Wednesday, September 29, 2010

1. How much is 4 trillion dollars? Star Business picking a report from foreign source says it is the value of Germany’s total output for one year.

2. I try to imagine the figure 4 trillion and wrote it down. It is 4,000,000,000,000. It is a lot, a great lot of money. But it is just the amount of dollars traded by the currency traders in just one day.

3. Yes, the currency traders are still at it, worldwide financial crisis notwithstanding.

4. Four trillion dollars worth of business in Germany in one year creates millions of jobs; spawns businesses big, medium and small; move millions of vehicles and trains, support a rich and highly developed Germany and the people of the country and much more.

5. But what does 4 trillion dollars in currency trade do? Apart from enriching a few players, nothing. No jobs are created, no businesses, big, medium or small spin off; no enhancement of international trade, no movements of goods or people, no sailing of ships or flights of aircraft, nothing.

6. 4 trillion a day and there are 365 days a year giving a total of 1,460 trillion or 1,460,000,000,000,000 in a year. So much money. But can we estimate how many of the earth’s 6.5 billion people benefit?

7. But currency trading can also do damage to millions and millions of people, destroy whole countries, bankrupt businesses and banks and cause recessions. We know because it happened to us in 1997-98. We know because currency trading is one of the causes of the current crisis.

8. What kind of system is this that permits and protects a few people at the expense of millions of helpless people, their countries, their businesses, their societies and their well-being. Is this what capitalism and free trade is all about?

9. I saw Mike Moore’s latest film, “Capitalism – A Love Story”, and was appalled by the crudeness of people playing with money.

10. People free from financial problems are persuaded by banks to mortgage their fully paid up homes so that they can have money to invest and make more money. The investments fail and there was no money to redeem the mortgaged home. The banks took posession of the homes and the previous owners were forced to move out. But they had no money left and could not even rent a house, Thus a house-owner is rendered homeless.

11. This did not happen to one person. It happened to millions, The banks now own millions of houses. But nobody has enough money to buy them, nor can they borrow money to buy. Simply put the banks cannot get back the money they had lent and the banks fail. That is part of the story of the subprime loan failure which triggered the current crisis.

12. It is now nearly three years since the current crisis began. Every now and again the experts will claim that the crisis has bottomed out. But then news came that the crisis is still on.

13. Now there is talk of a double-dip, of the recession going on to another recession. This is very likely simply because nothing is being done to stop the activities which led to the crisis. As we can see currency trading is still going on, if anything, on a larger scale. Much of the bailout money, billions of dollars worth, has produced nothing worthwhile. The bankers and their people have used a goodly sum of the bailout money for hefty bonuses, the hedge funds are still active and so is presumably the “leveraging” and many of the gambling that lead to the crisis are still in place.

14. The leaders and their financial advisers in the great capitalist countries have learnt nothing. They continue to support the gambling and the manipulation. They are still influenced by their uncontrolled greed.

15. The worldwide recession will not end until Wall Street ceases to control whatever Government the United States and the United Kingdom may have.

Friday, September 17, 2010

1. One reason advanced by the advocates of letting the Ringgit to be traded abroad is that it will encourage foreign direct investment.

2. There was a time when Malaysia practically pioneered encouragement for foreign direct investment. It was even before FDI became popular with many developing countries as a shortcut to economic growth. Malaysia wanted FDI for job-creating labour intensive industries because of the need to create employment opportunities for its workforce at that time. It was really not about growing the economy.

3. For Malaysia at that time, foregoing taxes and even local participation were not important. The Government did not rely on FDI to fill its treasury.

4. The policy of attracting FDI was so successful that it resolved the problem of unemployment until it created a problem of labour shortage. This led to an inflow of foreign workers and the expatriation of billions of Ringgit back to their countries. FDI no longer helped Malaysia’s growth.

5. But being used to this easy approach we keep on inviting FDI believing that it would still help with our economy. But let us look at what really happens when there is foreign direct investment.

6. Most people think that there would be an inflow of capital. But actually only about 10 per cent of the capital needed was brought in. The rest is borrowed from local banks, preferably foreign owned banks. It is therefore Malaysian money that is invested.

7. Apart from tax exemption Malaysia also subsidised the operations of foreign owned companies through subsidised electricity, fuel and domestic transportation. Of course the Malaysian workers contribute through their cheap labour.

8. There is another type of FDI which is even less beneficial. This take the form of investments in the stock market. Usually the objective is not to benefit from profits and dividends but from capital gains.

