Selamat Hari Kebangsaan

 

Revenue Statistics in Asia and the Pacific 2023 - Malaysia

 

Recently, the Deputy Finance Minister said nearly RM105 billion has been collected as tax revenue as at end July 2023. This was up 30% from 2022. A new record in collection is expected by end of this year – another RM75 billion for the remaining five months (August to December)?  That will make income tax collection to reach RM180 billion? Hopefully, that will reduce fiscal deficit (5% of GDP) and provide sufficient funding to support the B40 group.

References:

Revenue statistics in Asia and the Pacific 2023 – Malaysia, OECD

Income tax collection heading to record high, FMT Reporter, 17 August 2023

Demand for Data Centres?

The real estate market is seeing a steady growth in demand for data centres. There is keen interest from both local and foreign investors. Malaysia has received RM76bil worth of investments involving data centres from 2021 until March 2023. The Government wants the country to be a regional data centre hub – in ASEAN and Asia.

Knight Frank in its Data Centre Research Report for Malaysia states that the development of the country’s data centre industry has primarily taken place in two main regions, namely Greater Kuala Lumpur (comprising central Kuala Lumpur and Cyberjaya) and Johor. Knight Frank says the Asia-Pacific region’s data centre landscape is currently experiencing robust growth, fuelled by a rising demand for cloud computing, big data and eCommerce.

According to Knight Frank, within the Greater Kuala Lumpur area, Cyberjaya has emerged as the key data centre hub serving the rest of Malaysia. Additionally, Knight Frank says the Malaysia Digital Economy Corp, which manages Cyberjaya, has been collaborating with the government and utility companies to ensure adequate power supply, making it an attractive location for data centre development.

Whilst Cyberjaya remains the premier data centre location in the greater Kuala Lumpur area, Knight Frank says new locations such as Bukit Jalil and Petaling Jaya are also seeing an uptick in demand from customers and operators alike.

Industrial lands next to the Tenaga Nasional Bhd’s pylons and substations (for example, Sedenak, Johor) have become more premium. Although data centres are not labour intensive, they however open up new investment opportunities for investors.

According to Knight Frank, Johor is becoming an increasingly important location for data centres in Malaysia and a viable alternative hub for South-East Asia. Due to its close proximity to Singapore, favourable support from local authorities and availability of land and power, Johor is an attractive location for those seeking an alternative hub.

Knight Frank says that currently, the market has 33 megawatts of live and pipeline capacity, with most of the facilities under construction or in the planning stages. These facilities are primarily build-to-suits for Western and Chinese cloud providers, as well as regional tech companies.

KGV International Property Consultants (M) Sdn Bhd says there are several reasons for the popularity in demand for data centres in Johor. Singapore is very stringent on new data centres and hence, Johor is the next alternative. Johor Bahru’s proximity to Singapore is also a major factor, as it can be linked by fibre optics to Singapore. There are already some ports in Johor Bahru for that purpose.

The availability of power, water and data lines, which are imperative for smooth operations of data centres, are easy to come by in Johor Bahru. The encouragement by the government to attract data centres to the state is also another positive point.

The development of data centres in Johor is focused in three main areas, namely the Nusajaya Tech Park, Sedenak Tech Park and YTL Green Data Centre Park. It is anticipated that the data centre market in Johor will grow significantly, surpassing even the Greater KL region in terms of live capacity. Early movers into Johor include the likes of Keppel, Bridges and Yondr, who have all secured multi-megawatt hyperscale contracts from either Chinese or Western Cloud companies.

This is a good start and niche for Malaysia. We need to constantly improve the environment/landscape to have more data centres including perhaps in Penang. We could identify other industries that find it difficult to operate in Singapore, Hong Kong or Tokyo and help them relocate to Malaysia. That provides technology, investments and jobs/skills for the future.

Reference:

Dynamic market potential, Eugene Mahalingam, The Star, 19 August 2023

Five Reasons Why Malays are Anti-DAP: Do You Believe This?

 A former Perikatan Nasional (PN) cybertrooper leader has shared as to why Malays are not fond of DAP:

Reason 1

DAP won many parliamentary seats, the most within the coalition government (40 seats) yet they are content with having only four cabinet ministers. Their rationale is that they want to ensure that the stability of the country is guaranteed.

“Malays don’t like this kind of behaviour. If we are able to win more seats, then we should deserve even more ministerial positions,” quipped the cybertrooper.

Source: https://focusmalaysia.my

Reason 2

Again in Perak, DAP won the most number of state seats (18) during the state election which was held in tandem with the GE15 on Nov 19 last year.

“But they can humbly surrender the Menteri Besar (MB) post to the Malays,” lamented the netizen. “MB Datuk Seri Saarani Mohamad is from UMNO. How can you simply surrender your right to someone else? By right, if you win big, you deserve to be the MB.”

Reason 3

Although DAP is known to be a Chinese majority party, it has been fielding Malay candidates for both the parliamentary and state-level elections. And they have no problem winning.

 “When they (DAP) do this, the Malays have a headache. They couldn’t believe their eyes that DAP truly fielded Malay candidates … not any candidate but those with charisma and qualifications. So in short, they (DAP) won in Chinese area and won again in Malay area. Therefore the Malays dislike DAP.”

Reason 4

Malays cannot accept the fact that while DAP does have many ministers, their ministers always render outstanding performances.

 “A good example is (Transport Minister) Anthony Loke who is the No. 1 performer whether it comes to LRT (Light Rail Transit) or buses—two modes of transportation in which the Malays (both adults and children) are the biggest users.

Housing and Local Development Minister, Ngar Kor Ming has no qualms about repairing houses in the Malay area. Aside from ensuring the fire brigade service gets better facilities, he also fought for the allowances of the fire brigade staff to be increased.”

Reason 5

This is the reason most disliked by the Malays. Penang is deemed a DAP state, yet a big allocation of close to RM1 billlion is set aside for the Muslim community.

“The hufaz (people who are able to memorise the Quran) are given priority, KAFA (Quran and Fardu Ain) teachers get a raise in their allowance while mosques are being upgraded, religious functions can take place smoothly without disturbances and even the azan (call for prayers) can be heard up to twice at dawn,” explained the netizen.

“By right, DAP should focus only on caring for the welfare of non-Muslims instead of messing up with the welfare for the Muslims. Such virtuous acts have caused headaches among Muslims who reckon that it would be better for them to vote for DAP who is able to look after their welfare instead of voting for states with so-called Islamic administrations like in Kedah where water supply is scarce or in Kelantan where the water is murky.”

I personally don’t believe this. But you be the judge. Doing good is not acceptable? Excelling in your work is considered wrong behaviour? Supporting another community who are all Malaysians is a sin? What sort of negative thinking is this? I rather have any party be it DAP or PAS that do good for all Malaysians!

Reference:

Ex-head of PN Cybertroopers shares 5 reasons why Malays are anti-DAP, Focus Malaysia, 16 August 2023

Is Malaysia’s Gross Fixed Capital Formation (“GFCF”) Slow?

 Investments in Malaysian fixed assets are below pre-pandemic levels but also underperforming against neighbouring countries like Singapore and Indonesia in 2022.

With the economy expected to hit a soft patch, fixed asset investments or gross fixed capital formation (GFCF) could potentially grow slower in 2023 following a 6.8% expansion in 2022.

