth. 

So, if we “buck the trend” it is pure Providence and not policies of a bereft Government!

Reference:

Malaysia unlikely to go into recession, says Bursa chairman, FMT Business, 14 September 2022

Is Malaysia in the Hunt for Talent?

The government’s recent decision to roll out a premium visa programme (PVIP) is aimed at attracting the rich into the country with the hope that they will spend and invest here.

The idea is not new. Portugal, for example, launched its “golden visa” programme some 10 years ago, and currently rates as one of the more successful destinations for such a programme. It has garnered around 27,000 successful applications since launching the programme. Other countries like Thailand and Singapore are also in the game.

Malaysia needs talent. There is a severe shortage of skilled labour in Malaysia today. Penang, the hub of the country’s semiconductor sector, suffers from a severe shortage of engineers. The Small and Medium Enterprises Association (Samenta) says that the northern state is short of 50,000 engineers and technicians.

Over the last eight months, persistent skilled worker shortage may have caused the manufacturing sector to lose out about RM50bil worth of business opportunities. That’s according to the president of FMM.

A quick look at the comparison between Malaysia’s PVIP and programmes by Singapore and Portugal (see table) shows two key points. One is that while Malaysia’s programme only offers residence visas, the other two countries offer PR and even citizenship.

Secondly, the participation fees for PVIP is way higher compared with the fees for Singapore’s Global Investor Programme or GIP or even Portugal’s Golden Visa Programme or GVP as shown in the table.

Under Singapore’s skilled labour pass, also known as S Pass, designed specifically for working mid-level skilled workers with a minimum salary of S$2,200 (RM7,056), Singapore offers permanent residence (PR) status after four years of job stability.

The idea of obtaining a PR status is definitely a key factor for skilled workers as to why they opt for Singapore. In Singapore, though, there are controls put in place to ensure that not too many foreigners are employed. For example, the number of S Pass holders in service industry businesses is limited to 15% of the total staff. In other industries, the limit stands at 20%. Interestingly, employers in Singapore are also required to purchase medical insurance for S Pass holders.

Part of the problem of the shortage of skilled manpower in Malaysia lies with the shortcomings in the education system. The FMM acknowledges the need for greater student participation in the fields of science, technology, engineering and mathematics or STEM. Current enrolment is only 40% from STEM, causing the supply of skilled labour to be insufficient for the country. The need for more graduates from STEM extends to almost all sectors in support of automation activities.

The quantum of skilled workers also plays an important role in the country achieving its ambition to be a developed nation, i.e. 45% of the workforce to be skilled by 2030. But are we serious? Because we keep attracting the low-skilled, low-pay labour force. And several ministries are involved in this recruitment with lucrative “arrangements”. So, in one sense we have lost even before we have begun!

Reference:

The hunt for talent, Kirennesh Nair, The Star, 10 Sept 2022

“Can I Advise You Something?”

We may have advisers in our companies/organisations, in our homes (usually your wife), in our schools or in other areas of endeavours. In all instances, advisers are there as resource people, proferring their thoughts when it is sought, not when it is not needed.

The High Court ruled that the ex-FLOM dominated her husband and had control over the former prime minister. In his 116-page judgment, the Judge said it was clear from the audio recording that the accused gave instructions to the ex-PM on government affairs. The judge was referring to the audio clip of “Can I advise you something” that went viral.

The judge said the accused’s tone was commanding and contrary to her contention that she heeded former PM’s prohibition on not meddling in government affairs.

He further added that an aide (Rosmah’s) was telling the truth when he said that the accused has an overbearing nature and the ability to influence decisions in the civil service as he has worked with her for many years and would have been able to witness this personally.

The judge further said Rosmah’s defence that she had never interfered in any Government’s project, was hearsay as Najib did not testify in court. He said the accused emphatically denied interfering in any of the government’s projects, especially in a RM1.25 billion hybrid solar project for 369 rural schools in Sarawak

Source: https://www.eqmagpro.com

All her statements attributed to Najib were hearsay and are inadmissible as evidence, as he did not testify and only he could verify what the accused claimed he had said.

The judge further said that the accused claimed that former Minister of Education and former secretary-general of Ministry of Education had a vested interest in the project and that they had cast aspersions on the accused to camouflage their wrongdoings on the project. The judge found no credible evidence to prove that both individuals had attempted to profit from the project.

There is a subtle difference between advice and advise. Advice is a noun. It means an opinion or recommendation that is offered as a course of action. Advise is a verb. It means to offer an opinion or suggestion or formally provide information. In ex-FLOM’s case, it is correct to use “advise” – she is giving direction to the former PM who follows that instruction.

There is nothing inherently wrong for a wife to advise her husband! But here it is on state matters, which impacts on integrity, policies and procedures. Rural school children in Sarawak are impacted by one person’s greed. So, what can we learn?

• Greed is in all of us, but this was well above any decency;

• “Checks and balances” obviously failed;

• Civil service and Cabinet can be “stream-rolled”;

• Non-party and non-Government individual can override Government decisions; and

• Executive branch has far too much clout over our legislative branch. We are grateful the judiciary stood firm.

The present PM needs to reform the current practices and procedures to reduce another episode of “Can I advise you something?”

Reference:

“Can I advise you something” shows Rosmah controls Najib, govt affairs: Court, Bernama

“See You at 5”

There was an expression during the Asian Financial Crisis (“AFC”) of “see you at five”, this was when the ringgit to the dollar was headed south and before capital controls was imposed. The weakening ringgit have led many to believe that this is possible, especially when the Fed is hawkish.

But the ringgit is firmer (year-to-date) against the Japanese yen (12.5%), British pound (7.2%), South Korean won (7.1%) and marginally higher (0.9% to 3.8%) for the yuan, baht, Philippines peso and the euro.

Over the long-term (10-15 years) its relative performance is shown in the chart below:

While the picture looks respectable over a 5-year period, it looks depressing over the 10-15 year period (see Chart 2). We have collapsed by almost 50% to the U.S. dollar, over the last 10 years. Other significant declines are against Chinese yuan (34.7%), Singapore dollar (24.4%) and the Thai baht (24.4%). The ringgit has slid from RM3.05 to the USD in 2012 to RM4.53 by September 2022.