9. When foreign investors buy Malaysian shares, the prices are likely to appreciate. Foreign institutional investors, especially pension funds can easily push up share prices with their repeated purchases.

10. When the prices are high enough the investors would dump the shares and collect capital gains. The local investors would lose money as prices depreciated.

11. During the financial cirisis of 1997-98, foreign investors dumped their shares so as to quickly change the Ringgit into foreign (US) currency before further falls in the Ringgit would give them less foreign currency in exchange. This invariably caused a steep fall in the share prices and Stock Market Index with consequent losses by local investors.

12. The Malaysian Stock Exchange makes money from commissions or the sales and purchase of shares. Consequently they are happy with more selling and buying on the Exchange. They therefore welcome foreign investors in the market. In fact they believe that if short selling is allowed they will make even more money.But these kinds of market activities do not benefit the nation.

13. FDI is double-edged and caution is needed when deciding on encouraging it. Today FDI is not coming into Malaysia because countries such as China, Vietnam, even Thailand and Indonesia offer lower cost of labour. Besides the economic recession in America and Europe mean less capital is available.

14. But what about the Ringgit? How will it affect the FDI? We need to know whether there was a lowering of FDI due to fixing the Ringgit exchange rate in 1998. If there was, was it directly due to the exchange control or other factors like increase in the cost of labour and competition with the above-mentioned low cost countries?

15. Actually when the Ringgit was fixed at RM3.80 to 1 US Dollar, the cost of investing in Malaysia was lower in terms of foreign currency. Now that the Ringgit has appreciated to RM3.20, the cost has appreciated. If we allow free trading of Ringgit abroad, two things can happen.

16. If the Ringgit strengthens then the cost of investment in Malaysia would increase, This would not facilitate foreign investments.

17. On the other hand the currency traders may once again cause the Ringgit to depreciate. This may result in increased FDI. But remember how we went into recession when our ringgit was devalued by foreign currency traders? Do we want to have that crisis again?

18. The present financial crisis in the world is due to the abuse of regulations in the financial market. No positive steps have been taken so far to regulate it. Certainly currency trading remains unregulated and selective.

19. The latest report says that every day currency trading is valued at four trillion dollars, equal to the total output of Germany in one year.

20. Whereas Germany’s 4 trillion dollars yearly output creates millions of jobs, businesses big and small and much trade, the 4 trillion a day currency trade creates practically no jobs, businesses or trade. Of course the currency traders make tons of money. In the process we know that they can cause a repeat of the crisis faced by the world when they lose. Why should the world allow such greedy people to put the world at risk.

21. If we fully free our Ringgit the risk of being attacked by currency traders will once again be faced by us. Do we really want to have the financial crisis once again?

22. So I hope the Government will explain why it wants the Ringgit to be traded again. I hope it is not because we want to be good boys who will always do what we are told to do.

Tuesday, September 14, 2010

1. Izinkan saya jelaskan pandangan saya terhadap kegunaan dinar emas yang saya cadangkan.

2. Saya telah cadang dinar emas digunakan untuk dagangan antarabangsa sahaja. Saya tidak pernah cadang dinar emas diguna sebagai matawang mana-mana negara untuk kegunaan harian.

3. Walaupun harga emas lebih stabil daripada matawang, tetapi nilai emas juga bergerak. Semasa Perjanjian Brettonwoods satu auns emas bernilai $35 Dolar Amerika. Tetapi sekarang satu auns emas bernilai $1,300 Dolar Amerika. Ini bermakna nilai Dolar telah jatuh degan teruk. Namun untuk dagangan antarabangsa Dolar masih diguna.

4. Jika satu syiling emas diberi nilai 1 Ringgit hari ini umpamanya dan kemudian nilai emas meningkat maka sudah tentu pemilik syiling emas tidak akan gunanya untuk membeli-belah dengan bernilai satu Ringgit. Mereka akan guna wang kertas 1 Ringgit. Syiling emas akan disimpan.

5. Lama kelamaan semua dinar emas yang dikeluarkan oleh pihak berkuasa akan hilang dari pasaran. Walau banyak mana sekali pun pihak berkuasa mengeluar dinar emas akhirnya akan habis emas yang disimpan. Inilah yang berlaku pada Amerika Syarikat yang pada satu masa memiliki 80 peratus daripada simpanan (reserve) emas dunia.