The country’s Leading Index (LI) has remained in the negative territory, registering a decline of 2.7% in April and 1.1% in May. The LI is a predictive tool used to anticipate economic upturns and downturns in an average of four to six months ahead.

Source: https://www.businesstoday.com.my

The private sector, which contributes almost 78% of the GFCF, is affected by the high cost of doing business and the weak export performance. Private investments are likely to grow moderately by 4% to 5% in 2023.

The country recorded approved FDIs of RM208.6bil and RM163.3bil in 2021 and 2022 respectively. The Statistics Department reported recently that Malaysia’s GFCF was at RM297.82bil at constant prices, marking a 6.8% increase from RM278.98bil in 2021. In pre-pandemic 2019, the value of Malaysia’s GFCF stood at RM328.54bil.

For comparison, Indonesia’s GFCF grew by 9% in 2022, while Singapore recorded a growth of 8.7%. Fixed asset investment in Thailand increased by 6.8%.

GFCF remained the second largest component of the country’s GDP, with a share of 19.7% of the total economy. The private sector was the major contributor to the GFCF with a share of 77.8%, registering an expansion of 7.2% as compared to the preceding year. In addition, investments by the public sector also increased by 5.3% as compared to a decline of 11.1% in 2021.

The services and manufacturing activities were the main contributors to the GFCF of the private sector. The share of services activity jumped to 63.6%. Manufacturing activity upholds its position as the second largest contributor with a share of 22.8% as compared to 22.1% in the previous year.

Meanwhile, positive growth in fixed assets in the manufacturing sector at 9.9% was led by strong performance in the food, beverages and tobacco (2022: 14.1%) and non-metallic mineral products, basic metal and fabricated metal (2022: 13.9%) sub-sectors. Investments into the sub-sector of electrical, electronic, optical products and transport equipment also increased to 9.4%.

Against the above backdrop, some believe Malaysia’s economy has “somewhat come out of the woods”. This optimism is based on confidence, governance, engagement and IMF’s forecast for global growth of 3% in 2023. But international trade and indicators of demand and production in manufacturing point to further weakness (IMF). The other issue is inflation – war, climate change and supply disruption could elevate inflation and further risk rate hike! So, we need to be cautiously optimistic and tailor policies and procedures for GFCF to improve!

Reference:

Fixed-asset investments fall short, Ganeshwaran Kana, The Star, 26 July 2023

EPF’s 1H2023 Results Are Impressive!

The Employees Provident Fund (EPF) recorded total investment income of RM33.19 billion for the first half of the year ended June 30, 2023 (1H2023), up RM9.44 billion or 39.7% from the RM23.75 billion recorded for the corresponding period in 2022.

The retirement fund said the amount was arrived at after netting off listed equity write-downs recorded for the period under review.

It said out of the RM33.19 billion total investment income, RM4.79 billion was generated from mark-to-market (MTM) gains in securities that had not been realised. This is just “paper profits”. MTM gains were mainly due to fluctuations in foreign exchange rates.

The EPF’s total investment income for the second quarter (2Q2023) was RM18.03 billion, up RM9.05 billion from RM8.98 billion recorded for the same quarter last year. Equity investments continued to be the main contributor of income in 2Q2023 at RM9.60 billion. In comparison, the asset class generated RM4.07 billion in income during the corresponding quarter in 2022.

A significant portion of the improvement was due to proactive and timely realisation of profits, supported by the MTM gains in securities. After taking into account the write-downs, these numbers accounted for 53% of total investment income for the quarter.

Due to active portfolio management by the EPF’s fund managers, write-downs for 2Q2023 were minimal at RM350 million, compared with the RM2.15 billion recorded for the same quarter a year earlier. 

If this trend continues, it is good news for contributors in 2024. The dividend to be received could be higher than 5.35% declared for 2022. Let’s just hope this institution remains professionally run without any political interference.

Reference:

EPF records RM33.19b investment income for 1H2023, up 39.7% y-o-y, Surin Murugiah, TheEdgeMalaysia.com, 16 August 2023

GDP Forecast Lowered?

As Malaysia's Industrial Production Index (IPI) declined 2.2% year-on-year (y-o-y) in June 2023, economists remain cautious on the industrial production outlook. The Department of Statistics, Malaysia (DOSM) on Aug 8 stated that Malaysia's IPI contraction (in June) from positive growth of 4.7% y-o-y in May 2023 was mainly attributed to lower output from the manufacturing and mining sectors. This is the second contraction recorded in 2023.

The manufacturing sector registered a negative growth of 1.6% in June 2023 against a 5.1% increase recorded in May 2023, while the mining sector contracted 6.4% in June compared to a 2.9% growth in May. Meanwhile, the output growth of the electricity sector moderated to 2.8% in June 2023 from 5.9% in the preceding month. On a month-on-month (m-o-m) comparison, the IPI, however, grew 2.2% after surging 7.3% the previous month.

Source: https://www.wikiimpact.com

For the first six months of 2023, IPI growth moderated to 1.3% as compared to 5.4% recorded in the same period of the previous year. The expansion was supported by the manufacturing index (+1.7%) and the electricity index (+1.6%). The mining index inched down by 0.4%.

RHB Research cut Malaysia’s gross domestic product (GDP) forecast to 3.5% y-o-y from its previous estimate of 4.5% y-o-y in view of lacklustre performance in both the manufacturing and services sectors.

However, the research house maintained its recovery view for the second half of 2023 with GDP growth averaging at 5.2% y-o-y.

RHB expects the IPI momentum to stabilise in the upcoming months with m-o-m growth averaging around 0.3% to 0.4%, in tandem with gradual improvement in trade activities and external demand.

Looking into 2H2023, RHB expects the growth driver to be externally facing sectors, namely the manufacturing sector, given the recovery of the global economy and improvement in external demand, alongside the regularisation of retail sales and consumer spending amid higher living costs and the dissipation of pent-up demand.

The research outfit pointed out that the softening of manufacturing sector activities was driven mainly by export-oriented industries where output declined 3.9% y-o-y compared to 2.8% in May.

MIDF Research said the pace of decline in IPI growth was sharper than market forecasts, with expectation that the weakness, particularly in mining and manufacturing sectors, could follow in a similar trend in export performance.

MIDF said while the slower production in the construction sector may result in slower investment and business spending, it expects this will be offset by rising consumer spending and recovery in services exports, adding that these will drive Malaysia's GDP growth in the remainder of 2023.

Additionally, the recent purchasing managers' index (PMI) for the manufacturing sector indicated that businesses scaled back production and hirings due to softening demand. MIDF warned that should production continue to decline, it will impact the outlook for both energy demand and electricity output.

MIDF maintained its 2023 IPI growth forecast at 2.2% as it anticipates production and overall economic growth to moderate this year. Nonetheless, it remains cautious that the outlook could be weaker than expected considering that IPI growth moderated at 1.3% y-o-y in 1H2023, compared to 5.4% y-o-y in 2HFY2022.

What does all this mean? If we are aiming to be in the top 30 economies in the world, then we need to change course rapidly and find growth drivers in services, manufacturing and/or consumption. In addition, projects in green and sustainable energy need to be effected quickly. Unless we see appreciable investments and sustained consumption, we are not in a position to offset external headwinds in the trade sector.

