Pak Lah speaks his mind

Pak Lah speaks his mind

Datuk Seri Abdullah Ahmad Badawi spoke frankly on Monday night about criticisms against his administration, the role of his son-in-law Khairy Jamaluddin, and the business activities of his son Kamaluddin as well as addressed outbursts by his predecessor Tun Dr Mahathir Mohamad....(more)
(Source:The Star)

For the Prime Minister, eloquent silence is no longer an option.

That is why he went on national television yesterday to deny accusations of nepotism, to defend his image and to tell Malaysians what he believes in and why he governs the country in a more deliberate way.

For more than a year, Datuk Seri Abdullah Ahmad Badawi and members That is why he went on national television yesterday to deny accusations of nepotism, to defend his image and to tell Malaysians what he believes in and why he governs the country in a more deliberate way.

For more than a year, Datuk Seri Abdullah Ahmad Badawi and members

of his administration had been aware of the swirling rumours and allegations about the way they govern. But they chose not to respond....(more)
(Source:NST)

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Anwar Says Malaysian Premier Abdullah Should Answer Criticism, an article published in the Bloomberg.com on July 7.

Malaysian Prime Minister Abdullah Ahmad Badawi should respond to criticism from his predecessor Mahathir Mohamad amid a growing rift that threatens to split the ruling party, former deputy prime minister Anwar Ibrahim said.

``The general public would expect the prime minister to explain the more substantive criticism,'' Anwar, 58, said in an interview in Kuala Lumpur. ``I don't think he has been well advised when he chose to leave it to the ministers to explain. You have to have the courage to deal with these issues.''

Mahathir, 80, who retired in 2003 after 22 years in power, has accused Abdullah of breaking promises by scrapping projects approved during his rule. The squabble has distracted the government from the real challenges facing the country, and may damage the United Malays Nasional Organization, which has led the coalition that has governed Malaysia since 1957, said Anwar, an opposition leader who Mahathir fired in 1998.

``They see leaders all in disarray, battling each other,'' Anwar said on June 29. ``I don't want to rule out the possibility of further dissension in the party.''

Abdullah, 66, hasn't publicly responded to Mahathir's claims, though ministers and party officials have voiced their support for the premier and his policy decisions. The government plans to publish a booklet explaining why it scrapped projects including a bridge linking southern Johor state to Singapore.

Mahathir has said the government wants to ``demonize'' him, and force him out of UMNO, as the ruling party is known.

Public Confusion

The spat is ``going to get worse before it gets better,'' said Abdul Razak Baginda, executive director of the Malaysian Strategic Research Centre. Mahathir and Abdullah should ``keep it from the public gallery as people are confused'' over who they should support, he said, adding the dispute won't damage UMNO unless some ministers shift their allegiance to Mahathir.

It isn't the first time that Mahathir has criticized a chosen successor. Eight years ago, it was Anwar who was the target of his ire.

Anwar was fired in 1998 and imprisoned for almost six years on corruption and sodomy charges, which he said were the results of a conspiracy to destroy his political career. Malaysia's Federal Court, the highest court of appeal, quashed the sodomy conviction in 2004, though upheld the corruption charge, which means Anwar is barred from running for public office until 2008.

After Anwar was jailed, his wife Wan Azizah Ismail formed the People's Justice Party, which has about 150,000 members. Since his release from prison, Anwar has campaigned against corruption and called on the government to strengthen the rule of law and promote democracy and respect for human rights.

Anwar said he will help opposition parties campaign in the next general election, which has to be held before 2009. As for whether he plans to make a political comeback, ``you'll have to take new polls asking the public,'' he said.

Government Failures

Mahathir said last month the government's failures included scrapping construction of the bridge to Singapore, the abuse of permits given to car importers and the sale of a motorcycle unit by national carmaker Proton Holdings Bhd., for which the former premier acts as an adviser.

``Mahathir feels slighted'' because he wasn't consulted, said Baginda of the Malaysian Strategic Research Centre.