On a Real Effective Exchange Rate basis, the ringgit is undervalued by 16.8%. A fair value is approximately RM3.89 to the USD. But this is far from its current position and expectations of some others (The Economy Forecast Agency) as shown below:

By June 2024 (or sooner?), we could hit RM5 to the dollar. In fact, one former Minister of Finance thinks it could be RM5.50 to USD by year end. But we can change this scenario if we are willing to consider the following:

• Raise OPR by 0.75% to 1% in November;

• Stem outflow – remittances/overseas investments without capital controls;

• Repatriate funds from investments made overseas;

• Improve quality of local education and stem outflow for student fees/living expenses;

• Use import substitution to reduce import of food products (RM60bil or more);

• Provide more job opportunities for Malaysians in the STEM area;

• Declare “war” (jihad) on corruption;

• Reduce scale of “shadow” banking;

• Ease doing business in Malaysia for FDIs and DDIs;

• Halt flip-flop policies; and 

• Actually practice “Keluarga Malaysia’.

Can we do that?

Reference:

Whither the ringgit? Pankaj Kumar, The Star, 17 September 2022

U.S.: inflation and Household Debt

In an economy that has produced the highest inflation rate since 1981, Americans are struggling to keep up with expenses. Nearly 40% of consumers cannot put any money at all into savings, according to a recent analysis of household financial health and readiness by the American Consumer Credit Counseling. Another 19% said they had to reduce their savings rate. About 78% of Americans are living paycheck to paycheck.

As of the second quarter of 2022, 48% of consumers said the rising cost of basic necessities impacted their family's lifestyle, a steep jump from 39% in the first quarter.

In order to make ends meet, 43% of Americans expect to add to their debt in the next six months, especially young adults and parents with young children, according to a separate study by LendingTree. Most will rely on credit card debt to bridge the gap between what they need and what they can afford, the report found. Already, the rise in borrowing, together with auto loans, student debt and mortgages, propelled total household debt to a record $15.84 trillion at the beginning of the year.

When you’re drowning in debt, it can feel like the world is caving in around you. Your thoughts are swirling and just won’t stop. You’re not sleeping, and you’re worried your next paycheck won’t be enough to provide for your family. And then the questions fueled by endless worry begin: How will I make ends meet? How in the world will I cover my mortgage/rent this month? Will these debt collectors call my boss (how embarrassing)?

1. Have a budget.

Making a budget is one of the most important steps you can take. It’ll show you where all your money is going and why you feel like you’re drowning. This is your first step toward taking control of your money—and never feeling like you’re in over your head in debt again.

When you’re making your budget make sure your basic needs are met:

• Food

• Utilities

• Shelter

• Transportation

2. Cut back on the extras.

Take inventory of any automatic payments that might be draining your bank account. Maybe you have a subscription that you need to terminate. 

Cutting back on non-essential items include:

• Make coffee at home instead of Starbucks!

• Cut back on your grocery bill.

• Don’t even step foot in a restaurant.

• Sell everything that’s not nailed down. 

3. Pause all investing.

Saving for your future when you’re living paycheck to paycheck (or worse) isn’t the best idea. At least not yet. If you’re still trying to pay off credit cards, an upside-down car loan or a huge pile of student loan debt, it’s time to press pause on your future investments—temporarily. This frees up extra cash you can use to pay down your debt.

4. Don’t take on any new debt.

So don’t take on even another penny of debt. Having a credit card for emergencies seems like a good idea until your next “emergency” looks like your next afternoon coffee run. When you cut up those cards, you’re choosing to put an end to that awful cycle of debt for good.

5. Increase your income.

Now that you’re on a budget and you’ve decided to stop taking on any new debt altogether, it’s time to figure out how you can increase your income. Take a second job or pursue a side venture that will give you the extra income. Whether that’s working at your local coffee shop, mowing lawns, or driving for Grab.

6. Start working the debt snowball.

You’ve got some extra money coming in each month, it’s time to start paying off your debt with the debt snowball method:

• List your debts from smallest to largest—no matter the interest rate. Keep making minimum payments on all of them except the one with the smallest balance.

• Attack your smallest debt with everything you have. Throw your earnings on this debt. Keep putting anything extra you make toward this debt until it’s gone.

• Once that debt is paid, take what you were paying on it and throw it at the next-largest debt while paying minimum payments on the rest.

• Keep this snowball rolling until you’re debt-free!

7. Stop the comparison trap.

Comparison is one of the worst things you could do while you’re getting out of debt. If you’re scrolling through your news feed and see your friend  on a European vacation with her mom, that doesn’t give you permission to plan a fancy vacation too. 

8. Start (or keep) working the Baby Steps.

These seven steps are the proven (and practical) way to help you change your life, pulling yourself out of the debt quicksand and on to more stable ground.

Baby Step 1: Save $1,000 (or 10% of income) for your starter emergency fund.

Baby Step 2: Pay off all debt (except the house) using the debt snowball.

Baby Step 3: Save three to six months of expenses in a fully funded emergency fund.

Baby Step 4: Invest 15% of your household income in retirement.

Baby Step 5: Save for your children's education.

Baby Step 6: Pay off your home loan early.

Baby Step 7: Build wealth and give.

And good luck on your new discipline, may you rise above the worries!

References:

Nearly half of all Americans are falling deeper in debt as inflation continues to boost costs, Jessica Dickler, CNBC

What to do if you’re drowning in debt, Ramsey Solutions, 23 August 2022

Interest Rate Hikes: Does it Matter?

There are research houses who maintain that there will be no overnight policy rate (OPR) hike during the Monetary Policy Committee (MPC) final meeting in November, keeping the end-2022 interest rate at 2.50 percent.