6. Mekanisma yang lain akan diguna untuk dagangan antarabangsa dengan dinar emas. Simpanan matawang emas tidak perlu dalam bentuk syiling tetapi sebagai bata atau jongkong emas yang nilai-nilai akan mengikut harga emas dalam pasaran.

7. Bayaran untuk dagangan akan dibuat oleh bank pusat setelah dihitung nilai eksport dan nilai import antara dua negara. Jika import melebihi eksport maka negara berkenaan akan bayar dengan nota kredit bersamaan jumlah nilai emas sebanyak kelebihan nilai import tolak nilai eksport.

8. Jika pada bulan hadapan eksportnya ke negara berkenaan melebihi nilai import maka bayaran untuk kelebihan ini boleh dibuat dengan nota kredit bulan lepas.

9. Dengan cara ini tidak ada keperluan membayar dengan emas walaupun emas menentukan nilai barangan yang didagangkan. Hanya bayaran dibuat untuk lebih atau kurangnya eksport dengan import secara total dengan negara-negara berkenaan tiap bulan atau minggu. Jika nilai import adalah sama dengan eksport, bayaran tidak perlu dibuat. Ia menjadi dagangan secara barter (tukar barang).

10. Dengan menggunakan emas untuk menentukan nilai dagangan, Dolar Amerika yang jelas tidak stabil tidak perlu digunakan lagi. Permainan oleh penyangak matawang juga akan terhenti.

1. Mr Lee Kwan Yew, the Minister Mentor of Singapore is three years my senior. That means he and I practically grew up in the same period of time. That also means that I have been able to watch the progress of Mr Lee, and in fact to interact with him on various occasions.

2. His assertion in his interview with the New York Times that “Race relations (would be) better if Singapore (had) not (been) “turfed out” (of Malaysia) is worth studying. Is it true or is it fantasy?

3. Before Singapore joined the Peninsular, Sabah and Sarawak to form Malaysia, there was less racial politics in the Federation of Malaysia. In 1955 the Malays who made up 80 per cent of the citizens gave a large number of their constituencies to the few Chinese and Indian citizens and ensured they won with strong Malay support. As a result the Alliance won 51 of the 52 seats contested.

4. The Tunku then rewarded this willingness of the Chinese and Indian citizens to support the coalition concept by giving them one million unconditional citizenship. This reduced Malay majority to 60 per cent.

5. In the 1959 elections the Alliance of UMNO, MCA and MIC won easily though Kelantan was lost. PAS with only Malays as members was rejected. Racialism even when implied failed.

6. In 1963 Singapore became a part of Malaysia. Despite having promised that the PAP will not participate in Peninsular, Sabah and Sarawak politics, Kwan Yew reneged and the PAP tried to displace the MCA in the Alliance by appealing to Chinese sentiments in the Peninsular. Of course the slogan was “Malaysian Malaysia” which implied that the Chinese were not having equal rights with the Malays. If this appeal to Chinese sentiments against the Malays was not racial, I do not know what is racial.

7. But the Peninsular Chinese favoured working with the Malays in UMNO. They totally rejected PAP in 1964.

8. Following the Malaysian Malaysia campaign a few UMNO leaders tried to rouse Singapore Malay sentiments. There were demonstrations in Singapore where before there were none. Kwan Yew accused Jaafar Albar for instigating the Singapore Malays. Although I never went to Singapore, nor met the Malays there, I was labelled a Malay-ultra by Kwan Yew himself.

9. By 1965 racism had taken hold and the Tunku was forced to end Singapore’s membership of Malaysia. But the seed of Chinese racialism had been sown, so that even after the PAP left, the “Malaysian Malaysia” war cry was picked up by the DAP, an offspring of the PAP.

10. With the background of Singapore’s activities in Malaysia in the short three years of its membership, can we really believe that if it had not been “turfed out” race relations would be better in Malaysia?

11. But proof of what would have happened was shown by the politics leading up to the 1969 Election. The MCA began to criticise the Sino/Malay cooperation especially on so-called special rights and demanded for a Chinese University. UMNO then began to clamour for a greater share of the economy of the country. The UMNO/MCA conflict resulted in the Alliance faring very badly in the 1969 Elections.

12. DAP and Gerakan, a new party largely made up of MCA dissidents made gains. The Alliance were shocked and rattled.

13. Then the Gerakan and DAP held their victory parade near the Malay settlement of Kampung Baru, hurling racist insults at the Malays. The result was the 13th May race riots.

