TR EMERITUS

The Malaysian Insider, 9 February 2010 The Federal Court today agreed with the Court of Appeal and ruled that Barisan Nasional's Datuk Seri Zambry Abd Kadir is the lawful Mentri Besar of Perak. This snuffs out the last hope of his toppled political rival and predecessor Datuk Seri Nizar Jamaluddin to be reinstated to the position. The five-man panel of judges comprised Court of Appeal president Tan Sri Alauddin Mohd Sheriff, Chief Judge of Malaya Tan Sri Arifin Zakaria and Justices Datuk Zulkefli Ahmad Makinuddin, Datuk Mohd Ghazali Mohd Yusoff, and Datuk Abdull Hamid Embong. The judgement was read out in court by Tan Sri Arifin Zakaria. “There is no requirement in the State Constitution which requires a vote of no confidence to be taken in the State Assembly. In the present case, there is no doubt that Zambry has the support of 31 of the 59 members of the state assembly,” said Tan Sri Arifin Zakaria. Attorney-General Tan Sri Abdul Gani Patail later told reporters, "It's a very clear judgment with very, very sound reasonings. There's no doubt about it. What has been done was to reaffirm the court's decision," referring to the Court of Appeal that "Datuk Zambry is the rightful Mentri Besar." "What the judges said is that anyone who has the majority can be appointed Mentri Besar but must prove it," added Abdul Gani, who was present when the judgement was read out. Nizar, 53, had challenged Zambry's appointment and won at the High Court, which noted that there was a loophole in the Perak Constitution to allow for another to be sworn in as mentri besar (MB) when the incumbent had not resigned. In his decision on May 9 last year, High Court judge Abdul Aziz Rahim ruled that the Sultan was not constitutionally empowered to sack the MB, and that Nizar had always been the lawful head of the state government. The judge added that the only way for the MB to be dismissed when he refused to resign was through a vote of no-confidence by his peers inside the state legislative assembly. But the decision was overturned by the Court of Appeal later that month. The appeals court said the High Court judge's reading of the law was wrong and the latter had confused the issue of how the MB had lost the majority confidence with whether the ruler had the power to dismiss the head of government. Nizar who is the PAS assemblyman for Pasir Panjang was chosen to head the state executive council (exco) after his Islamist party won the groundbreaking March 2008 general elections and formed an alliance with two other federal opposition groups, the secular DAP and popular pro-reform party PKR. Read rest of the article on The Malaysian Insider  Read More →

By Jingle Yang Introduction The Economic Strategies Committee (ESC) is the brainchild of Prime Minister Lee Hsien Loong and his cabinet, aimed predominantly at developing the island city's economic capabilities, achieving continued economic success and enhancing its international presence. The ESC is chaired by Singapore's finance minister, Mr Tharman Shanmugaratnam, and houses 11 members from the public sector and labour movements as well as 14 members in the private sector. The ESC and its diversed representation of members gives voice to a wide array of private enterprises and provides a platform to facilitate discourse for a multifaceted group of professionals from the public and private sectors. On the 1st of February 2010, the ESC announced its very first key recommendations through a press conference and they are broadly classified into three categories: 1. Boost skills in every job This recommendation focuses on the importance of improving the general efficiency and productivity of Singapore's workforce, thereby increasing general wage and reducing reliance on foreign labour. What is probably worth mentioning is the proposal for the establishment of a high level national council that will serve to facilitate works of various government agencies and effectively bridging the gap between the private and public sectors. This measure, if in effect, should produce a more cohesive, less bottle-necked collaboration between them, consequently increasing general productivity. The recommendation also urges companies to further upskill all employees, a measure that will not only increase efficiency in production but also position Singapore as an attractive choice to foreign businesses, for both high quality labour and management. Since foreign imported labour has now increased to a rather substantial level in our workforce this recommendation's proposal of having companies become less reliant on them is the last most tangible points to me. The import of such labour originally started when lesser Singaporeans were willing to work in certain industries, like construction and nursing, but the intake of such workers have indeed snowballed to a level and expanded to such an extent that it has become detrimental to the local, mostly unskilled workforce. Prime victims are probably the older generation of cleaners at hawker centres and the younger generation of workers in the F&B sector. More often than not the former group relies on such jobs in foodcourts and hawker centres as a form of sustenance but are now found having to compete with younger, stronger and more efficient foreign workers for their jobs. Having said that, however, as the recommendation suggests, we should also implement means to retain experienced and skilled foreign workers even in our attempt to reduce reliance on them, as some do serve as a good complement to our workforce. Therefore the key to achieving a equilibrium is to maintain a balance between importing a healthy number of high quality, foreign labour and still provide sufficient jobs for the less represented yet more vulnerable local workforce. 2. Deepen Corporate Capabilities to Seize Opportunities in Asia This recommendation provides very sound suggestions like raising the total expenditure on R&D across various industries, entrenching ourselves deeper into the Asia markets and promoting cohesion between large companies and SMEs. The increment in expenditure on R&D should naturally increase the quality of both our physical and intellectual exports and placing us in the world map of product superiority and high level of quality control. If we do increase apportionment of our R&D expenditure to 3.5%, as suggested in the recommendation, we will be on par with the likes of USA, Japan and Europe, the top contenders for for such expenditure internationally. The industries that stand to benefit from such a vast allowance will hopefully gain a stronghold on the global markets. With regards to the development of cross borders financing capabilities I reckon we could imitate the likes of China and Japan, where banks were set up to tailor primarily to lending facilities offered to SMEs and foreign MNCs. The China Construction Bank and the Industrial Bank of Japan, respectively, provide long term loans to corporations by selling longer tenured debentures. These banks serve to facilitate commercial lending to companies that need heavy financing in their business expansion both locally and internationally, allowing for these companies to establish a substantial presence in the global market. However, the recommendation's suggestion of having the government provide insurance and guarantees for these companies to increase commercial lending could potentially be open to abuses, if not defined properly. Companies backed by such assurance from the government could take the opportunity to expand across borders, with borrowed cash, without careful considerations and managements. This will, inevitably, affect the image of local brands internationally and will prove more detrimental than the limitations set on their expansion presently. 3. Make Singapore a Distinctive Global City and Endearing Home It has been the government's long standing concern to create a global city that will both entice foreigners to think of Singapore as home and to make overseas-based Singaporeans to continue to regard the lion city as theirs. The recommendation is right to suggest we hold more 'pinnacle global events' to put the country under international radar to showcase our world class service excellence and capabilities. The importance of tertiary education will allow the country to participate in the exchange of intellectual workforce internationally, where locally trained graduates will have the opportunity to work overseas and learning the ropes of the working cultures elsewhere, while we entice capable expatriates to develop the local scene. However, as mentioned in recommendation (1) the government will have to thread a very thin line between importing a suitable number of foreign expatriates to positively influence the local markets yet not compromise the opportunities offered to local talents. Foreign expertise, albeit valuable, should be imported to boost the image of our industries, but not recklessly so. The second suggestion will benefit a large pool of foreign and local residents, including myself. The rejuvenation of matured HDB towns will provide a refreshing face-lift to currently outdated estates, opening up more HDB flat opportunities that are convenient, eco-friendly and attractive to the young adults. This continual effort suggested by the recommendation will also constantly improve the aesthetics of Singapore, allowing us to appear up to date and modern. It is also vital that we continue to develop the port at Tanjong Pagar to maintain our seaport dominance in the region. Further, it is consequential that we continue to develop areas like Orchard Road, Marina Boulevard and Sentosa or even find alternate shopping districts by roping in more international brandnames to enhance our image of a vibrant and dynamic nation city. Conclusion: These recommendations serve to reinforce the founding pillars of our country's economic success and aim to establish a deeper rootedness of our economic prowess so as to sustain continued growth and achievement. They also aim to ensure that our country will not be complacent with outdated methodologies but constantly strive to achieve a dynamic and buoyant economic status that will draw on both local and foreign expertise for a sustainable and enviable growth. As our country moves along in time the ESC's recommendations also hope to nurture a citizenry that is not only resilient to global changes but is well equipped to prosper amidst an unremitting global rat race. About the Author: Jingle Yang graduated with a Bachelor's degree in English Literature with The National University of Singapore. She has worked for three years with an established bank from the United Kingdom and is currently pursuing a post graduate degree in Applied Economics.  Read More →