For 2023, one brokerage firm has priced in two 25 basis points (bps) rate hikes, bringing the OPR to 3.00 percent. Meanwhile, the energy crisis in Europe will likely push the European Union into recession, and China’s property market woes could only be the beginning of a major problem. 

Although Bank Negara Malaysia raised the OPR by 25 bps to 2.50 percent on 8 September, its third consecutive hike, it has not stemmed currency depreciation and hence food inflation.

The outlook for the US dollar/ringgit is likely to remain bleak. Year end 2022 forecast is 4.61 (USD to ringgit) due to a weaker trade surplus and adverse impact from developments in China. 

Going forward, the level seems to be more adverse (as forecasted by The Economy Forecast Agency):

One may argue that exchange rate depreciation is due to several factors beyond BNM. But have you observed that when there is IMF intervention, interest rates are hiked to stem outflows. That’s a crisis situation and some “hot” money may return. Here we have a chance to contain food import inflation and stabilise currency depreciation in the medium-term. Unless we move away from growth-centric policies, we are in for higher inflation and more depreciation (of currency) in the medium-term.

Malaysia’s growth for Q3 2022 is anticipated to be 8.8%, slightly lower than 8.9% for Q2 2022 (according to CGS-CIMB Research). But it may drop sharply in Q4 2022 with decline in commodity prices and softening prospects in China and the U.S.

What does that mean? It is more fuel for exchange rate depreciation. That is why BNM has to be more hawkish and raise OPR by at least 0.75% in November. It matters if we are to reduce imported inflation, especially on food.

Beyond interest rates, the Government has to look at overseas investments by GLCs and reverse the flow by disposing assets where possible. The return of Malaysian funds overseas will partly help stem depreciation of the ringgit. The other option is to examine the flows – are these pure speculative forces and/or large remittances by locals/foreigners.

Whatever the case, the fight against inflation is multi-pronged and I have only focused on exchange rate depreciation and its impact.

References:

Research houses mixed on expectation of year-end interest rate hike, Malaysiakini/Bernama, 9 September 2022

USD to MYR Forecast, The Economy Forecast Agency

Is There a Major Shift in the Job Market?

There is an ongoing shortage of skilled labour worldwide. This may hinder growth of businesses in the post-Covid-19 period. In the United States, the talent shortage has more than tripled in the last 10 years. For the United Kingdom, a study found that 69% of employers there were experiencing skill shortages.

By 2030, global consulting firm Korn Ferry estimates that the global talent shortage could reach 85.2 million people, resulting in the loss of trillions of dollars in economic opportunity. The industries that will be most affected are the “knowledge-intensive” industries such as financial services, technology, media, telecommunications and manufacturing.

The financial impact of this talent shortage could reach US$8.45 trillion (RM38 trillion) in unrealised annual revenue by 2030. Interestingly, India is the only economy in the study seen maintaining a talent surplus in 2030.

Several factors can affect talent availability – changing demographics, public policies, wages, digital transformation and the education system. Covid-19 played the role of disruptor and increased the reliance on digitalisation. 

For Malaysia, it is generally at the low-skilled or blue-collared worker level. Malaysia is in fact facing a “critical double crunch” where low-skilled workers without digital experience seem less employable, while those still employed must be reskilled to ensure career advancement and employment continuation.

Governments around the world, including Malaysia, are betting heavily on technology for future growth. Traditional cashiers will now have a more comprehensive range of career choices, like eCommerce analyst or as back-end logistics manager overseeing deliveries. So, it opens the door for new job opportunities, but this needs re-skilling.

The global hunt for talent is heating up. Australia, which has a long-standing shortage of skilled workers has now decided to ease its visa rules in a bid to attract skilled workers. Germany is allowing skilled foreign professionals to live in the country before securing a job, while the United Kingdom has introduced a new special visa for graduates from 50 of the world’s top universities. Singapore is offering a new five-year visa for high-earning foreign nationals, while Malaysia too has launched a new premium visa programme to draw rich investors to settle in the country, not necessarily skilled professionals.

Malaysia seems to be attracting more low-skilled workers than professionals. We have long suffered from a talent outflow to neighbouring countries like Singapore, China, Australia, the UK and the United States. This is largely due to better job opportunities, pay packages and lifestyle.

There are many expatriates who work in Malaysia but bureaucracy in relation to work permits and visas has denied their quest to stay for the long term. The Government, especially MITI and Home Ministry have to rethink their strategies.

Flip-flop policies and our inherent insecurity of “pendatangs” will leave us well behind others in the region and the world. Do we need STEM (people) to remain? Do we attract the best talent globally? Or, are we so focussed on one race only? Do we understand IR4.0 or is our blueprint a book for the coffee table? We need fresh ideas but this is unlikely from the present Government.

Reference:

Major shift in the job market? Gurmeet Kaur, The Star, 10 September 2022

“Malu Apa Bossku?”

A mother of four was sentenced to 14 months jail for allegedly stealing 2 packets of Milo worth RM74. An ex-PM was jailed 12 year for stealing RM42 million. Is this sentence fair? Shouldn’t it be longer?

Bottom-line, a theft is a theft. But some will say it is only one if you are caught. That’s the moral dilemma for this nation. Corruption is not deemed as sufficiently vile, but “rezeki” for some warped in their thinking.

Source: https://www.howtobecome.com

How simplistic can we get? Now the ex-PM is compared to Nelson Mandela, who fought against apartheid. Did the ex-PM fight for some “earth-shattering” moral movement or was he the problem? The guilty is now playing the victim. How convenient?

To make matters worse, he has filed for a pardon! On what basis? Is it on his record as the PM; as the architect of state election victories in Melaka and Johor; as the faithful husband of “Can I advise you something”?

If a pardon is granted, I suppose the lady who stole the Milo packets and every other soul in prison should be freed! We don’t need prisons; we don’t need too many judges – only the compliant ones would do; we don’t need lawyers – just those who are enlightened to admit hearsay “evidence” or an oath; and we don’t need too many police, because we will free the innocently guilty ones.