Reference:

Economists caution weaker-than-expected industrial output outlook, GDP forecast lowered, Reyanna Ng & Justin Lim, theedgemalaysia.com, 9 August 2023 

Green Wave: What is the Alternative?

My apologies, this article on a Tuesday is in breach of my internal guideline – Tuesdays are for market or sector reports.

The PM cannot match PN’s identity politics. It has to be economic recovery and institutional reforms. The latter means address corruption and improve efficiency.

The PM’s unique selling point must be a Malay led Government can be progressive and will celebrate the diversity of Malaysia. It follows Dubai, Qatar or Bahrain, not Iran, Afghanistan or Pakistan. There are some who, however, believe that the desire for a more religious and racially-oriented narrative is regardless of socio-economic status of the rakyat. And some further believe that we are a nation in transition – from a flawed Westminster-style secular constitutional democracy to an undefined Islamic state

Source: https://focusmalaysia.my

The ascendancy of political Islam has been growing since the 80s. The so-called “Little Napoleons” are growing in number at various levels and are emboldened to implement shariah-style measures. It is an administrative fiat. An example is the dress code. We have gaming banned; alcohol removed in PN controlled states. Next is bak kut teh?

Many Islamists would love Malaysia to replace the Constitution with the Quran. The shariah law over the civil code. Can a moderate Muslim accept this? It is difficult for the so-called moderates to stand apart! Doesn’t this affect private investment? Of course it does but that is secondary in the scheme of things.

What is the PM’s dilemma?

The Chinese and Indian support for PH is solid – maybe as high as 90% in some constituencies. Despite the bashing DAP faced, they voted for DAP. So, if Anwar adopts more-Malay policies, DAP’s support base will shrink. The Nons will refuse to vote next time round. That is victory for PN by default!

So, what is the alternative?

The PM, as said earlier, could galvanise his Madani Economy Framework and institute much needed reforms in the executive and legislative – some of which have been announced or are in place. But many more remains to be done.

We need the “Sarawak model” of socio-economic interactions. A clear alternative has to be presented. Sarawak has a happy history of co-existence of religious and ethnic diversity. This has to be promoted –from education, religious tolerance to economic endeavours. More Sarawakians need to be holding key positions in the Cabinet. In fact and maybe, we could have a PM from Sarawak?

If the alternative narrative is not promoted actively at street and village level, the “Green Wave” will only gather more strength. Underlying all of this, we need prayer to change the landscape of hate, division and discord to one of love, unity and harmony.

References:

Why Hadi is the face of Malaysia’s future, Dennis Ignatius, 13 June 2023

Analysts: Anwar must focus on economy after Malaysian opposition’s success at polls, Iman Muttaqin Yusof, Benar News, 14 August 2023

Comment: Green Wave is M’sia state elections? Yes, but it’s the same Green Wave, James Chin, Mothership, 15 August 2023

Can We Stop the “Green Wave”?

Political scientist Azmil Tayeb published an academic report before the election last year, explaining the dominance of PAS in Kelantan. The report reveals that PAS builds connections at the grassroots level through state government agencies. PAS has village chiefs or “Intelligence Collectors” and acts as coordinators between representatives and the local community. These are “Penghulu Mukim” and “Penghulu Tanpa Mukim”. Not only that, PAS has installed “Penghulu Seranta” for maintaining contact with wanderers outside the state. There are also 14 “Penghulu Seranta” in Kelantan – one for each Parliamentary district.

In a residential area with a certain number of people, a PAS activist will act as a "residential ambassador" and arrange regular meetings between the Kelantanese in the area and the village head of the Joint Committee. The village head of the joint committee will share the PAS agenda with the wanderers, and at the same time listen to the wanderers' grievances and prospects. In addition, the village head of the joint committee also keeps in touch with the "Persatuan Anak Perantauan Kelantan Malaysia” (Perakan) with chapters all over the country, mainly to convey the concern of PAS to them, and may even lobby them to vote for PAS in the election.

Source:https://en.wikipedia.org

The image of PAS is rigid and closed. But they are good at using technology. When the age of voters was lowered to 18 years old, it captured this group of more than one million in the country in time. In addition to promoting values among young people through social media such as TikTok, PAS has also established "Alternative Riding Clubs" in various congressional districts in the state, allowing young people to march in teams with light motorcycles, which is widely popular among first-time voters.

At local council level, all councillors are PAS members including the Nons.

In addition to establishing "interactive relationships between people", PAS also set up a missionary unit called Bahagian Dewan Halaqat in the Jabatan Hal Ehwal Agama Islam Kelantan (Jabatan Hal Ehwal Agama Islam Kelantan). This unit has a total of 540 staff to provide training to Imams, religious teachers and missionaries who can convey the political message of PAS to different groups. These messages are disseminated through Friday sermons, regular sermons (kuliah), and mosque activities, and the effect of their influence can be imagined.

In addition, as early as the 1980s, the PAS had the idea of operating preschool education and established the "Islamic Seedling Cultivation Center" (Pusat Asuhan Tunas Islam, referred to as PASTI). Today, 35 years later, there are 2,497 PASTI schools across the country with 9,539 faculty members. In 2022, there will be 125,065 students aged four to six. After the success of pre-school education, the PAS continued its efforts. In 2016, it established a religious primary school (Sekolah Rendah Integrasi Teras Islam Al-Furqan, referred to as SRITI) with Islam as the core. Four years later, it had 146 schools nationwide. As for religious secondary schools (Sekolah Menengah Integrasi Teras Islam, referred to as SMITI), there are seven schools that have been tested in 2020. In other words, PAS has gradually established its own education system - from pre-school kindergarten, primary school to secondary school, and successfully cultivated its own new generation.

Although no university has been established yet, the PAS has spread all over the public institutions of higher learning in Malaysia. The Persatuan Mahasiswa Islam (Persatuan Mahasiswa Islam) on college campuses is a peripheral organization of the PAS. Together, these associations are Gabungan Mahasiswa Islam Se-Malaysia (Gabungan Mahasiswa Islam Se-Malaysia), a political force that cannot be ignored.

Looking at the above-mentioned deployment and operation of the PAS - based in Kelantan, gradually expanding its influence to the northeast of the peninsula, and now looking south along the west coast, it can be seen that the "green tide" is not an accidental tsunami. It took decades to shape ideas.

What do we do? The Government has been mollycoddling anything to do with Islam or the Malays. “You don’t spook the Malays”. So do we surrender? Yes, that’s an option and have Hadi as PM and follow Iran, Afghanistan or Pakistan. More likely Iran! The ulamaks can then rule without an election!

Or, we counter the narrative on social media, seek to register their schools and curriculum and address community involvement with active “service ambassadors” for every condo and street. That takes organisation but that’s what PAS has done – are we too divided to organise?

Unless we counter the PAS narrative, I am afraid the “Green Wave” will gather further momentum. Unlike Hadi, if PAS had someone like the late Tok Guru (Nik Aziz Nik Mat), even the Nons will swing to PAS! Not enviable, but PM has a lot of work to do before the next GE.