Abdullah's decision to let his ministers respond to the criticism may boost public support for the premier, said Bruce Gale, a Singapore-based independent political risk consultant who has covered Southeast Asia since 1988.

``It may actually increase his standing among many in the population who didn't like Mahathir and were hoping that Abdullah was going to bring a change,'' Gale said, adding the dispute won't cause ``a major split'' in the ruling party.

Media Blackout

Mahathir also said the government is trying to discredit him through the media, and that a media blackout by local newspapers has forced him to use news Web sites, including Malaysiakini to report his views.

``I don't think we should clamp down or deny him of his rights as a citizen, and more so as the former prime minister,'' Anwar said. ``If a former prime minister says that you're using the media to demonize me, there's no free media,'' he said. ``I think it warrants an explanation and attention from the public, and an explanation from the prime minister and the government.''

Still, the political squabble is distracting the government from more important issues, Anwar said.

``If you are distracted by this episode, by this contentious, rancorous debate, you're confining yourself to these few issues of projects that are close and dear to Mahathir's heart,'' Anwar said. ``What is dear to people's hearts is institutions of governance, accountability and economic growth, poverty alleviatio

Fortune Teller

PM Adullah Badawi talking about 9MP and SYED ZAINAL Abidin Tahir about national cars with FORTUNE magazine's Eric Ellis on July 10 2006 :

BIOGRAPHIES of Nelson Mandela, Richard Nixon, and Che Guevara sit alongside tomes from ex-Chrysler boss Lee Iacocca and celebrity chef Nigella Lawson on the bookshelves in Abdullah Badawi’s study in Putrajaya. Nearly three years after succeeding Mahathir Mohamed as Prime Minister of Malaysia, he sat down with FORTUNE correspondent Eric Ellis to talk about his new 15-year plan, the state of the economy, and the fate of Proton.

FORTUNE: You’ve just released the Ninth Malaysia Plan (9MP)? Is it all your work, your plan?

BADAWI: Yes, I can claim ownership of that. The plan is not for my ambition, not for my political advancement….it is the Prime Minister planning for the nation

FORTUNE: Its an ambitious program you have outlined……

BADAWI: Yes, it is ambitious, it is not just a plan for five years, it is a plan for 15 years.

FORTUNE: The focus of previous Mahathir plans has been on so-called mega-projects, huge public works. Yours has a more human tone to it..

BADAWI: Human capital. My approach to human capital is very Islamic but it is not in any way wrong or something people find distasteful. Human capital begins at the time the mother feels she has someone growing in her tummy, her baby is coming, to inculcate love in the little child, to do well to your siblings and don’t quarrel, and leave a little bit when you eat, be obedient, the little things, we must build a very strong moral foundation, on universal values.

FORTUNE: Are you backing away from economic development?

BADAWI: I will not say there will never be a mega-project, but the emphasis is (on human capital). We are moving up the value chain, eliminating social disparities. I have a development plan, to close the gap between rich and poor, the sectoral gap between agriculture and industry, our regional gap, all these gaps have to be closed.

FORTUNE: Malaysia had 22 years of Mahathirism, is the 9MP the arrival of Badawism?

BADAWI: I don’t know, I leave it to you.

FORTUNE: Where are the openings for foreign investment in the 9MP?

BADAWI: Information technology is a good area…..we encourage investment in agriculture, in bio-technology. In telecommunications, in services, we are still open for business, there are opportunities everywhere.

FORTUNE: Is globalization dying? Is protectionism on the rise in Asia?

BADAWI: Globalization is something (developing countries) are frightened of…..because they can’t take advantage of it, they have no capacity. Globalisation should not be seen as a threat but as an opportunity. For a developing country as small as we are, we are among the top 20 of world traders. We have to build capacity but this capacity-building cannot take place without adequate human capital development, education, training.

FORTUNE: To Proton, the National Car Project, which has been around for 20-odd years. It is struggling. How do you view developments there?