We have seen the ex-Chief Minister of Sabah freed, the former spy chief acquitted and many more who have changed their political beliefs for personal gain. Character of a leader is fundamental. Look at Boris and Trump – deny, admit, apologise – and all will be well! Fortunately, both fell from power because of deceit and character flaw. Yes, we are humans and we make mistakes. When mistakes and lies continue as second nature, it is a serious character flaw.

Pardon me on my aimless diatribe, the “soul” of a nation is being destroyed. Liberty is being misused to rouse mobsters for a political end. God save Malaysia!

Malaysia Day: A Chance to be Thankful!

Critical challenges continue to blight Malaysia as we celebrate almost six decades of Malaysia’s formation. Never-ending financial scandals, incessant corruption, escalating cost of living, unemployment, threats to food security and climate change are among the main issues afflicting the country today.

The billions of ringgit lost in financial scandals could have been used to improve the quality of life of millions of ordinary people. An emphasis on integrity among the people must be the top priority of the government.

Much more needs to be done to check the escalating cost of living, which is squeezing the people, especially the low and middle-income groups.

Are there any concrete government proposals to enhance food security? We import over RM60bn of food products. The high import bill is a cause for concern, especially with the ringgit weakening over the last few months. Why is the government not coming up with long-term solutions to ensure food security? Why have there not been proposals to develop a food ecosystem? Why can’t we develop food cooperatives as in Denmark?

Countless employment opportunities for graduates and non-graduates could be generated if we develop the food sector.

Source: https://www.tbxmultimedia.com

Malaysia is blessed with an abundance of sunshine, and so the government should aggressively promote the use of solar energy in our daily lives. By moving in this direction, we would reduce our carbon footprint. 

We should also emulate Singapore, which has set an exemplary example in greening its environment. The island republic has already planted 400,000 trees or two-fifths of its target of a million trees by 2030. Any form of greenery soaks up greenhouse gases.

Norway is another country we should follow in our quest to become an ecologically friendly nation. By 2025 motor vehicles using fossil fuels will be banned in the country, paving the way for only electric vehicles on the road.

Racial polarisation is given in Malaysia and it permeates all levels of society. I don’t see tangible measures being undertaken to unite the people as Malaysians first. “Keluarga Malaysia” is just a slogan like “1Malaysia”.

Can we have ethnically balanced student compositions in schools, colleges and universities? Employment in the public and private sectors should also reflect the racial composition of the nation. Then different ethnic groups can mingle with each other and reduce racial polarisation.

All countries have their challenges and Malaysia is no exception. We did quite well in handling Covid. In fact, we did far better than many developed and developing countries. Malaysians are fortunate to have access to free public healthcare. Some of our public hospitals have excellent and dedicated medical personnel. We also have a world-renowned health institute like the National Heart Institute (IJN).

Despite the criticisms levelled at the civil service, we still have some admirable civil servants in agencies like the Public Complaints Bureau. Staff at this bureau are the pride of the civil service.

Despite many issues facing the nation, we are still grateful to God for sparing Malaysia from calamities such as earthquakes, hurricanes, typhoons, volcanic eruptions and the more severe impacts of climate change.

There are many decent Malaysians who rise to the occasion by their little daily acts of kindness, humanity and compassion.

Malaysia Day on 16 September is a time for us to reflect key challenges facing Peninsular Malaysia, Sabah and Sarawak. Together we have the resources, courage and goodwill to overcome any challenge. May our politicians draw diversity as a blessing to celebrate rather than an impediment to progress! And may we be thankful to the Almighty for His myriad of blessings even though we murmur and complain daily. God Bless Malaysia!

Reference:

Malaysia celebrates six decades of independence with concerns and blessings, Benedict Lopez, ALIRAN, 29 August 2022

Is China’s Gen Z for “Tang Ping” or “Bai Lan”?

The most educated generation in China’s history was supposed to blaze a trail towards a more innovative and technologically advanced economy. Instead, about 15 million young people are estimated to be jobless, and many are lowering their ambitions.

A perfect storm of factors has propelled unemployment among 16- to 24-year-old urbanites to a record 19.3%. This is more than twice the comparable rate in the US. The government’s hardline coronavirus strategy has led to layoffs, while its regulatory crackdown on real estate and education companies has hit the private sector. At the same time, a record number of college and vocational school graduates—some 12 million—are entering the job market this summer. 

This highly educated cohort has intensified a mismatch between available roles and jobseekers’ expectations. The result is an increasingly disillusioned young population losing faith in private companies and willing to accept lower pay in the state sector. If the trend continues, growth in the world’s second-largest economy may suffer. The number of jobless under-25s amounts to a 2% to 3% reduction in China’s workforce. And fewer workers means lower gross domestic product. Unemployment and underemployment also continue to impact salaries for years—a 2020 review of studies reported a 3.5% reduction in wages among those who had experienced unemployment five years earlier.

More young people taking roles in government may leave fewer jumping into new sectors and fuelling innovation.

China's pool of graduates has grown more than tenfold over the past 20 years.

All workplaces have been hit hard by China’s snap lockdowns and strict quarantine measures, but private companies were more likely to lay off workers. Beijing’s main employment-boosting policy has been to order the state sector to increase hiring.

President Xi Jinping may be relieved that the country’s unemployed youth are trying to join the government rather than overthrow it. During a June visit to a university in the southwestern China’s Sichuan province, he advised graduates to “prevent the situation in which one is unfit for a higher position but unwilling to take a lower one.” He added that “to get rich and get fame overnight is not realistic.”

The message is getting through: Graduate expectations for starting salaries fell more than 6% from last year to 6,295 yuan ($932) per month, according to an April survey from recruitment firm Zhilian. State-owned enterprises grew in appeal over the same period, the recruiter said.

But lower income expectations and talent shunning the private sector are likely to lower growth in the long term, challenging the president’s plan to double the size of China’s economy from 2020 levels by 2035—by which point it would overtake the U.S. in size.