Reference:

Explaining PAS’s dominance in Kelantan, Azmil Tayeb, Yusof Ishak Institute, Issue 17, 2022

China Reduces US Treasury Holdings

China reduced its holdings of US Treasury debt for the sixth straight month in January, which analysts said was mainly due to the US Federal Reserve's rate hikes and China's long-term security-driven diversification of its foreign exchange reserves.

The US Department of the Treasury released data on recently showing that China's holdings of US Treasury debt dropped to $859.4 billion in January, declining for the sixth straight month and falling below $1 trillion, where it has been for every month since last April.

China's holding of US government debt is at its lowest since May 2010, when it held $843.7 billion. However, China remains the second-largest non-US holder of US debt after Japan, which held $1.104 trillion as of the end of January.

Source: https://signal.supchina.com

Slashing investments in US Treasuries, which are an important component of China's $3 trillion-plus in foreign reserves, shows the flexibility of Chinese financial institutions' asset allocation and the diversification of investment portfolios, amid higher dollar interest rates and a volatile international environment.

The US has used its financial services as a weapon against Russia amid the Russia-Ukraine conflict to a scale and depth unseen before. Taking it as a lesson, countries around the world have recognized the importance of diversifying their dollar-denominated assets.

China has been promoting the use of the yuan in bilateral trade and investment over recent years. It has become the world's fifth-largest payment currency, third-largest currency in trade settlement and fifth-largest reserve currency.

China's foreign exchange reserves stood at more than $3.13 trillion at the end of February, down $51.3 billion, or 1.61 percent, from the end of January position, according to latest data released by the State Administration of Foreign Exchange.

Why would China do this? It is only logical if the U.S. remains belligerent and wanting a war on Taiwan. The U.S. needs China and Japan to subscribe to its Treasuries and help finance (U.S.’s) trade and services. But with deliberate de-coupling of economies, there is less need to be “financing” trade and services. Hence, the U.S. will have problems with trying to print more Treasuries. In will be an economic sabotage if China were to dump those Treasuries and U.S. fails to pay on due dates!

Reference:

Washington has itself to blame for China’s cut in U.S Treasury holdings: expert, Ma Jingjing, Global Times, 16 March 2023

Remember the Pencil Box Case?

This story in the Star (2 August 2023) between a lawyer and a shoplifter touched many people. Lawyer Ahmad Zaharil Muhaiyar helped a poor mother charged with shoplifting 25 years ago, little did he know that his gesture would one day bring two families of different religious backgrounds together. It was 1998 and Ahmad Zaharil was a lawyer in his 30s.

One day, he was alone in a courtroom after handling a case when a 50-something Malaysian-Indian woman, who worked as a cleaner, arrived in handcuffs accompanied by the police.

Source: https://csnews.com

Seeing her in distress, Ahmad Zahril felt compelled to approach her to ask how she ended up in court. She had stolen a pencil box from a supermarket. The Indian woman said the pencil box was meant as a gift for her 10-year-old son (her only child). She had promised to get her son a pencil box if he became the top student in class.

The boy, who was in Year Four, had passed his exams with flying colours, emerging first in his class. However, his poor mother had no money with her and so she stole the RM18 pencil box from the supermarket and was caught.

The lawyer thought if she was jailed for the offence, who would take care of her son? So, he had to intervene. The magistrate agreed to postpone the case to a later time on that day for Ahmad Zaharil to visit the boy’s school in Sentul and verify the mother’s claim. After speaking to the headmaster, it turned out to be true that the boy was indeed the top student in his class.

Together with the boy’s teacher, Ahmad Zaharil quickly returned to the courtroom where he met the owner of the supermarket. He offered the supermarket proprietor double the price of the pencil box and pleaded with him to have mercy on the woman. However, he refused and wanted to proceed with the case.

When the woman’s case came up, Ahmad Zaharil mitigated it on her behalf. Based on the teacher’s testimony and upon weighing the case, he said the magistrate discharged the mother after binding her over for a year on a good behaviour bond.

Before she left, a hat was passed around which then collected a couple of hundred ringgit contributed by court staff, policemen and Ahmad Zaharil.

The case was always memorable to the lawyer throughout his three-decade career. In 2018, while going about his routine in court, he was approached by a man in his early 30s.

The man told Ahmad Zaharil: “Hello, sir. You may not know me, but I am the son of the cleaner you helped 20 years ago. Remember the pencil box case? My mother saw you in the news on TV over a case you had handled and told me who you are. I searched for you and am so glad to meet you. I am a practising lawyer now, sir,” said the younger man.

Ahmad Zaharil said his eyes welled up at once and that he was overcome with joy. Both he and the young lawyer hugged. “I almost fainted when he told me who he was. It was heart-warming and one of the happiest moments in my life. We proceeded to visit his mother, who is now 76 years old” said Ahmad Zaharil (as reported by Star).

In recounting the fated 1998 encounter with the mother, Ahmad Zaharil said: “I helped because she is a fellow Malaysian. Here in Malaysia, despite our diverse backgrounds, our differences are minute, but we have similarities. We can live in harmony as one big family.”

Isn’t that something? Not expecting anything in return, a lawyer stood-up for a poor Indian woman. Race or religion was not an issue – just “kita tolong kita”. To be honest, it touches my heart – every time I read it. That’s the Malaysia I want (and for the generations to follow). Praise God for such acts of kindness!

Reference:

A bond he didn’t expect, Charles Ramendran, The Star, 2 August 2023

Do Malaysians Earn Under RM2k Monthly?

Recent data from the Department of Statistics Malaysia (DOSM) on formal sector employees’ wages has revealed that a significant 35 percent of workers earn less than RM2,000 a month.

The data also showed that the median wage does not increase much as one gets older. For those below 20 years old earning a median wage of RM1,500 a month, the maximum is at RM3,500 between ages 45 and 49 as of March 2023. This means that not only do most Malaysians earn below RM2,000 a month, the salaries never go higher than around RM3,500 throughout their lifetime.

According to the data, the number of formal sector employees earning below RM2,000 a month was over 2.2 million as of March 2023, followed by those earning between RM2,000 RM2,999 at around 1.3 million people.

On the opposite end of the scale, there were about 29,800 employees earning between RM14,000 and RM14,999 a month while those earning RM15,000 and above a month totalled around 337,800 people.

Meanwhile, the statistics show that median wages for formal sector employees below the age of 20 had risen from RM1,200 in March 2022 to RM1,500 in March 2023. However, the highest median wage by age was in December 2022, where those aged between 45 and 49 had a median salary of RM3,782.

This number went down to RM3,500 by March 2023. For the same age group, the lowest median wage was in February 2022 at RM3,189.

Low wages and slow increases of income at the bottom-end impacts consumption. The progressive wage model proposed by the Economy Minister has to be seriously looked at if consumption is to drive the economy. We need both investment and consumption to push our GDP above 6% p.a. That’s the plan for us to be in the top 30 economies of the world.

Reference:

Most M’sians earn under RM2k monthly – DOSM, Malaysiakini, 4 August 2023

Ten Global Industries to Boom to 2028

There are ten global industries that are expected to boom in the next five years (as researched by Sarah Schmidt) and these are:

1. 5G Security

Fifth generation (5G) cellular offers improved network capacity but also creates unique threats for governments, enterprises, and industrial customers.

