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A response to Idris Jala (Part 1)

June 25, 2013

FMT LETTER: From Oliver Gomez

I read with faint amusement Idris Jala’s article which appearead in the June 24, 2013 edition of The Star newspaper. Idris Jala in his article discusses seven issues affecting Malaysia today.

Now in a few articles over the coming days, I will attempt to dissect and expose Idris Jala’s article for the rubbish that it is. I will start off now by tackling the first two issues that appear in his article.

Incidentally if you have not already read Idris Jala’s article, I strongly suggest that you do. It is a shining example of how misleading statistics can be and how politicians can literally get away with murder so long as they deny it strongly enough.

In his article, Idris Jala finds himself apparently cornered and forced to engage in a heated debate with an anonymous citizen appropriately named the ‘Angry Malaysian’.

The first issue: Transparency International CPI

The first statement that our poor Minister in the PM’s Department is forced to reply to is in regards to the problem of corruption in Malaysia. Idris Jala puts the Angry Malaysian in his place by informing him that Malaysia’s ranking on the Transparency International Corruption Perception Index improved from 60th in 2011 to 54th in 2012.

All of this sounds very impressive on the surface – that is of course until you realise that Rwanda ranked 50th on the same Index. In case anyone has forgotten, Rwanda was stuck in one of the worst civil wars ever in the 1990s. No disrespect towards Rwanda, but how is it that Malaysia ranks below Rwanda when we have had far more time to get our act together?

Another country that is ranked above us is the one Malaysians loves to hate i.e. Israel, which comes in at 38.

Here now, is the real doozie – in the very same study cited by Idris Jala, Transparency International further surveyed more than 3000 businessmen across 30 different countries.

Well guess what Mr Idris Jala? Malaysia ranked dead last, whereby an astonishing 50% of those surveyed said they had lost out on business opportunities in Malaysia due to a competitor paying a bribe. We comfortably beat the likes of India, Pakistan, Egypt, and Brazil. We even edged out nations like Mexico and Indonesia – two countries historically notorious for widespread bribery and corruption.

I wonder if Idris Jala was in fact fearful for his safety, which might best explain why he kept this particular result hidden from our Angry Malaysian.

The second issue: Global Financial Integrity on Illicit Capital Outflows

Clearly not satisfied with the ‘well rounded’ and ‘non-evasive’ answers provided by Idris Jala, the mysterious Angry Malaysian goes on to to cite the infamous 2012 illicit capital outflow study, as conducted by US-based Global Financial Integrity.

This study was highlighted to the Rakyat by Opposition leader Anwar Ibrahim as well as various Opposition MPs in the run up to the now concluded GE13. The report basically found that as of 2010, Malaysia had one of largest outflows of illicit monies in the world. We were only beat out by the likes of China and Mexico – truly ‘honourable’ company where corruption is concerned.

Yet again our embattled Idris Jala was forced to defend the honour of the BN led government, and had this to say on the matter:

“Bank Negara has refuted this claim. It has clarified that 80% of illicit capital outflow is trade mispricing or transfer pricing. This means private companies produce receipts or invoices which differ from the actual amount of money transacted, usually to pay lower taxes to the Government. This is not government corruption.”

Idris Jala had just described widespread tax fraud on the part of the private sector. Again it seems that Idris Jala delivered a lesson to the Angry Malaysian and that the government cannot be faulted for these issues. Two problems arise however:

  1. If there is a widespread problem with tax evasion in the private sector in Malaysia, why then has the Internal Revenue Board (a branch of government) been completely silent on the matter?
  2. Secondly and perhaps most damning, Idris Jala fails to acknowledge what is essentially the worst kept secret in Malaysia – the largest and most profitable Malaysian companies tend to be owned by or connected to various BN politicians.

Indeed, the Kuala Lumpur Stock Exchange is dominated by government linked firms and companies with close ties to the BN-led government. Suddenly, point (i) does not seem quite so mysterious does it?

Note Umno proxy Syed Mukthar al-Bukhary’s DRB-Hicom, MMC Corp Berhad, and Gamuda Berhad. There is also Felda Global Ventures Holdings Berhad as well as Tenaga Nasional Berhad, and Khazanah Nasional Berhad. These are all highly profitable companies with close ties to the BN government.

Dear readers, Petronas is entirely owned by the (BN) government.

Let us also not forget the recent exposé by Global Witness of Sarawak Chief Minister Taib Mahmud.

Global Witness gained prominence after it exposed the arrogance and corruption that permeated Taib Mahmud’s government and family. Taib’s own sisters were wrangled in to help steal Sarawak’s vast wealth from right under the noses of its native inhabitants. To this end, he employed the use of shell companies as proxies in addition to storing his vast amounts of illegal wealth in foreign bank accounts.

Now as well informed and resourceful Malaysians, you the readers are undoubtedly aware of various scandals that have followed the aforementioned companies and characters in recent years.

All this is of course to say nothing of the latest financial scandal within Bank Negara itself: reports surfaced some time last year that Bank Negara had engaged in large scale financial speculation in various foreign exchange markets during the 1980s and 1990s.

Remember the financial crisis of the mid to late 1990s? This was the crisis in which billionaire speculator George Soros was made public enemy number one by the then Mahathir administration. Well, Bank Negara had speculated huge amounts of the Great British Pound against George Soros, and had come up short – roughly RM 20 billion short according to the Penang Institute.

Simply put, the credibility of Bank Negara is very much up for debate.

I find it very hypocritical then that Idris Jala attempts to dismiss these issues as having nothing to do with the government. Does he really think the average Malaysian is that stupid?

One can never tell – Idris Jala was after all published in The Star newspaper.

Conclusion

In the short time that Idris Jala’s article was published in The Star newspaper, I have read countless opinions and comments praising the man for somehow being a stalwart of a leader as well as a captain of industry. Personally, I am at a loss as to how he continues to hold on to such a glowing reputation.

I am certain that Idris Jala is nice enough in person, but let us not kid ourselves – the man is well and truly a BN goon, past achievements notwithstanding. This means that he is just as likely as any other BN goon to pull the wool over the eyes of the Rakyat by means of half truths and whole lies.

I will in my next article attempt to make sense of the Angry Malaysian’s grouses as regards the New Economic Policy (NEP), and its effect(s) on the infamous brain – drain issue in Malaysia.

Does Idris Jala’s explanations finally stand up to scrutiny? Well no, it does not – but then again, this isn’t exactly news to the readers now is it?


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