Jan 282010
 

A group of Australian and New Zealand investors, including retirees, claim they have lost millions in  savings invested in debentures issued by a Labuan-based firm.

They say they have lost a total principal sum of US$25-35 million along with millions more in unpaid interest.

The matter was highlighted by Klang MP Charles Santiago in Parliament during a debate on 15 December 2009 on the Labuan Offshore Financial Services Authority (Amendment) Bill 2009.

The investors have written more than a hundred letters to various Malaysian government agencies and regulatory bodies to complain about the matter. Among other things, they want to know why the company is still in operation; they are also calling for a full-scale investigation.

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Nov 052008
 

Now here’s another worrying development. The Penang government has implemented a “build first, approve building plans later” policy in a bid to draw more investors to the state, according to a news report.

The approval process for detailed building plans are there for good reasons. They are to ensure that various requirements are met: engineering, safety, environmental, fire precautions, a hearing for neighbouring residents’ objections, etc. The approval process allows local authorities to ask developers to amend their detailed plans if these requirements are not met.

If we allow construction of a factory building to commence before a detailed building plan can be approved, what happens when the plan doesn’t meet minimum standards but the building is already nearing completion? What do you do with the building then? Will the state government order its demolition? Or close one eye? This makes a mockery of the whole building plan approval process and renders it a farce. It also creates double standards – why should investors be exempted from the building plan approval process while the rest of us, mere mortals, have to comply with such regulations?

Since the Penang state government is so afraid of exposing the state to claims of compensation, then it should chew on these provisions from the Town and Country Planning Act 1976. Provisions under the Act state that the authorities will be exposing themselves to compensation claims for revoking permission or ordering a demolition if requirements are not met.

Section 25 (3) says an order revoking a planning permission or building plan shall state the period within which the person to whom the permission or approval was granted is required to demolish any building erected pursuant to the permission or approval and the maximum amount that the local planning authority is prepared to reimburse the person in respect of costs incurred by him in carrying out the demolition.

Section 25 (7) states that if planning permission or approval of a buidling plan is revoked, and if the person claims compensation from the local authority for expenses incurred, the planning authority shall offer compensation that is adequate.

Another section says the developer can appeal to the Appeals Board to assess the amount of reimbursement or compensation to be paid.

I have a better idea: why not go the distance and do away with all requirements. No need for planning permissions, building plan submissions, engineering department approval, PBA approval, bomba approval, EIAs, OCs, licences – oh, what a hassle! – then sit back and we will see a terrific influx of foreign investors into Penang. Only thing is we will probably succeed in drawing the worst kind of investors: those with little regard for regulatory requirements, safety, the environment – in short, those investors who are unable or unwilling to comply with the minimum standards and requirements set by developed nations. Hey, come to Penang, you don’t need to worry about all these things.

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Nov 032008
 

These days, those who go to the market often complain about the high prices of foodstuff including vegetables. It’s the stuff that many household heads talk about, especially the working class. How on earth to make ends meet…

We are now forced to rely on vegetables from Cameron Highlands, transported by lorries to various markets in towns and cities in the peninsula.

But it wasn’t always like this. In Penang for instance, until the 1980s, large quantities of vegetables were grown on the island. Vegetable farms in Thean Teik supplied close to eight tonnes of vegetables daily and lots of fruit to meet a huge portion of the needs of Penangites. There were other vegetable farms, notably in the Tanjong Tokong area.

But then, our city planners and the BN-led administration, in their wisdom, allowed developers and land trustees to kick out these farmers to make way for “development”. In the Thean Teik case, it led to a bitter confrontation, which the farmers lost.

Some development. Now, we have to get our vegetables from elsewhere. Factor in higher transport cost, higher demand, the rising cost of chemical pesticides and fertilisers and fewer urban vegetable farms, and it’s no wonder vegetable prices are rising.

The argument was that land in Penang was scarce and the farmers had to make way for development.

So looking at the issue from this perspective, I am bewildered that the Pakatan state government is rejoicing because Korean “investors” are planning a US$100 million golf course in Batu Kawan in Penang – a state which cannot find  land to grow enough vegetables to feed its population.

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Oct 312008
 

One of the larger issues that arises in the face of the global economic slowdown and recession is that the foreign investor-driven, export-oriented economic growth model is clearly not working, especially in times like this when global demand has shrunk. With global stagflation or recession staring at us, capacity is rising and the trickle of foreign investors is drying up.

We should be focusing more on building up a strong, resilient, sustainable domestic economy by providing basic services (housing, health care, food security, public transport, education) rather than relying on foreign investors and now, foreign retirees.

But getting federal funding for such essential services is a problem in the Pakatan-run states and I can sympathise with the Penang state government, which is searching high and low for investors to stave off the effects of job losses. All the same, hunting for foreign investors is at best a short-term solution that does not address the fundamental changes that have taken place in the global economy including the emergence of other low-cost countries such as Vietnam and China, which have much larger domestic markets. We should know by now that many foreign investors will not hesitate to pack up and head for the exit when the global economy goes slack, leaving their workers stranded.

Our region today is a vastly different place compared to the time in the 1970s when Lim Chong Eu successfully lured electronics investors from Japan and the United States to set up assembly plants in Penang.

So I was interested to read about Guan Eng leading a 52-member delegation on a five-day trade mission to South Korea. The NST carried this report yesterday:

2008/10/29

GEORGE TOWN: Chief Minister Lim Guan Eng led a 52-member business delegation on a five-day trade and investment promotion trip to Seoul, South Korea, yesterday. The

Lim’s press secretary, Cheong Yin Fan, said companies from the private sector would promote a cluster of properties to Korean buyers at the Penang pavilion.

She said the state government wanted to promote the Malaysia My Second Home programme to Koreans.

Lim will meet epresentatives of Korean companies and investors in various sectors, which include medical devices, electronics, healthcare, education, tour, travel and recreation.

Among the members of the delegation is Deputy Chief Minister I Mohammad Fairus Khairuddin.

Now, it will be interesting to see how a Pakatan investment mission, with its commitment to CAT, differs from a BN junket. In this regard, my old friend Andrew (lots of Andrews around!) in Korea raises some questions, which, if taken in the right spirit, will give the Penang state government ample opportunity to demonstrate what CAT means in practice:

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