14. Till today the racist slogan “Malaysian Malaysia” is the war-cry of the DAP. Racism in Malaysia is clearly the result of Singapore’s membership of the country for just three years. Can we really believe that if Singapore had not been “turfed out” Malaysia would have no racial problem.

15. While Kwan Yew talks about his belief that all ethnic communities should free themselves from the shackles of racial segregation in order to promote fairness and equality among the races, he also said that “once we are by ourselves (out of Malaysia) the Chinese become the majority”.

16. Singapore’s population is made up of 75 per cent Chinese and they own 95 per cent of the economy. It is therefore not a truly multi-racial country but a Chinese country with minority racial groups who are additionally much poorer.

17. In Singapore dissent is not allowed, People who contest against the PAP would be hauled up in court for libel and if they win elections would not be allowed to take their places in Parliament. Whereas in Malaysia opposition parties invariably win seats in Parliament and even set up State Governments (today five out of the 13 States are ruled by the opposition parties) the PAP in Singapore has to appoint PAP members to represent the opposition.

18. Whether the PAP admits it or not, the party has always been led and dominated by ethnic Chinese and have won elections principally because of Chinese votes. The others are not even icing on the cake.

19. If Singapore is a part of Malaysia the PAP can certainly reproduce the Singapore kind of non-racial politics because together with the Malaysian Chinese, the PAP will ethnically dominate and control Malaysian politics. No dissent would be allowed and certainly no one would dare say anything about who really runs the country.

20. Amnesia is permissible but trying to claim that it is because Singapore had been “turfed out” for the present racist politics in Malaysia is simply not supported by facts of history.

21. Lee Kwan Yew and I saw the same things and know the reasons why.

Thursday, September 9, 2010

Saya dan isteri saya mengucapkan Selamat Hari Raya Aidilfitri, Maaf Zahir Batin, kepada semua rakyat Malaysia yang berugama Islam, khususnya kepada pembaca blog ini.

Saya harap semua rakyat Malaysia akan dapat merayakan hari kebesaran ini dengan penuh ketenangan dan kegembiraan, dan tradisi kunjung mengunjung ke rumah terbuka akan diteruskan dalam semangat perpaduan yang erat antara kaum.

Bagi mereka yang pulang ke kampung berhari raya, pandulah dengan cermat. Biarlah lambat sedikit asalkan kita sampai ke destinasi yang dituju untuk beraya dengan orang yang dikasihi.

Saya juga ambil kesempatan ini untuk menjemput kepada yang berkesempatan ke rumah terbuka saya pada hari Ahad, 12hb September 2010 di kediaman saya di 58, Jalan Kuda Emas the Mines, Seri Kembangan bermula dari jam 10.00pg – 1.00tgh dan 3.00ptg – 5.00ptg

Mahathir dan Hasmah

1 Syawal 1431 Hijrah

1. The Government has been urging Malaysian institutions and individuals to be innovative, to do research and invent. For this the Government has allocated over a billion Ringgit to help those doing research and inventing things which can contribute towards greater efficiency in the production of goods and facilitating all kinds of work.

2. I will not talk about how difficult it is to gain access to Government funds. That is a major problem for researchers, especially indiiduals and institutions in the private sector. But when the results are achieved, no one wants to use or apply them.

3. Malaysian business and people generally do not believe Malaysian products are any good at all. Often they would reject outright, simply because they are Malaysian inventions. Since theinventors are not business people and finding money to do the research had already been very difficult, they are not in a position to invest in their products in order to produce the quantities and the standards acceptable to the market. Producing something in the laboratory is not the same as producing on a commercial scale.

4. Sometimes products are rejected by Malaysians even when they are acclaimed in foreign exhibitions and journals. In fact even when foreigners accept these products, the Malaysian inventors cannot penetrate the local market, including Government institutions.

5. We need to have a change in our attitude to Malaysian inventions and products. It should begin with Government institutions. Malaysian medical researchers have produced stainless steel plates for bones. They have not been accepted by Government hospitals probably because they already have long contracts with foreign suppliers. They do not wish to break their relations even for a minor part of the supply. There may be other reasons.

6. The private sector behaves in the same way. They reject almost all the research results of Government research institutions. Private sector research also meet with the same rejection.

7. Obviously if the Government wants Malaysians to innovate, to do research and development, Government institutions should be directed to try out products, schemes or systems developed by Government and private individuals which have a reasonable chance to work. Following that the private sector must do the same.