A growing need for robust security and privacy features will drive heightened demand in the 5G security market. This is expected to grow at a compound annual growth rate (CAGR) of 36.8% to reach $25.9 billion in 2030 (Mind Commerce report 5G Security Market Outlook and Forecasts 2022-2030).

Source: https://en.wikipedia.org

2. Virtual Reality Gaming

Recent technological advancements have also led to a rise in virtual reality gaming, a $20.6 billion market in 2021. The market is expected to grow at a CAGR of 29.8% between 2022 and 2027.  It will hit $100.23 billion by 2027 (Global Virtual Reality Gaming Market Report and Forecast 2022-2027 by Expert Market Research).

3. Virtualization Software

Market analysts have also noted a multifold increase in the adoption of virtualization technologies by businesses. Some of the biggest heavy hitters in technology include Amazon, Google, Microsoft, Oracle, and Huawei Technologies. This is projected to rise from $38.7 billion in 2020 to reach $189.4 billion by 2027. A CAGR of 25.4%, according to a study by Global Industry Analysts.

Virtualization software is in high demand in many countries around the world including the United States, China, Japan, Canada, Germany, Australia, India, and South Korea.

4. Digital Education

The rising adoption of digital technology has made its mark on education as well with the use of online learning and tools such as smartboards, tablets, laptops, and massive open online courses (MOOCs).

The digital education market was an estimated $12.6 billion in 2019 and is expected to increase to $136 billion by 2030 at a CAGR of 25.1%, according to Digital Education Market 2030 by Fatpos Global. Top players in this space include Coursera, LinkedIn, and Pluralsight.

5. Healthcare Predictive Analytics

Another area of rapid growth is predictive analytics in healthcare. Valued at $13.6 billion in 2022, the healthcare predictive analytics market is expected to increase at a CAGR of nearly 25% to reach $33 billion in 2026, according to Healthcare Predictive Analytics Global Market Report 2022 by The Business Research Company.

Predictive analytics in healthcare can help with critical functions such as identifying early indicators of patient deterioration, designing personalized medicines, and improving clinical trial outcomes.

6. Cannabis Edibles

According to a recent report by Global Industry Analysts, the global market for cannabis edibles was an estimated $5.7 billion in 2020 and is projected to reach $23.3 billion by 2027, growing at a CAGR of 22.3% during that period.

7. E-commerce Logistics

E-commerce logistics is poised to achieve steady growth in the future with an estimated market size of $243.4 billion in 2020, this is expected to rise at a CAGR of 18.9% to reach $819 billion by 2027 (according to the report eCommerce Logistics).

The pandemic helped to accelerate the growth of e-commerce logistics. Technologies such as artificial intelligence and big data are expected to play an increasingly important role in the future, and sustainability will be another key issue to watch in this industry.

8. Solar Energy Solutions

Increasing environmental awareness and technological advancements will help create new business opportunities in the global solar energy solutions market. The market is projected to rise from $30.06 billion in 2022 to reach $62.97 billion by 2027, growing at a CAGR of 15.94% (according to a recent report by Infogence Global Research).

Key drivers include adoption of green energy, the emergence of smart cities, high electricity tariffs, and regulatory compliance.

9. Vaccines

In 2020, the global vaccine market was valued at $35.9 billion, according to Vaccine Market Report 2022 by Health industry Distributors Association (HIDA). The market is expected to more than double to $83.5 billion by 2027.

10. Fintech-as-a-Service

The global fintech-as-a-service market size is expected to reach $681.6 billion by 2028, rising at a CAGR of 16.9% CAGR during the forecast period, according to a report by Knowledge Based Value (KBV) Research.

Fintech-as-a-service encompasses technologies such as API, artificial intelligence, robotic process automation (RPA), and blockchain.

Some of the sectors above although global in scope, should be examined for local players to participate. Malaysia needs to move from the labour intensive sectors to “brain-intensive” sectors for a more prosperous future.

Reference:

10 global industries that will boom in the next 5 years, Sarah Schmidt, https://blog.marketresearch.com, 10 January 2023

The Poorest African Countries and France: A Lesson on Inclusiveness?

Former French colonies in sub-Saharan Central and West Africa are among the poorest and least developed of African countries. They may be classic cases of how ‘economic dependency’ persists in the former colonies.

Their economies continue to be dominated by the mining of natural resources (oil and gas, iron, bauxite, tin, copper, gold, rare metals) and agricultural production (coffee, cocoa, tea, millet, sorghum, maize, cashew, dairy, horticulture and animal husbandry).

About 60% of the population of sub-Saharan Africa comprise smallholders whose farms are less than five hectares each. Medium-sized farms (five to 100 hectares) are the exception. Plantation agriculture is even rarer.

Source: https://upload.wikimedia.org

Unlike in East and Southeast Asia where we have “import-substitution industrialisation” from the 1960s or earlier, and “export-oriented industrialisation” (electronic components and electrical products, textile and garments) from the 1970s, Africa still imports most manufactured goods.

None of these countries produce their own Proton or Perodua, or their own computers like China and South Korea. At best, the African countries produce consumer non-durables like shoes, processed food and drinks, and clothes.

Any attempt to decolonise their economies and break away from France was threatened by the compulsory payment of so-called ‘colonial debt’. When Guinea under Sekou Toure decided not to pay the debt, France resorted to what could be considered the scorched-earth destruction of the immovable ‘assets’ they were leaving behind – administration buildings, schools, hospitals, medicine, cows. This was done to forewarn the other nations not to follow Sekou Toure’s example of defiance.

Another handicap was the requirement that the former 14 African colonies continue to be part of the CFA francs currency system. Under this arrangement, the local currency is tied to the French and guaranteed by the French treasury at a fixed rate. The French government also lays claim to these countries’ national reserves by requiring them to deposit 50% of CFA franc reserves into the French central bank, effectively giving France control over the country’s resources.

The former French colonies’ struggle towards building strong and independent countries have often been marred by assassination of their revolutionary and nationalist leaders. Among those killed include:

• Patrice Lumumba, the Prime Minister of Congo, who was ousted by the pro-West military and other rivals who had him killed by firing squad in January 1961.

• Sylvanus Olympio of Togo, assassinated in 1963 – as Prime Minister, he had rejected the French demand for 800m francs as compensation for leaving behind the French colonial administration.

• Dr Felix Moumie, regarded as “the Patrice Lumumba of the Cameroons”, apparently poisoned in Geneva by French secret agents.

• Ruben Um Nyobe, likened to Gandhi and to Nelson Mandela, slained by the French army in 1958.

• El Mehdi ben Barka, “Morocco’s Che Guevera”, who organised a tri-continental gathering of Afro-Asian and Latin American socialists, kidnapped in Paris in 1963 and tortured to death subsequently.

Most of these leaders were pan-Africanists and socialist in persuasion. 

During the Cold War, African leaders of such orientation were identified as unfriendly to Western interests and conveniently got rid of. About 400,000 African nationalists have been deported, tortured or executed.

Two major books by the great anti-colonial theorist Franz Fanon – The Wretched of the Earth, and Black Skins, White Masks – describe how the colonialists educated and influenced the Africans not only to look down on themselves but also to hate their fellow Africans, instead of uniting and working with one another. (This is why the revolutionary leaders who advocated pan-Africanism, as mentioned above, had to be killed).