Written by Our Correspondent Singapore's sovereign wealth fund Government of Singapore Investment Corporation (GIC) may have suffered a paper loss of more than SGD $10 billion dollars in its investment in Swiss bank UBS as of now. In December 2007, GIC agreed to invest 11 billion francs in mandatory convertible notes issued by UBS. The mandatory conversion feature of the notes held by GIC means that they must be exchanged for UBS shares by the time they mature on March 5, 2010 - two years after the notes were first issued. GIC's 11 billion franc investment means that it would receive some 228.83 million UBS shares when the notes are converted. [Source: Business Times, 21 August 2009] As of 8 February 2010 at 9.20pm, the price of UBS is 13.83 Swiss Francs per share. [Source: Yahoo Finance] This means that GIC's 228.83 million shares are worth only (13.83 x 228.83) = 3.16 billion Swiss Francs if the notes are converted now. At this moment in time, GIC has suffered a paper loss of (11 - 3.16) = 7.84 billion Swiss Francs or SGD$10.4 billion dollars. (taking 1 Swiss Franc = SGD$1.33) It is highly unlikely that UBS shares will recover to the price which GIC bought at in December 2007 by March 5 as they were purchased at the peak of the market (at A): To add salt to the injury, the Swiss government had sold off its entire 9.3 per cent stake in UBS for a tidy profit in August 2009, less than a year after it poured six billion Swiss francs into it, leaving GIC as the single largest stakeholder in UBS. Deputy Chairman of GIC Dr Tony Tan said then in a statement that GIC had “confidence in the long-term growth potential of UBS’s business, particularly in the global wealth management business”. The future of UBS looks bleak as it continues to be embroiled in a protracted court case with the U.S. government over the release of confidential information of its U.S. clients who are being suspected for tax evasion. Last week, Swiss Justice Minister warned that UBS may fail if no agreement is reached. GIC's Chairman Lee Kuan Yew appeared to be unfazed by the prospect of an impending UBS collapse. In an interview with Channel News Asia last year, he said: “When we invest, we are investing for 10, 15, 20 years. You may look as if you are making a big loss today, but you have not borrowed money to invest. You will ride the storm, the company recovers, your shares go up.” [Source: CNA, 6 Feb 2009] It now appears increasingly likely that UBS will not have any "long-term" future to speak of if it is shut out of business in the U.S., its largest market for private wealth management. As usual, the mainstream media did not report on the latest GIC's losses and neither did GIC give any updates on their UBS investments. GIC was set up in 1981 to manage the national reserves of Singapore which are accumulated from years of budget surpluses. In a way, the money belong to the people of Singaporeans who are still kept in the dark to this very day the real extent of GIC's massive losses in its disastrous foray into overseas banks.  Read More →