BADAWI: Proton has the potential to succeed but how do you make it succeed? You have to work hard, you have to be competitive. I told them that Proton has to compete. We can help to the extent that we can, but don’t be too dependent on help without improving yourself, you have got to improve. When we did away with the levy, Proton said fine, we can compete so I am placing some hope on the present management. Quality, design, everything has to be improved.

FORTUNE: Without the crutches (state support)?

BADAWI: Finally, it has to be without the crutches. But if to an extent we can help we must help, we can’t sacrifice it. It’s a very major industry, we are committed to this industry. Proton is our national pride. Yes, I mean that, national pride. I want allow it to sink but they’d better work hard. Find a partner if you want, its management’s decision to make. I cannot go into its micro-management, I don’t know how to run a car factory.

FORTUNE: In contrast to state-backed Proton, there is the example of the airline Air Asia, rising from the grassroots, without significant state help..

BADAWI: Yes, it has a very good entrepreneur. Smart small, move fast…you grow with the organisation, you learn to do certain things, you can make the adjustment if you do things wrong, you learn….

FORTUNE: You have been PM for two-and-a-half years. Do you like being PM?

BADAWI: I’m enjoying my job, its an opportunity to do something. I have managed to keep the country stable, I have managed to keep people together and not creating racial conflicts, this is very important, this is the basis of what we will do in the future, political stability, united, to build together. I have been able to come up with the Ninth Malaysia Plan, a vision that has been accepted by Parliament. Now I have a plan, the nation cannot say ‘where is Badawi? What is he talking about? He has no sense of direction, where is he heading? We give him big election victory, come on let’s walk the walk’…that’s what they used to say…..you remember that?

FORTUNE: Sure, I might have even written that.

BADAWI: We can always do better..

FORTUNE: Its natural people will compare you to Mahathir. His style was hectoring, your style is avuncular…

BADAWI: Its me! Its me! I have my own way, I did not cultivate a style just because I became Prime Minister, its me all the time, all the way…..put it this way, being tough, being persuasive, being abrasive, its only a matter of style. To me what is important is substance. The substance must be sound, and just. To me justice is very important. Its most important, a leader must have this justice

FORTUNE: Iraq and Iran. Malaysia is the chairman of the OIC…what’s your view on the course of events in Iraq?

BADAWI: It’s a sad thing,. Iraq is not going well. They cannot come together to agree. The administration that has been set up (in Baghdad) is viewed as purely the representatives of Washington. (Iraqis) don’t like the Americans. That is all. All this ‘liberating,’ this changing of regimes, and hoping that people come and embrace everyone, girls kissing soldiers…. that doesn’t happen. This is not like World War II when America went to Europe, its not France, this is Iraq.

FORTUNE: Is there a role for Malaysia, as OIC chair, as a moderate Islamic power, in brokering this, in helping sort it out?

BADAWI: We have been talking to a lot of people, trying to get them to sort out their differences. We have been meeting, a lot of meetings on Iraq. I have not yet announced what I want to do but a lot of discussion is going on. Sometimes we use a third party..

FORTUNE: Iran. Are we heading for another war?

BADAWI: No, I don’t think so. It will be worse than what is happening in Iraq. It is going to be disastrous. I don’t think the Europeans like it.

FORTUNE: You recently met (Iranian President) Ahmadinejad..

BADAWI: A tough character. He feels that why should people deny me the right to develop nuclear energy for peaceful purposes. There is between the two parties deep mistrust. I have been engaging the Iranian leaders, out of concern, from the spiritual leader to the Prime Minister, the former President, I’ve spoken to Blair, to Bush, to Chirac, to Putin, but they don’t trust the Iranians.

FORTUNE: Do you?

BADAWI: I can put my trust in them. I can see both sides. They have to go on talking….Bush (told me he) wants a diplomatic solution with Iran.