Several decades ago, when the French and European economies were growing and in need of cheap labour, these migrants were recruited in large numbers, and rapidly too.

Now, the French (and other European) economies are no longer growing at a rapid pace, fewer jobs are available for the young people.

Perhaps it is time for the French to compensate its former colonies by helping them to develop their economies, build their civil societies and stabilise their politics.

And if one recalls Rostow’s theory of economic development, it is the infrastructure, both physical and social, that must first be developed before other sectors can take off.  That is assuming we believe diversity adds colour. And inclusiveness harnesses a nation’s potential, that was the USA.

For us to be an inclusive nation unlike France (or other European economies), we need to reset our mindset on mono-ethnicity, mono-religion and mono-language. Diversity adds colour. We should celebrate our diversity and harness it for our benefit!

Reference:

Why did the ethnic conflict in France break out – a Malaysian perspective, Francis Loh, Aliran, 26 July 2023

Did PN Make a Mistake?

Opposition leaders may have accused Anwar of being a dishonest person. Some may remember that he (Anwar) had first created an image of being a champion of multiracialism and then he created an impression that he would be able to sway the Malays who had voted for PN in GE 15 to his side. The opposition has internalised Anwar's narrative. So, has PN ended up dancing to Anwar’s tune? (This article is based largely on views shared by Nehru Sathiamoorthy in FMT on 8 August 2023)

PN's focus on the Malay electorate was not necessary. Post GE 15, PN already had the Malay vote in the bag. If PN did not focus too hard on the Malays, they could still have counted on the Malay vote.

Source: https://www.thestar.com.my

Anwar, however, had succeeded in making PN so insecure about its ability to hold the Malay vote, that PN increased its focus on the Malay electorate. This is to the point that it was literally scaring the Malays to stay with it.

As for the non-Malays, PN should not have so easily succumbed to the narrative that the non-Malays are solidly behind Anwar. They may not be!

If PN had not alienated the non-Malays by ramping up the racial and religious rhetoric, a sizeable number of non-Malays would have been supportive of PN. For example, if PN had promised the Indians that if they voted for PN, it will elect an Indian as the Chief Minister of Penang. PN could have swayed the Indians, not only in Penang, but in the entire country. If PN had just declared that if it came to power, it would elect a Chinese as deputy Menteri Besar of Selangor and Negeri Sembilan. That could have forced Anwar to match PN’s offer. Had PN forced Anwar to own up to its multiracial claims, PH’s image as a multiracial party and Anwar’s narrative about him being a champion of multiculturalism, may have crumbled.

Alas, PN decided to dance to Anwar’s tune, portray themselves as the victim, and attempt to win the sympathy vote of the Malays by making the non-Malays the boogeyman instead. That my friend was a strategic error.

The Malays, who have been winning in the political field for decades and generations, are not comfortable seeing themselves as the victims anymore. When PN created a narrative of the Malays as being victimised and oppressed by the non-Malays, not only do the Malays not see themselves as the victim, that PN has gone to extreme length in order to portray the non-Malays as the oppressors. That has only caused the Malays to feel a sense of shame and guilt.

Will PN lose all 6-state elections then? Not likely. It is probably status quo. But we will only know that on 12 August when voters decide to go to their polling stations. So, please vote wisely!

Reference:

PN’s fatal mistake in the 6-state elections, Nehru Sathiamoorthy, FMT, 8 August 2023

Has Poverty Rate Dropped?

According to the Department of Statistics Malaysia (“DOSM”), poverty rate was 6.2 percent of the population in 2022, down from 8.2 percent in 2022. This was according to the DOSM Household Income and Expenditure Survey 2022.

The national poverty line for 2022 was defined as a monthly income of RM2,589 and below, while "hardcore poverty" was defined as a monthly income of RM1,198. Other salient findings with policy implications from the survey were as follows: 

The poverty rate is highest in Sabah (19.7 percent), followed by Kelantan (13.2 percent) and Sarawak (10.8 percent). (Note that the poverty line for each state varies).

Source: Malaysia News

The income gap between the bumiputera and Chinese – a key policy consideration for successive governments – has widened from a 0.72:1 ratio in 2019 to now 0.71:1.

The Gini coefficient, which measures income inequality, has improved marginally to 0.404 from 0.407 in 2019. Median household disposable income is the lowest in Kelantan (RM3,156) followed by Perak (RM3,804) and Kedah (RM3,821).  The "top 20 percent" of households received 46.3 percent of all income, while "the bottom 20" received 16.1 percent.

Based on the DOSM's survey, the "middle 40 percent" band was defined as household income of between RM5,250 and RM11,819.

Both median and average monthly household incomes are RM6,228 and RM8,479 respectively. Both values appeared to have rebounded since 2020 and are now higher than 2019 levels.

The DOSM 2022 survey involved 8.4 million households and was conducted between Jan 2, 2022 and Dec 31, 2022.

Under the Madani Economy framework announced recently, distribution of income and inequality were not clearly mentioned. Reducing poverty must be a goal in itself. Growth and “trickle-down” growth especially will not help the poor. Specific programs/taxation has to be instituted to reduce poverty and inequalities in Sabah, Kelantan and Sarawak. We remain consistent with Gini coefficient of 0.4 over several decades now. Isn’t it time to be bold?

Reference:

DOSM: Poverty rate trends down, Malaysiakini, 28 July 2023

Malaysia’s Total Trade Fell by 16.3% in June 2023

Malaysia’s total trade fell by 16.3% to RM222.1 billion in June 2023, from RM265.4 billion a year earlier. The Department of Statistics Malaysia (DOSM) said exports and imports also posted decreases of 14.1% and 18.9%, respectively. However, Malaysia’s trade surplus increased to RM25.8 billion, year-on-year (y-o-y). This was the 38th consecutive month of trade surplus since May 2020.

In comparison to May 2023, exports and trade surplus grew by 3.7% and 64.4%, while imports and total trade contracted by 5.4% and 0.5%, respectively. In terms of the commodity group, 144 out of 257 groups showed decreases as compared to the same month of the previous year and led by refined petroleum products. As for imports, 174 out of 259 groups recorded negative growth.

Source: https://www.nst.com.my/

The reduction in exports was mainly contributed by the United States (RM3.2 billion), followed by the European Union (RM2.7 billion), Bangladesh (RM1.9 billion), Japan (RM1.8 billion), India (RM1.7 billion), Thailand (RM1.6 billion), China (RM1.5 billion), Taiwan (RM1.1 billion) and Hong Kong (RM1.0 billion).

The decrease in imports was mainly attributed from China (RM6.1 billion), Taiwan (RM2.7 billon), Republic of Korea (RM2.6 billion), the United States (RM2.5 billion), Singapore (RM2.4 billion), Indonesia (RM1.9 billion), Australia (RM1.6 billion), the European Union (RM1.6 billion) and India (RM1.1 billion).

The fall was driven by palm oil & palm oil-based agricultural products (RM5.3 billion); petroleum products (RM5.1 billion); liquefied natural gas (RM2.6 billion); crude petroleum (RM1.4 billion); palm oil-based manufactured products (RM1.4 billion) and chemical & chemical products (RM1.3 billion). The contraction in imports was recorded for electrical & electronic products (RM7.2 billion), petroleum products (RM7.1 billion), chemical & chemical products (RM2.2 billion), manufactures of metal (RM1.5 billion), transport equipment (RM1.4 billion), liquefied natural gas (RM1.1 billion); and iron & steel products (RM1.0 billion).

