Be tough to Singapore!

This mentality was stamped in the Mahathir era and has been embedded deeply in the minds of those who have worked with him. Anwar is no exception. And his immediate response to Najib's agreement with Hsien Loong was that Najib was soft. Any Malaysian leader that signed or come to any agreement with Singapore must be soft. Then what is being tough? Being tough means never to sign any agreement with Singapore. If Singapore asks for 10% Malaysia must ask for 20%. If Singapore asks for 20% Malaysia must ask for 40%. The greatest example was the price of water to Singapore. It was a few cents and Mahathir asked for $3 for a starting price, I could not remember the exact figure. And when Singapore tried to negotiate, the price was raised to more than $10 and even higher everytime Singapore try to negotiate for a more reasonable price. This is what tough meant to Mahathir. Actually it is not tough. It is sheer stupidity. It is an approach that says he would not want to sign any agreement unless it is on his terms. In any business or bilateral agreement, how could any party think that an agreement can be signed on a one sided terms. To go forward, to negotiate any deals, the premise must be that both parties are comfortable with the deal and see benefits in them in an equitable manner. And that was exactly what happened when Najib and Hsien Loong met. And a deal was done. So, in the eyes of Anwar and Mahathir, and those who have been programmed to be tough, Najib must be soft. How to go forward like dat? PS. The best part is that after signing every deal that they had thoroughly studied in details before signing, they will come back and say they had a raw deal. That they were cheated.

Anwar dismisses Najib for being soft

The Pakatan Rakyat defacto leader said that the agreement which was announced yesterday raised concerns that Malaysia is seen to be too “submissive” in catering to Singapore’s demands. “There is a tendency that in the policy of Najib, like in the case of Barack Obama, he seems to be too submissive, agreeing, and there is a lot of concern. “Why is it we have now a Prime Minister that surrenders too easily?” asked Anwar. The above paragraph was posted in The Malaysian Insider in an article. 'Anwar flays ‘submissive’ Najib in Singapore deal' By Shazwan Mustafa Kamal May 25, 2010 The impression I get from Anwar's comment is that Malaysian leaders must act tough and play hard ball with Singapore. Otherwise they are seen to be soft, unfit to be Malaysian leaders. This is the underlying confrontational mindset that is prevailing since the Mahathir's time and is still existing today. Anwar's words are a revelation, that within closed doors, they must have been telling each other so. Be tough to Singapore leaders. With this kind of confrontational and aggressive mindset, it is tough to negotiate and come to any kind of agreement. No matter how good a deal, how fair a deal is, any agreement will be seen as a sell out, as being weak. So how to go ahead? Signing any agreement with Singapore is weakness. Signing any agreement with Singapore is signing a bad deal and to their disadvantage. When will they be able to sign an agreement that is fair or to their advantage? When can they sign an agreement and be seen as being tough? Strange mentality.

Concerns of a Harvard don

Cheong Suk Wai interviewed Harvard business administration professor Robert Pozen on his take of the world financial system. The professor was an advisor to George Bush and also chairman of MFS Investment Management, a mutual fund of US$200 billion in assets. The professor came under criticism for recommending that Fannie Mae and Freddy Mac ‘be given a good shake up’. When asked by Suk Wai on ‘What should we be focusing on to prevent, or at least anticipate, future financial fallouts’, these are his replies. 1. When there are very high levels of leverage in the system, that means everyone is running for the exit at the same time.(Spelt derivatives) 2. When you have foreign money supporting a real estate boom, that creates fragility because such money is always hotter than local money. (Be prepare for a quick cash out and a run on the property market) 3. Mismatches between assets and liabilities: If your financing is highly dependent on short term financing against long term assets, you’re vulnerable to liquidity crises. (Careful when taking big loans on properties and depending on salaries to pay) 4. Beware of financial innovations that grow extremely rapidly without proper supervision.(Spelt property bubbles, derivatives, CDOs, toxic products) 5. If you have fixed exchange rate, lots of pressure will build up to make it disintegrate in a short time as opposed to a flexible exchange rate, which goes up and down. The professor also commented on the need for truly independent and professional directors and that at most one should sit in 3 boards to be effective. The concerns of the professor are nothing new as the professionals, govt and academics are all privy to the indiscretions and the flaws existing in the current system. Our little system in paradise is also exposed to the same flaws and risks and it is just a matter of time before they explode in our faces. Do we have the political will and ethical responsibility to clean up the mess before it is too big to do anything about it? The only thing I disagree with the professor is point 5 on fixed exchange rate. The pressure building up is caused by the manipulation of speculative funds and govts like the US who are thrashing it to hide the weaknesses in their own system. A fixed exchange rate under the present condition is much safer and stable and would not be attacked by unscrupulous big funds. It also allows govts to manage the exchange rates purposefully and orderly.

Land Acquisition Act

Mahathir thought he could squeeze Singapore's balls by letting the Tanjong Pagar Railway Station to rot and be the eyesore in the heart of Singapore's business district. He forgot that the govt could throw the Land Acquisition Act on it and take it back with a little compensation like what it had done to acquire land for HDB flats and other infrastructure projects. If it was done, what Malaysia could get, going by the going rates for land acquisition will be peanuts. Of course nothing was mentioned on this option while we were still dependent on the water supply and water collection plants in Skudai. Now that this is no longer a trump card, and we could do without, using the Land Acquisition Act could be a matter of time. For good bilateral relations, it is good that we don't have to come to that and create more bitterness and animosities. Now we have a good ending to a fairy tale and they live happily ever after.

The dynamic duo of Ah Huay and Ah Lian

I can still recalled the infamous maiden speech of Ah Lian in Parliament about digging jamban and pangsai. If I am not mistaken it was to tell the opposition that this govt is not one that would wait for people queuing up to pangsai then start digging jambans. This is a highly strung govt of super talents, far sighted, proactive and always planning ahead, to anticipate problems before they appear. I would like Ah Lian to propose that Ah Huay make that speech again to remind everyone that this govt is still the same govt that would not dig jambans frantically only after people screaming to pangsai. And Ah Lian should also suggest that the speech be framed and hung on the walls of Parliament to remind everyone what this govt stands for. The combination of Ah Huay and Ah Lian can be a powerful act to make sure that nobody falls asleep in his job.