The phrase “tang ping”—“lying flat”—spread through China’s internet last year. The slogan invokes dropping out of the rat race and doing the bare minimum to get by, and reflected the desire for a better work-life balance in the face of China’s slowing growth. As the unemployment situation has continued to worsen, many young people have adopted an even more fatalistic catchphrase: “bai lan,” or “let it rot.”

Impossible goals to meet which are set by the bosses, too much pressure in life, never ever making it, may cause many to the “goblin mode” – and they are enjoying it!

“Bai lan” has gained more popularity than “tang ping” – rejecting gruelling, severe competition and high social expectations have prompted many to give up “996” which is essentially working 9.00 am to 9.00 pm, 6 days a week.

But “bail lan” is not unique to China, it is similar to the “slacker” generation in America in the 1990s. And “tang ping” last year was rejection of ultra-competitiveness in Chinese society. Shrinking opportunities, joblessness and unrealistic expectations have led to “bai lan”. Is it the final stages of cynicism amongst Chinese youth remains to be seen.

Reference:

China’s Gen Z is dejected, underemployed and slowing the economy, Bloomberg News, 25 July 2022

Inflation is a Tax on the Poor!

Malaysia can experience a stronger inflation rate in the August-September period, 5% before any drop later in the year. The country’s headline inflation rose to 4.4% year-on-year (yoy) in July 2022 (June 2022: 3.4%) – the highest since April 2009 – largely due to higher food prices and low base effect.

Price increases involving Gardenia products which rose by 7%-20% effective Sept 1 may be deemed small in impact, considering bread & bakery products account for only 1.2% of the consumer price index (CPI) basket.

Apart from food inflation, Department of Statistics Malaysia (DOSM) said the increase in Malaysia's inflation was also due to the lower base effect last year, when an electricity bill discount of 5% to 40% was given to domestic consumers according to their total usage under the National People's Well-being and Economic Recovery Package (Pemulih) from July to September 2021.

For July 2022, apart from the food and non-alcoholic beverage group, all other groups within the CPI also continued to record y-o-y increases, except the communication segment, which remained unchanged, said DOSM

For 2022F CPI projection is at 3.1% (2023F: 3.2%). Globally, food inflation will average at 4.5% for 2022, compared to 1.5% in 2021. 

Malaysia’ net imports of food is over RM60 billion annually. Exchange rate depreciation only accentuates this cost.

BNM has raised OPR further by 25 bps to 2.5% on September 8 and a further 25 bps to 2.75% is expected by early November (2nd/3rd). Unfortunately, BNM is not moving aggressively to stem inflation which then impacts on exchange rate. Growth matters. But to hold back rate increases does not help either growth or inflation. First stem inflation, then focus on growth. Otherwise the poor are being taxed – because inflation impacts the poor more than the rich.

 

References:

Inflation in Malaysia poised to continue rising in 3Q 2022 before subsiding, Cheah Chor Sooi, Focus Malaysia, 30 August 2022

Malaysia’s July inflation hits 4.4% bolstering bets on another OPR hike, Justin Lim, TheEdge CEO Morning Bried, 30 August 2022

Will 13% of All Singaporeans Be Millionaires in 2030?

In eight years’ time, more than 13 per cent of adults in Singapore will be worth more than US$1 million (RM4.47 million). This is a proportion higher than the United States, China and 12 other Asia-Pacific economies, said an HSBC report. In Singapore, Australia, Hong Kong and Taiwan, there are likely to be more millionaires on a relative basis than in the US, with South Korea and New Zealand coming close, the report also said.

Comparatively, the US is expected to have 8.8 per cent of its adult population as millionaires by 2030 while the figure for China is expected to be 4.4 per cent.

Source: https://sg.news.yahoo.com/

Singapore is expected to see its share of millionaires among its residents, which comprise permanent residents and citizens, grow from 7.5 per cent in 2021 to 9.8 per cent in 2025 and up to 13.4 per cent by the end of the decade. In absolute terms, this means that the number of millionaires in Singapore will rise to 700,000 in 2030, up from 400,000 currently.

The report by HSBC, titled “The Rise of Asian Wealth”, looks at the rise of wealth in Asia. Among other things, the report examines the projected number of residents that will reach certain wealth brackets in the coming years.

It does so based on the residents’ bank deposits, investments in bonds and equities, assets held by pension funds or insurance companies, as well as their real estate holdings after deducting any outstanding mortgage amounts. It compares 15 economies in the region, including Singapore, China, Japan, Malaysia and Taiwan.

The report said that currently, Singapore has the second-highest (7.5 per cent) number of millionaire adults based on the percentage share of its population, just after Australia (8 per cent) and ahead of Taiwan (5.9 per cent).

By 2030, Singapore will take the top spot at 13.4 per cent, followed by Australia (12.5 per cent) and Hong Kong (11.1 per cent). By the end of 2030, only around 4 per cent of adults in mainland China and less than 1 per cent of adults in India are likely to be millionaires, noted the report.

However, in absolute numbers, China will continue to have the highest number of millionaires, rising from about 17 million currently to 50 million by the end of the decade. This figure is projected to rise to nearly 80 million by 2035.

The number of millionaires in India is also set to hit 6.6 million by 2030, exceeding the whole of the Association of Southeast Asian Nations (Asean) region, said the report.

However, it noted that the large number of millionaires in some of these economies can be explained due to the large sizes of their population, on top of their wealth distribution and level of economic development.

At the slightly lower end of the income bracket, Singapore is also expected to see the proportion of its residents having at least US$250,000 of wealth standing at 67 per cent by 2030, up by about 10 percentage points from 2021. In terms of the percentage share of the population, this will make Singapore the second-highest city in the region with individuals of this net worth, just after Australia at 70.8 per cent. Both economies also occupy the same top two spots in this category in 2021.

In China, the number of adults with a net wealth of at least US$250,000 is expected to double by 2030 to around 350 million, while the figure in India could triple to 57 million.

Region-wide, the number of millionaires is projected to jump from about 30 million currently to more than 76 million by the end of the decade. The report said that economies that are growing more rapidly tend to accumulate wealth faster.