Total trade for the second quarter (2Q) of 2023 declined by 11.3% to RM643.2 billion, compared to 2Q2022. Exports dropped by 11.1% from RM392.3 billion in the preceding year to RM348.7 billion, and imports with a value of RM294.5 billion, eased by 11.5%. A trade surplus of RM54.1 billion was recorded for the period, having shrunk by 8.8%.

During the first six months of 2023 (1H2023), total trade, exports, imports and trade surplus registered a decrease. Total trade decreased by 4.6%, supported by the decline in exports (-4.5%), as well as imports (-4.7%). Consequently, trade surplus recorded a higher value of RM118.5 billion.

Trade is a good barometer of the vibrancy of an economy. We can see the impact of China and U.S. trade on our economy. It is how we re-position that matters. Many nations are impacted but those who remain agile will be able to withstand or remain resilient in the face of adversity.

Reference:

Malaysia’s total trade fell 16.3% y-0-y in June to RM222.1 bil, Surin Murugiah, TheEdgeMalaysia, 21 July 2023

Big Food Corporations’ Control of Food!

As you sit in the morning and have your daily coffee or tea and enjoy your breakfast, take a moment to think where that food came from. Odds are, it's not coming from your local farm. It comes from a handful of companies.

Three companies now account for more than 40 per cent of global coffee sales, eight companies control most of the supply of cocoa and chocolate, seven control 85 per cent of tea production, five account for 75 per cent of the world banana trade, and the largest six sugar traders account for about two-thirds of world trade, according to Fairtrade Foundation.

When a few companies have such a big piece of the pie, they will use the "buyer power" to dictate how the supply chain is run. They have the ability to marginalize smallholders, greatly limiting their ability to get decent contracts. 

Source: https://en.wikipedia.org

Cocoa growers now receive 3.5 to 6 per cent of the average retail value of a chocolate bar; in the 1980s they got 18 per cent.

So, where do the government agencies step in?  They don't! Basically, multinational food (and drink) companies use strategies similar to those employed by the tobacco industry to undermine public health policies. This is done by “building financial and institutional relations” with health professionals, non-governmental organizations and agencies, distorting research, and lobbying politicians to oppose health reforms.

For example, U.S. documents reveal that the Academy of Nutrition and Dietetics (“Academy”) has a record of quid pro quos with a range of food giants, owns stock in ultra-processed food companies and has received millions in contributions from producers of pop, candy, and processed foods linked to diabetes, heart disease, obesity and other health problems.

The findings are a part of a recently published peer-reviewed study that examined a trove of financial documents and internal communications obtained through a Freedom of Information Act (Foia) request.

The Academy says it as an independent voice and “trusted educational resource for consumers”. It lobbies Congress and represents and provides information to over 110,000 US dietitians who help people make decisions about which foods to eat.

Though the Academy has long received criticism for its ties to big food, the study for the first time revealed the depth of its financial ties. The Academy accepted at least $15m from corporate and organizational contributors from 2011-2017, and over $4.5m in additional funding went to the Academy’s foundation. Among the highest contributions came from companies like Nestlé, PepsiCo, Hershey, Kellogg’s, General Mills, Conagra, the National Dairy Council and the baby formula producer Abbott Nutrition.

This situation is now spiralling out of control, reaching a tipping point of "no-return". Too much power in the hands of too few companies increases the risk of exploitation in food supply chains.  Producers have no choice but to sell for low prices. Consumers face a bewildering array of products on shop shelves even though their purchases benefit only a small number of brands. Unless there is government intervention, millions of small farmers are condemned to poverty. Even more, food security is at risk if farmers were to abandon their farms – because of untenable conditions. Never mind the “corrupt” independent institutions!

References:

Big food corporations work with corrupt government agencies to eliminate “small time” competition and take over the industry, Mihai Andrei, ZME Science News, 15 February 2017

Revealed: group shaping US nutrition receives millions from big food industry, Tom Perkins, The Guardian, 9 December 2022

Malaysia’s State Elections Scenarios

Based on the results of GE15, the expectation among political observers in Malaysia is that PN is likely to retain Kedah, Kelantan, and Terengganu while PH, together with UMNO, will retain Penang, Selangor and Negeri Sembilan. (This view is also held by YB Ong Kian Ming and the following are excerpts from his article published on 18 July 2023 in Fulcrum).

The rationale behind this expectation is from the electoral outcomes for GE15 in these six states (Table 1 below).

Source: Election Commission

Similarly, PH was dominant in non-Malay majority Penang, winning 59.4% of votes and 10 out of 13 parliamentary seats.

PH and BN’s combined vote share of 69.3% and 76.3% in Selangor and Negeri Sembilan respectively with PH winning 17/22 parliament seats in Selangor and PH + BN winning 8/8 parliament seats in Negeri Sembilan should also result in both states being won by PH+ BN in the upcoming state elections.

Table 2: Three Scenarios of Vote “Pooling” or “Transferability” between PH and BN

Table 2 above has three scenarios (as suggested by Ong Kian Ming) to project the state election results. Scenario 1 represents a “low” outcome for PH and BN with a low transfer rate of 30% from BN to PH and a relatively low transfer rate of 80% from PH to BN. Scenario 2 represents a “neutral” outcome with a transfer rate of 50% from BN to PH and a 90% transfer rate from PH to BN. Scenario 3 represents a “high” outcome for PH and BN with a 70% transfer rate from BN to PH and a 100% transfer rate from PH to BN. The vote transfer from PH to BN is used in all the state seats won by BN or where BN came second place to PN. The vote transfer from BN to PH is used in all the state seats won by PH or where PH came second place to PN.

A reasonable assumption is that PH voters are much more likely to “transfer” their vote from PH to BN in seats where PH makes way for the BN candidate to face a PN candidate.

How will the projected results in each of the states change under these three Scenarios? The results are summarized in Table 3 below.

Table 3: Projection of state election results under Scenario 1, Scenario 2 and Scenario 3 (using GE15 results as the baseline)

Numbers in parentheses (X) indicate the seats which are projected to be won by the respective coalitions with less than 55% of the popular vote, which is the threshold used to define marginal seats in a contest featuring two parties.

Unless there are big swings in favour of either PH-BN or PN among Malay voters (perhaps more likely) or non-Malay voters (much less likely), the anticipated outcome of three states remaining in the PN column (Kedah, Kelantan and Terengganu) and three in the PH-BN column (Penang, Selangor and Negeri Sembilan) will be the most likely. The upside for PH-BN is higher because of the potential of higher vote transferability from PH to BN in Penang, Selangor, and Negeri Sembilan and from BN to PH in the same states (but with a lower probability).

The six state polls will decide, among others, whether the voters believe in the falsehoods and fake news of PN leaders or whether the voters in the six states will vote for the future of Malaysia.

References:

Malaysia’s 2023 state elections: Projections and scenarios, Ong Kian Ming, Fulcrum, 

18 July 2023

Three possible scenarios of outcome of the six state polls in August, Tan Sri Lim Kit Siang, Focus Malaysia, 24 June 2023

India’s Rice Export Ban and Its Impact!