FORTUNE: To domestic politics. Are you secure? Dr Mahathir has been sniping from the sidelines.

BADAWI: Yes, I am secure, I know it, I know it….the cabinet is secure.

FORTUNE: Why is he doing this?

BADAWI: You’ll have to ask him.

FORTUNE: You talk to him?

BADAWI: I have talked to him, I have spoken with him but on this issue its not easy to talk.

FORTUNE: Are you still friends with him? Respect him?

BADAWI: Yes, yes, I respect him.

FORTUNE: How long do you intend being in the chair?

BADAWI: I want to achieve Vision 2020. (Mahathir) started it, it become a national vision, he has seen to the first half, I will see about the second half. Malaysia Boleh (Malaysia Can).

National cars

The Proton, Malaysia's national car, is losing market share. Can the company be weaned from its government subsidies?

BY ERIC ELLIS

SYED ZAINAL Abidin Tahir, the youthful new boss of Proton, Malaysia’s state-owned car company, is clear on his priorities.

“I’m a Malaysian first and a businessman second,” says the 44-year-old CEO, six months into the job. “I’m not a civil servant, but part of my job is a social and national obligation I have to adhere to.” Sentiments like those are a nod to Proton’s 21 years as the most visible symbol of Malaysia’s drive to developed-nation status. They wouldn’t convince the board at Ford, Fiat, or Toyota, and as noble as they sound, they won’t help the ailing Proton either. Although the carmaker is 42% owned by the government, Kuala Lumpur seems intent on withdrawing the subsidies that kick-started it back in 1985. It is also signing free-trade agreements that allow more imports of foreign cars. As a result, Proton’s market share—80% at its peak and 60% as recently as 2003, when its founder, Mahathir Mohamed, retired as Prime Minister— tumbled to 40% last year. Profits dropped to $7.6 million, down from $113 million a year earlier, and revenue slipped from $2.3 billion to $2.1 billion.

How did it get so bad? In a word, politics. Proton has become a football kicked between Mahathiristas, who believe the state must have a dominant role in advancing Malaysian industry, and those behind Abdullah Badawi, Mahathir’s successor, who favor a progressive withdrawal of the helping hand. Zainal, who came to Proton through a career in governmentlinked companies, is a man in the middle: “The government is saying, ‘We will give you a good framework so you don’t have to worry, but we want you to start operating like a business.’”

Mahathir is livid. The man Zainal calls the “father of Proton” became a consultant to the carmaker after leaving office. Badawi was his handpicked successor, and the 82- year-old former Prime Minister pledged not to interfere in his government. For Badawi’s first two years that’s how it was. But as Proton has sunk further, the two have fallen out over the carmaker’s direction. Mahathir recently told Malaysian journalists that “Proton is doomed” and that Badawi was selling out Malaysia’s sovereignty. For his part, Badawi is reluctant to talk about Mahathir’s sniping; the former Prime Minister remains an influential figure in Badawi’s ruling coalition. Badawi insists he won’t allow Proton to go under. “But they’d better work hard,” he told FORTUNE recently. “Everything has to be improved. It has to be without the crutches. We can help to the extent that we can, but I have told them, ‘Don’t be too dependent on help without improving yourself.’ ” That’s fine by Zainal, who says success will come from production efficiency. Take the sourcing of parts. “Some of the trucks load to just to 60%,” he says, “compared with 90% at Toyota. We’re paying for air.” Zainal admits that Proton’s three assembly lines have about 40% spare capacity.