For example, Vietnam, the Philippines and India are expected to see the number of adults holding wealth of at least US$250,000 more than double by 2030, with Indonesia and Malaysia “not far behind”. 

Malaysia’s problems are corruption and the race and religion card used by politicians since 1957. Otherwise the future is really positive for a nation blessed with natural resources and inherently tolerant and friendly people!

Reference:

HSBC report: 13pc of Singapore population to become millionaires by 2030, highest proportion among Asia-Pacific economies, Malay Mail, 17 August 2022

Homo Corruptus or Homo Sapiens?

Although we are Homo sapiens or "wise man” in Latin, another primate species is fast evolving. It’s Homo corruptus. This species is thriving in the Age of Corruption and Malaysia is one of the fertile grounds for its rise.

It seems to have become an epidemic in Malaysia. Hopefully, not a pandemic.  The SRC, 1MDB financial scandals and now the fiasco of littoral combat ships (LCS).

Malaysians are tired of our leaders dipping into Malaysia’s Treasury and then saying we have no money for projects or cost of living subsidies. 

The World Bank estimates international bribery exceeds US$1.5tril (RM6.734tril) annually, or 2% of global GDP and 10 times more than total global aid funds. Other estimates are higher at 2% to 5% of global GDP. Corruption permeates all levels of society, from low-level public servants accepting petty bribes to national leaders stealing millions or billions of dollars.

Source: https://blog-pfm.imf.org

We see that clearly in South Korea. In South Korea, presidential pardons are almost always given for the rich and well-connected convicted Homo corruptus. Surprisingly, South Koreans, whose fierce protests toppled a disgraced President, accepted the government’s reason for pardon, with a public poll showing almost 70% support. In Malaysia, growing calls are made to pardon Najib (and maybe Rosmah and the rest).

It seems all the kleptocrats would like a pardon. Just like the last days of Trump. If we grant pardons to all then that sets a new standard – be corrupt and steal as much as you want, because we are so compassionate that we will, of course, grant you a pardon. It makes no moral or religious sense. Why have a judiciary, AG or the police? We can all swear by our holy books that we are innocent of the crimes committed – even if there is irrefutable evidence. Surely hearsay and an oath should be enough to persuade the majority of our innocence? What foolishness!

In the coming general election, we citizens of Malaysia cannot vote for Homo Corruptus candidates. Or, we will be a failed state!

Reference:

The rise of “Homo corruptus” in our midst, June HL Wong, The Star, 24 August 2022

Climate Change and its Impact

There is a 50:50 chance of the annual average global temperature temporarily reaching 1.5 °C above the pre-industrial level in one of the next five years. The likelihood is increasing with time, according to a new climate update issued by the World Meteorological Organization (WMO).

There is a 93% likelihood of at least one year between 2022-2026 becoming the warmest on record and dislodging 2016 from the top ranking. The chance of the five-year average for 2022-2026 being higher than the last five years (2017-2021) is also 93%, according to the Global Annual to Decadal Climate Update, produced by the United Kingdom’s Met Office

Source: https://climate.nasa.gov

The chance of temporarily exceeding 1.5°C has risen steadily since 2015, when it was close to zero.  For the years between 2017 and 2021, there was a 10% chance of exceedance. That probability has increased to nearly 50% for the 2022-2026 period.

The Paris Agreement sets long-term goals to guide all nations to substantially reduce global greenhouse gas emissions to limit the global temperature increase in this century to 2 °C while pursuing efforts to limit the increase even further to 1.5 °C. The Intergovernmental Panel on Climate Change says that climate-related risks for natural and human systems are higher for global warming of 1.5 °C than at present, but lower than at 2 °C.

In 2021, the global average temperature was 1.1 °C above the pre-industrial baseline, according to the provisional WMO report on the State of the Global Climate. Back-to-back La Niña events at the start and end of 2021 had a cooling effect on global temperatures, but this is only temporary and does not reverse the long-term global warming trend. Any development of an El Niño event would immediately fuel temperatures, as it did in 2016, which is until now the warmest year on record.

The findings of the annual update include:

• The annual mean global near-surface temperature for each year between 2022 and 2026 is predicted to be between 1.1 °C and 1.7 °C higher than preindustrial levels (the average over the years 1850-1900).

• The chance of global near-surface temperature exceeding 1.5 °C above preindustrial levels at least one year between 2022 and 2026 is about as likely as not (48%). There is only a small chance (10%) of the five-year mean exceeding this threshold.

• The chance of at least one year between 2022 and 2026 exceeding the warmest year on record, 2016, is 93%. The chance of the five-year mean for 2022-2026 being higher than the last five years (2017-2021) is also 93%.

• Predicted precipitation patterns for 2022 compared to the 1991-2020 average suggest an increased chance of drier conditions over southwestern Europe and southwestern North America, and wetter conditions in northern Europe, the Sahel, north-east Brazil, and Australia.

• Predicted precipitation patterns for the May to September 2022-2026 average, compared to the 1991-2020 average, suggest an increased chance of wetter conditions in the Sahel, northern Europe, Alaska and northern Siberia, and drier conditions over the Amazon.

• Predicted precipitation patterns for the November to March 2022/23-2026/27 average, compared to the 1991-2020 average, suggest increased precipitation in the tropics and reduced precipitation in the subtropics, consistent with the patterns expected from climate warming.

For Malaysia, climate change is expected to have considerable impact. Increasing temperatures mean more heat waves. Variations in precipitation will increase in frequency. Sea levels will rise and inundate some coastal areas. The main contributors to emissions are fossil fuels and deforestation. We hope to reach net zero emissions by 2050 – is this for real? Why? Deforestation and fossil fuels remain firmly entrenched. Sahabat Alam Malaysia has stated that a survey by the Rimba Disclosure Project (“RDP”), forests totalling an area nearly the size of Singapore is earmarked for clearing in Peninsular Malaysia. We need a Minister for Climate Change – the present Minister of Environment and Water is not tuned to climate but more well versed in religious affairs! Greater public awareness is another must.