India’s Food and Consumer Affairs Ministry has taken the move to ban rice exports to “ensure adequate availability” in the country and “allay the rise in prices in the domestic market.” Rice prices rose 11.5% over 2022 and 3% over June 2023 in India.

India is the world’s largest exporter of rice, accounting for 40% of the world’s rice shipments and the country exported a record 22.2 million tons in 2022. Around half of India’s rice exports from 2022—10.3 million—were made up of non-basmati white rice.

The most severe impact of this ban is likely to be felt by India’s neighbours Bangladesh and Nepal, along with several African nations including Benin, Angola, Cameroon, Djibouti, Guinea, Ivory Coast, Kenya—who are the major buyers of non-basmati rice.

Fears about the impact of El Nino on rice crops have also driven up global prices for the grain to a two-year high, according to analytics firm Gro Intelligence.

Source: https://en.wikipedia.org

According to the Food and Agriculture Organization’s All Rice Price Index—which tracks global rice prices - it has risen 13.9% in the past 12 months.

India’s export ban comes days after Russia terminated a key deal that allowed the safe passage of Ukrainian food grains through the Black Sea. The move is expected to have a detrimental impact on global food security, as Ukraine is a key global supplier of wheat, corn and sunflower oil. Russia has blamed the West for its decision. Sanctions have impeded its ability to export its own grain and fertilizer supplies—which Moscow says are also important for global food supply. Wheat prices jumped after Russia withdrew from the Black Sea grain deal. The agreement had sought to prevent a global food crisis by allowing Ukraine to continue to export.

India’s Food Ministry said it had imposed an export duty of 20% on non-basmati white rice in September 2022 to lower prices and improve availability domestically. However, the effort to disincentivize exports did not pan out, as the volume of exports for this variety of rice was 25% in the seven-month period after the implementation of the duty.

Rice inflation has already accelerated from an average 6% year-on-year last year to nearly 12% in June 2023. Rough rice futures rose 1% higher to stand at $15.8 per hundredweight (ctw) following India's announcement. Prices could even surpass second-quarter highs when rough rice hit $18-levels per cwt.

India is now wrestling with high vegetable, fruit and grain prices. Prices of tomatoes in India have surged more than 300% in recent weeks due to adverse weather. A Reuters poll has predicted the country's inflation is likely to hit 4.58% year-on-year on soaring food prices.

Malaysia needs to step-up its food security. Traditionally, we import 60% of our food needs, about RM70-75b annually. The bulk of our rice imports are from Vietnam, Thailand, Pakistan, India and Myanmar. Average imported volume of rice is 750,000 metric tonnes according to BERNAS.

Land for oil palm cultivation is 6 million hectares while rubber is 1 million hectares. Rice and other vegetable crops have another 1 million hectares. New strategies are required to reduce our food import bill when we have land and other resources for food production.

References:

India’s rice export ban could drive global food prices even higher – here’s what you need to know, Siladitya Ray, Forbes

India’s rice export ban could send decade-high prices spiking even further, Lee Ying Shan, CNBC, 20 July 2023

Are There Any Benefits to Multivitamins?

 Half of all American adults—including 70 percent of those age 65 and older—take a multivitamin. John Hopkins researchers reviewed evidence about supplements, including three very recent studies:

• An analysis of research involving 450,000 people, which found that multivitamins did not reduce risk for heart disease or cancer.

• A study that tracked the mental functioning and multivitamin use of 5,947 men for 12 years found that multivitamins did not reduce risk for mental declines such as memory loss or slowed-down thinking.

• A study of 1,708 heart attack survivors who took a high-dose multivitamin or placebo for up to 55 months. Rates of later heart attacks, heart surgeries and deaths were similar in the two groups.

Source: https://en.wikipedia.org

Is a daily vitamin necessary? The researchers concluded that multivitamins don’t reduce the risk for heart disease, cancer, cognitive decline (such as memory loss and slowed-down thinking) or an early death. They also noted that in prior studies, vitamin E and beta-carotene supplements appear to be harmful, especially at high doses.

Without evidence to support the efficacy of supplements, many nutrition and public health experts say it’s best to focus on getting nutrients from your diet instead.

The exception is supplemental folic acid for women of child-bearing potential and vitamin D. The Center for Disease Control and Prevention recommends that all women of reproductive age get 400 micrograms of folic acid daily. The amount of iron in a multivitamin may also be beneficial for women of child-bearing potential.

Vitamin D is another nutrient that can be hard to fulfill through diet entirely. Your body generates vitamin D when your skin is exposed to the sun, but some people may struggle to absorb enough of the vitamin through sun exposure and foods like fatty fish and beef liver.

However, excess Vitamin D can cause health issues, such as kidney stones, confusion, and vomiting.

So, who gains? Big Pharma. The local pharmacy and pharmacists will tell you that supplements will not do any harm. How can chemicals (in excess) not harm your organs? Live on vegetables and fruits, and see your body glow! Try it for 10 days! Don’t believe? Please read Daniel. 1:12.

References:

Is there really any benefit to multivitamins? John Hopkins Medicine

Are vitamins and supplements a waste of money? Stephanie Brown, www.verywellhealth.com, 28 Jun 2022

The Madani Economy: A Potential Solution?

The Prime Minister has laid out his economic vision with the launch of "Ekonomi Madani" and the salient points expressed were as follows:

1. To be amongst the top 30 biggest economies in the world, in terms of nominal gross domestic product (Malaysia currently ranks 35).

2. In the top 12 in IMD World Competitive Index. The current rank is 27.

3. Have income from labour at 45 percent of total income. The present 12th Malaysia Plan goal is 40 percent by 2025.

4. A 60 percent female participation in the workforce, up from 55.1 percent in 2021.

5. Top 25 in the UN Human Development Index. Current rank is 62.

6. Top 25 in the TI Corruption Perception Index. Current rank is 61.

7. Keeping the fiscal deficit within three percent of GDP. The deficit for 2023 is projected to be five percent.

Source: Malaysiakini

A key component of Madani Economy is upgrading Malaysia's industrial sector, which now stands at 25 percent of GDP, to turn it into the country's main engine for growth.

Among the strategies are diplomacy, reviewing incentives and improving infrastructure.

As a start, RM100 million will be allocated to improve infrastructure in industrial zones, especially for facilities which have a "green" concept. Providing a conducive start-up ecosystem is also a key priority.

More details are expected when the government launches the National Industrial Master Plan 2030 in August.

I like many of the goals, but the PM’s economic vision has not “fleshed-out” how he is going to get there! In addition, he has not set or said anything on inequality. Will we reduce our Gini-coefficient to 0.35 (from 0.4) and then introduce the GST? And how do we improve inequality – taxes on the T20? Transfers to the B40?

Honestly, a disciple of economics may say there are only two real objectives (for a nation):

(i) to set a growth rate of say, 6-8% to be the top 30 economies of the world; and

(ii) to distribute income/output in a fair manner, so that happiness is achieved.

With (i) you will address all the issues faced with less constraints and bottlenecks. And in (ii), through taxation and distribution you may display a compassionate, caring nation. Isn’t that what we all want?

Reference:

Madani Economy: The salient points, Malaysiakini, 27 July 2023