Mahathirism has been a tough act for Badawi to follow, and its legacy shadows Badawi’s rule. Malaysians got used to the good times, but Badawi inherited an economy pumped up by state spending, which he’s now attempting to dismantle. “There seems to be new thinking in there,” says ING Bank’s chief economist for Asia, Tim Condon. “Under Mahathir, Proton was always a sticking point in free-trade agreements, but under Badawi that state lifeline is becoming more tenuous.” Mahathir believed in mega-projects—grandiose undertakings designed to fast-track Malaysia to economic development. Some of them were sound, but many were not. The North-South Freeway cut travel time by two-thirds, and in the south, near Singapore, the Pelapas seaport has given its neighbor a competitive fright in its quest to be Asia’s biggest port. Putrajaya, Mahathir’s administrative capital, is gathering urban mass, and Kuala Lumpur’s international airport is one of Asia’s best. But other projects were pompous monuments to an autocratic ruler. Under Mahathir the national carrier, Malaysian Airlines, had one of aviation’s most extensive schedules, because Mahathir liked to play the role of Third World champion. That worked diplomatically, but who really flew from Kuala Lumpur to Tunis on a regular basis? Now the airline is a money pit; it lost $88 million in the first quarter alone. Under Mahathir, Malaysia also built a $200 million Formula 1 track for one weekend’s motor racing a year. The Petronas Towers were the world’s tallest buildings for six years but have never been fully occupied. And Mahathir’s Multi-Media Super Corridor has generated just $2 billion in economic activity in a decade, missing the tech outsourcing boom, which mostly went to India.

But it is the Proton that has Malaysia in its deepest funk and that has given Badawi his most difficult challenge in de- Mahathirizing the economy. Mahathir founded Proton to carry Malaysians to a shiny new industrial future, from rice paddy to factory floor. He even had a stretch version made as his official car. Proton’s models bore patriotic Malay names: Saga (seed), Wira (hero), and Putra (prince). Its logo incorporated the Malaysian coat of arms. And a depiction of a Proton assembly line decorates the country’s 100-ringgit note. Mahathir made it a national duty to buy a Proton, and he helped Malaysians do so by providing for loans on easy terms. He signed up Japanese giant Mitsubishi as a partner, which built an assembly line in palm groves outside the capital. There were jobs for 12,000, and despite slumping sales and excess capacity, Zainal says there are no plans to shed workers.

Mitsubishi sold its 16% stake in 2004. Now Proton is in a desperate search for a foreign partner to provide technical support and much-needed equity. “We can’t do this alone,” says Zainal. “We must have a smart partnership.” There have been talks with Volkswagen and Peugeot, but it’s a tough sell. With only 500,000 new cars sold a year, Malaysia’s market is neither big enough nor cheap enough for foreign carmakers, which are focused on India and China. Ownership is also a sticking point. Proton’s major shareholder, Malaysia’s state investment house, Khazanah Holdings, won’t sell control of Proton to a foreign group. But few outsiders are willing to make the financial and management commitment needed without control.

Zainal acknowledges that Proton has major problems, but he says it’s not a lost cause. “We cannot be in a state of denial that we are producing quality cars, because the fact is we are not,” he says. “We need to be brave enough to accept that. We have to face reality. We must no longer behave like the national car. We cannot behave like we will be protected forever.”

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'Stop making comments'

Tun Dr Mahathir Mohamad should be happy that his Vision 2020 is being upheld and maintained by the Government, and should not get involved in other issues.

Johor Baru MP and Backbenchers Club chairman Datuk Shahrir Abdul Samad made these comments in response to the former prime minister’s concerns on the scrapping of the "scenic bridge" project.

He added that Dr Mahathir should stop commenting on the Government’s projects.

"He shouldn’t get involved in the projects and Government’s plans. Just be happy that Vision 2020 is retained," Shahrir said after officiating at the opening of the Kampung Tebrau Bakar Batu Fishermen Club’s new jetty here yesterday.

He said Singapore had taken two years to decide on the bridge. "It’s their loss for not agreeing. They should have built the bridge on goodwill.

"(Malaysia) would have considered selling them sand and opening our airspace to their military if they just concentrated on building the bridge," he said.

"Instead they imposed conditions ... they wanted our sand and airspace first before agreeing on the bridge.

"We will continue to beautify our Causeway and improvise our side of the bridge."

Shahrir wrote in his blog dated Tuesday, May 02, 2006