Reference:

50:50 chance of global temperature temporarily reaching 1.5oC threshold in next 5 years, World Meteorological Organisation, 90 May 2022

12 Proven Tips to Sleep Better

A good night’s sleep is just as important as regular exercise and a healthy diet. Research shows that poor sleep has immediate negative effects on your hormones, exercise performance, and brain function. It can also cause weight gain and increase disease risk in both adults and children. In contrast, good sleep can help you eat less, exercise better, and be healthier. If you want to optimize your health or lose weight, getting a good night’s sleep is one of the most important things you can do.

Source: https://www.medicalnewstoday.com

1. Increase bright light exposure (during the day)

Your body has a natural time-keeping clock known as your circadian rhythm. It affects your brain, body and helping you stay awake and telling your body when it’s time to sleep. 

Natural sunlight or bright light during the day helps keep your circadian rhythm healthy. This improves daytime, as well as night time sleep quality and duration. In people with insomnia, daytime bright light exposure improved sleep quality and duration. It also reduced the time it took to fall asleep by 83%.

A similar study in older adults found that 2 hours of bright light exposure during the day increased the amount of sleep by 2 hours and sleep efficiency by 80%.

While most research involves people with severe sleep issues, daily light exposure will most likely help you even if you experience average sleep.

2. Reduce blue light exposure (in the evening)

Exposure to light during the day is beneficial, but nighttime light exposure has the opposite effect. Again, this is due to its effect on your circadian rhythm, tricking your brain into thinking it’s still daytime. This reduces hormones like, which help you relax and get deep sleep.

Blue light — which electronic devices like smartphones and computers emit in large amounts is the worst in this regard.

There are several popular methods you can use to reduce nighttime blue light exposure. These include:

• Wear glasses that block blue light. 

• Install an app that blocks blue light on your smartphone. These are available for both iPhones and Android models.

• Stop watching TV and turn off any bright lights 2 hours before heading to bed.

3. Don’t consume caffeine late in the day

Caffeine has numerous benefits and is consumed by 90% of the U.S.

A single dose can enhance focus, energy, and sports performance. However, when consumed late in the day, caffeine stimulates your nervous system and may stop your body from naturally relaxing at night.

In one study, consuming caffeine up to 6 hours before bed significantly worsened sleep quality. 

Caffeine can stay elevated in your blood for 6–8 hours. Therefore, drinking large amounts of coffee after 3–4 p.m. is not recommended, especially if you’re sensitive to caffeine or have trouble sleeping.

4. Try to sleep and wake at consistent times

Your body’s circadian rhythm functions on a set loop, aligning itself with sunrise and sunset. Being consistent with your sleep and waking times can aid long-term sleep quality.

One study noted that participants who had irregular sleeping patterns and went to bed late on the weekends reported poor sleep. Other studies have highlighted that irregular sleep patterns can alter your circadian rhythm and levels of melatonin, which signal your brain to sleep.

If you struggle with sleep, try to get in the habit of waking up and going to bed at similar times. After several weeks, you may not even need an alarm.

5. Don’t drink alcohol

Having a couple of drinks at night can negatively affect your sleep and hormones.

Alcohol is known to cause or increase the symptoms of sleep apnea, snoring, and disrupted sleep patterns It also alters night time melatonin production, which plays a key role in your body’s circadian rhythm.

Another study found that alcohol consumption at night decreased the natural night time elevations in.

6. Optimize your bedroom environment

Many people believe that the bedroom environment and its setup are key factors in getting a good night’s sleep. These factors include temperature, noise, external lights, and furniture arrangement.

Numerous studies point out that external noise, often from traffic, can cause poor sleep and long-term health issues. In one study on the bedroom environment of women, around 50% of participants noticed improved sleep quality when noise and light diminished.

To optimize your bedroom environment, try to minimize external noise, light, and artificial lights from devices like alarm clocks. Make sure your bedroom is a quiet, relaxing, clean, and enjoyable place.

7. Set your bedroom temperature

Body and bedroom temperature can also profoundly affect sleep quality. As you may have experienced during the summer or in hot locations, it can be very hard to get a good night’s sleep when it’s too warm. One study found that bedroom temperature affected sleep quality more than external noise. Other studies reveal that increased body and bedroom temperature can decrease sleep quality and increase wakefulness. Around 70°F (20°C) seems to be a comfortable temperature for most people, although it depends on your preferences and habits.

8. Don’t eat late in the evening

Eating late at night may negatively affect both sleep quality and the natural release of HGH and melatonin. That said, the quality and type of your may play a role as well.

In one study, a high carb meal eaten 4 hours before bed helped people fall asleep faster.

Interestingly, one study discovered that a low carb diet also improved sleep, indicating that carbs aren’t always necessary, especially if you’re used to a low carb diet.

9. Relax 

Many people have a pre-sleep routine that helps them relax. Relaxation techniques before bed have been shown to improve sleep quality and are another common technique used to treat insomnia.

In one study, a relaxing massage improved sleep quality in people who were ill.

Strategies include listening to relaxing music, reading a book, taking a hot bath, meditating, deep breathing, and visualization. Try out different methods and find what works best for you.

10. Take a relaxing bath or shower

A relaxing bath or shower is another popular way to sleep better. Studies indicate that they can help improve overall sleep quality and help people — especially older adults — fall asleep faster.

In one study, taking a hot bath 90 minutes before bed improved sleep quality and helped people get more deep sleep. Alternatively, if you don’t want to take a full bath at night, simply bathing your feet in hot water can help you relax and improve sleep.

11. Exercise regularly 

Exercise is one of the best science-backed ways to improve your sleep and health. It can enhance all aspects of sleep and has been used to reduce symptoms of insomnia.

One study in older adults determined that nearly halved the amount of time it took to fall asleep and provided 41 more minutes of sleep at night. In people with severe insomnia, exercise offered more benefits than most drugs. Exercise reduced time to fall asleep by 55%, total night wakefulness by 30%, and anxiety by 15% while increasing total sleep time by 18%.