8. There should also be rewards by the Government when a Government body or private company is prepared to try out inventions and systems researched and developed by Malaysians. The reward should be substantial when the trials prove successful. Tax holidays should be given.

9. As a public service I would like to set up a register of Malaysian inventors which have not been given opportunities to prove their products either by the Government or the private sector. I will try to contact relevant agencies or companies which may be interested in the inventions or systems.

10. For those wishing to register, please give;

a) Name and Address

b) Product

c) Stage of development

d) Funding and help required.

Please email all these details to

11. I cannot promise the results but I think the Government would be interested to know how people have responded to Government’s call to innovate, invent and use Malaysian products. Knowing this perhaps the Government would instruct relevant officers and departments to be more accomodating when asked for help and consideration.

Wednesday, September 8, 2010

1. The Sultan Abdul Hamid College in Alor Setar is the alma mater of many who have done well in life. Of course there are the two Prime Ministers, but there are also Ministers, business tycoons, professionals in every field and heads of many Government Departments at State and Federal levels.

2. All must remember the fun and games and the great days of schooling. And many must be nostalgic about those days of youth, uncomplicated by the need to struggle for a living. Of course there were exams to get through and that can be a bore – except when you happen to be a distinction kid.

3. I think it is payback time now. Not many schools have hit the century. But in 2008, SAHC became 100 years old.

4. To commemorate this event it was decided to build a Dewan Centennial. The only problem is money. We need money to make this dream a reality. But suddenly we are made aware that everyone, every old boy and (old) girl is poor. No donations have been forthcoming.

5. But I don’t think we are so poor that we cannot donate a month’s income over a period of 2-3 years.

6. Easy to say but what about you? Well my pension is half my last drawn pay. That makes it RM10,000 per month. In a generous mood I will give RM20,000. Maybe more later, Insya’allah.

7. So how about it? Don’t pledge. Just give. Anything less than one million Ringgit will be accepted.

8. Please make out crossed cheque to SAHOCA Centennial Fund c/o Kolej Sultan Abdul Hamid, 05460 Alor Setar.

Mahathir bin Mohamad

Class of 1946

Friday, September 3, 2010

1. America has a strong grudge against Iran ever since the Islamic revolution when personnel in the United States’ embassy were incarcerated in Iranian jails for a very long period. Attempts to rescue them failed miserably when helicopters carrying a special force crashed.

2. Because America supported and sustained the autocratic and oppressive rule of the Shah, the Iranian revolutionaries labeled the United States as Satan.

3. As usual the US resorted to economic sanctions. Reserves belonging to Iran held in America were frozen.

4. However the sanctions could only be effective if the rest of the world followed suit. To get the world to back the sanctions, America has been building up a case against Iran for attempting to produce nuclear weapons.

5. Although Iran has a lot of oil, it does not have adequate refining capacity. It needs to import gasoline and Turkey has been one of the suppliers. Malaysia too has been supplying gasoline to Iran.

6. America would very much like to invade Iran and engineer a regime change. But America’s experiences in Afghanistan and Iraq have shown that military invasion is not only extremely costly but will cause America to be stuck in endless war. So America is trying to do it on the cheap by strangling Iran economically.

7. America has been known to tell lies in order to launch attacks against weak countries. The stories about Iran being about to produce nuclear weapons are no different from the stories about Iraq’s weapons of mass destruction. They are invented to get the world to support America’s revenge against Iran.

8. Even the simple-minded must know that America has more than 10,000 nuclear warheads. Should any small country use nuclear weapons the Americans would not hesitate to erase that country from the world map with the nuclear weapons in America’s arsenal. I don’t think the Iranian leaders are so dumb that they would take this risk.

9. But the story that it might can convince the world that Iran is a threat and it must be strangled through sanctions so that it would not be able to develop such weapons. Sanctions against countries are inhuman. Sanction against Iraq caused the death of 500,000 children and thousands more were born deformed. Sanctions is a means of slow genocide. This is the preferred weapon of the United States since it dares not invade Iran. The United States’ action is entirely in the interest of revenge against a country that had defied it in the past. It is not about saving the world from an Iranian nuclear war.

10. Governments of other countries should remember this background to America’s anti-Iranian stance. They should not allow themselves to be used by the Americans to avenge their humiliation in the past. Governments of other countries should remember that in collaborating with the United States they are participating in the killing of children and innocent people of Iran. It is heartening to note that Turkey has now decided not to kill Iranians by lifting the ban on the export of gasoline to Iran.
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