Although daily exercise is key for a good night’s sleep, performing it too late in the day may cause sleep problems. This is due to the stimulatory effect of exercise, which increases alertness and hormones like epinephrine and adrenaline.

12. Don’t drink any liquids before bed

Nocturia is the medical term for excessive urination during the night. It affects sleep quality and daytime energy. Drinking large amounts of liquids before bed can lead to similar symptoms, though some people are more sensitive than others.

Although hydration is vital for your health, it’s wise to reduce your fluid intake in the late evening. Try to not drink any fluids 1–2 hours before going to bed. You should also use the bathroom right before going to bed, as this may decrease your chances of waking in the night.

The bottom line

One large review linked insufficient sleep to an increased risk of obesity by 89% in children and 55% in adults.

Other studies conclude that getting less than 7–8 hours per night increases your risk of developing heart disease and type 2 diabetes.

In some people, lack of quality sleep makes them irritable and difficult the next day. Office colleagues suffer because their output is impacted by what you say or do. So, try to get some sleep today!

Reference:

17 Proven tips to sleep better, Rudy Mawer, www.healthline.com

Is Malaysia’s Property Sector Bleaker in 2H 2022?

The year 2022 started off on a positive note with the property sector poised for a long overdue rebound. This was in tandem with post-pandemic economic recovery. But sentiment has now weakened.

According to Hong Leong Investment Bank (HLIB) Research, Bank Negara Malaysia’s (BNM) interest rate upcycle as well as the rising inflationary pressure will negatively impact buyers’ purchasing power.

Moreover, property developers are also facing their own set of challenges that range from elevated building material pricing to labour shortage and rising financing costs. 

Source: https://sea.mashable.com

There is a lack of visibility on when the challenges faced by the developers will start to ease. Demand outlook has also weakened with the current interest rate upcycle and inflationary pressure.

The National Property Information Centre’s (NAPIC) data, suggests that the number of residential property transaction was down -10% quarter-on-quarter (qoq) due to a higher base from the previous quarter as buyers took advantage of the Home Ownership Campaign (HOC) prior to its expiry in end-2021. Nevertheless, this was still a +10.5% year-on-year (yoy) improvement from better sales following economic re-opening.

Unsold units eased slightly at -3.4% qoq but increased +21.5% yoy and remained at an elevated level. As such, the property overhang issue will likely continue to exert pressure on housing price as witnessed by the Malaysia House Price Index (HPI) which came down -2% qoq.

HLIB Research expects property developers to be more cautious in their project launches under a rising and volatile cost environment as any cost increase is likely to compress their margin.

Labour shortage would delay (i) project execution timeline; (ii) revenue recognition; and (iii) cash flows to developers. In addition, the interest rate hike would also increase the financing cost for developers.

As observed by HLIB research, the KL Property (KLPRP) Index’s 1H 2022 performance was in line with its narrative as the index started off the year with gains of +2% in 4M 2022, indicating a sense of optimism.

But this has now been dampened with interest rate hikes and poorer economic prospects globally. Planners, developers, regulators and economists have to work on an action plan to revive the housing sector for the benefit of the B40 and M40 groups. Otherwise, we will continue to build units that will remain unsold for long periods. We can’t afford to have another “Forest City” in other parts of this nation.

Reference:

Malaysia’s property sector outlook turns bleaker in 2H 2022, Cheah Chor Sooi, Focus Malaysia, July 14, 2022

One Country, Two Programmes!

Malaysia’s Home minister perceives the Premium Visa Programme will attract affluent individuals from all countries. This new premium visa programme will draw rich investors to settle in the country, similar to Golden Visa initiatives in Singapore, Thailand and Portugal.

The number of applicants will be capped at 1% of the Malaysian population. This limit includes the number of participants under the Malaysia My Second Home (MM2H) programme. The PVIP does not replace the MM2H programme aimed at retired foreigners seeking to settle in Malaysia. Participants are not eligible for citizenship.

Applicants must have at least RM1 million in their bank account and are only allowed to withdraw 50% of that amount after a year for the purchase of property or to pay for medical and educational expenses.

Successful applicants are allowed to bring their spouses, children, parents, in-laws and domestic workers as dependents subject to existing immigration laws.

Applications for the PVIP open on Oct 1. Those eligible are individuals of all ages with an offshore income of at least RM40,000 a month or RM480,000 a year.

Applicants will have to pay a one-off RM200,000 participation fee. A one-off RM100,000 fee will be levied for each dependent. Children of participants over the age of 21 are not considered dependents and must apply to be a PVIP participant to remain in the country.

Applicants and dependents will also need to submit a Letter of Good Conduct from the authorities of the country they are currently residing in.

The PVIP is applicable for 20 years, with renewals granted once every five years. This process includes having a valid passport, updating personal information, screening by the police and medical checks in Malaysia. Applicants and dependents must also have health insurance.

As part of the benefits of the PVIP, participants will be allowed to buy properties (subject to state laws), study, invest and conduct business.

The Government is targeting 1,000 participants in the first year that will contribute RM200 million to the economy and fixed deposits of RM1 billion.

Meanwhile, Sarawak invites qualified citizens of foreign countries to retire and reside there. It is open to citizens of countries recognized by Malaysia, regardless of race, religion and gender.

All main applicants are to fulfill certain personal and financial criteria set by the Sarawak Government. Successful applicants are granted multiple-entry social visit pass for a period of 10 years and this is renewable. They are allowed to bring with them their spouses and unmarried children below the age of 21 as dependents.

Of the above, guess which is more attractive? It’s a no-brainer,  Sarawak wins hands down. Why would anyone want this Premium Visa Programme (“PVP”)? If I were to consider PVP, I would rather go to Singapore, Thailand or Portugal – because Malaysia is great with “flip-flop” policies. Otherwise, I will see you in Sarawak!

References:

Govt rolls out premium visa programme to draw rich investors, FMT, 1 Sept 2022

S-MM2H visa permit, benefits & incentives (https://mm2h.co/s-mm2h-benefits-incentives/)