Internet addiction on the rise among Malaysian youths, Asians one of the most addicted to the Internet

Enough evidence to show links to anxiety, decreased job productivity, says expert.

CYBERJAYA: A 14-year-old boy loved gaming so much that he did not leave his home for half a year until his parents hauled him to therapy for Internet addiction.

This sounds like a story that happens in Japan, China or South Korea, where teenagers have died from binging on their computers. But this case happened right here in Kuala Lumpur.

At the International Society of Internet Addiction (Isia) Conference here, researchers said they were most worried that Malaysian youth were increasingly using the Internet in excess, with local studies revealing that 37% of Malaysian parents felt their children’s online life was interfering with their home and school obligations while 18% said their children were sacrificing basic social activities.

The research, led by child psychologist and Isia spokesperson Dr Norharlina Bahar, found that males under the age of 24, from the Klang Valley, Ipoh or Penang, were the most susceptible to Internet addiction in Malaysia.

“Most spend time on online games and browsing social media and there is enough evidence to show links to anxiety, depression, physical health problems, school disconnection, unemployment, decreased job productivity and social isolation,” she said.

Studies have also found frequent use of the Internet could translate to low self-esteem, depression, boredom and attention-deficit hyperactive disorder.

“There is no denying that Internet eases our life but when it affects your mental health capacity and interferes with your day-to-day work, then you need help,” she added.

In the case of the young boy, Dr Norharlina said he became irritable and angry when he was cut off from the digital world by his parents as part of the treatment.

“This is becoming a bigger problem now,” she said.

The challenge for the academic community is translating their data into tangible policies, as definitions of Internet addiction are still being worked out, she added.

That is something the Malaysian Communication and Multimedia Commission (MCMC) is seeking to address, by adapting research on Internet addiction into guidelines that can be used by school counsellors or pa­rents to identify addiction in adolescents, said MCMC advocacy and outreach senior director Eneng Faridah Iskandar.

“We want to know when is usage going to be a problem. When should I start regulating my child’s use of the Internet? We want to develop self-help tips that parents can use,” she said.

The conference was attended by 200 researchers and psychologists from 10 countries to present their findings on Internet wellness and discuss policies to address the effects of the digital world on users’ health.

Asians one of the most addicted to the Internet

CYBERJAYA: The Middle East, North America and Asia have the highest number of people addicted to the Internet, said Hong Kong University (HKU) Psychology. Department Associate Dean Prof. Dr Cecelia Cheng.

Dr. Cheng, who presented the findings of a HKU study on Thursday said that findings suggest that the more a country experiences traffic jams, air pollution and low life satisfaction, the more likely its citizens will be addicted to the Internet.

She added that out of 31 countries surveyed, European and South American nations had the smallest number of people addicted to the Internet. “Basically if the life satisfaction of a country is low, the people in that country are more likely to be addicted to the Internet, particularly gaming,” she said.

Speaking at the International Society of Internet Addiction (ISIA) conference here, Dr Cheng added that there was a link between countries that have high levels of air pollution and Internet addiction.

“The study suggests that the problem of Internet addiction could be linked with the external environment that drives people indoors. Low life satisfaction also suggests that people look to the Internet for escapism when they are dissatisfied with the outside world,” she said.

Dr Cheng pointed out that less people are addicted to the Internet in Europe because pollution and crime rates are generally lower.

“In Europe, and people there can afford to engage in more outdoor activities than those in the Middle East and Asia,” she said.

She added that improving the quality of environmental conditions might encourage residents to engage more in outdoor activities rather than relying solely on browsing the Internet at home for stress relief.

Malaysia was not surveyed in the HKU study, but local authorities suggested that Internet addiction was a rising trend here too. According to the Malaysian Communication and Multimedia Commission (MCMC), 50.4% of children already have a smartphone by the age of 12 and Malaysians have a 100.4% penetration rate for Internet connectivity and a 143% penetration rate for cellular use.

An ISIA study led by Dr Norharlina Bahar also found that the prevalence of problematic Internet users in Malaysia could be as high as 49.2%, with people spending at least five-hours in front of screens daily.

In last year’s World Happiness Index which measures a country’s general wellbeing, Malaysia ranked 61 out of 161 countries, behind Singapore, Indonesia, Thailand and the Philippines.

By Nicholas Cheng The Star/ANN

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No water but officials flush with funds: abuse of power, nepotism, cronyism, bribery and money laundering

 

Logo Jabatan Air Negeri Sabah - http://malaysianlogo.blogspot.my/2014/06/jabatan-air-negeri-sabah-sabah.html

KOTA KINABALU: Everywhere in Sabah, there was only one topic – the huge stash of cash found in the homes of Sabah Water Department director Ag Tahir Ag Talip and his deputy Teoh Chee Kong.

Sitting in the lap of luxury: There’s more to Ag Tahir (left) and Teoh than meets the eye.

And what made Sabahans even more upset was the fact that there are many areas in Sabah still without proper piped water and disruptions are common. The usual excuse is: there are insufficient funds to carry out projects.

One resident from Sabah’s northern Kota Marudu said many villagers have been asking the state Water Department to get piped water and meters for their houses.

But the officials often said there were no funds although the main water pipe ran past their village.

“We suffer without water especially during the dry season. They have never entertained us because we can’t pay for the deposit,” said a Kota Marudu resident.

“It is not a question of envy. It is theft of public funds to me,” said restaurant owner Cheah Kok Lo.

A Beaufort resident, Rosita Ismail, 35, said: “I hope their arrest will serve as a lesson to future leaders.

“Don’t keep telling us the government has no money and to be patient,” she added.

Giant treasure trove - 38 companies got million-ringgit deals while public left without water

They lived like ordinary people, with only the luxury cars giving a hint of the wealth they have amassed. But even MACC investigators are shocked at the amount of money two top officers of the Sabah Water Department skimmed from projects in a state where many areas do not have piped water. The treasure just got bigger, too – another RM870,000 in cash and more jewellery have been recovered and the total could hit RM300mil.

 

Proof is in the mansion: Teoh’s house in Luyang near Kota Kinabalu.

KOTA KINABALU: Thirty-eight companies owned by family members and proxies of Sabah Water Department director Ag Tahir Ag Talib and his deputy Teoh Chee Keong were given water contracts worth millions for RM3.3bil worth of federal projects since 2010.

Malaysian Anti-Corruption Commission (MACC) sources said that 17 of the companies were held by siblings and family members of Ag Tahir and another 21 companies were owned by Teoh’s relatives.

The sources said the 54-year-old director and his 52-year-old deputy will be made to declare all their assets under Section 36 of the Malay­sian Anti-Corruption Act 2009 as the MACC wants comprehensive details of their wealth.

“We want to know what they own in a comprehensive way,” MACC deputy chief commissioner Datuk Azam Baki said yesterday.

He said they needed the two to give full details of their property and wealth. The sources said 40 witnesses have been identified, mainly Water Department officials and contractors.

Asked about talk that a few witnesses had left the country, Azam said all witnesses wanted by MACC were in Sabah.

He said they were gathering more documents and information in their investigations into the case, which involves abuse of power, nepotism, cronyism, bribery and money laundering.

Azam said they would be using Asean’s Mutual Legal Assistance Agreement (MLA) to get cooperation from a neighbouring country to get back money stashed in a bank account linked to the duo.

He said a special MACC team of investigators involving 70 personnel has been working on the case since last year.

Another RM870,000 and gems recovered as safes are opened

KOTA KINABALU: Graft investigators are still amazed at why two top officials of the Sabah Water Department kept a whopping RM53.7mil cash with them as the wealth continued to pour out of bank safe deposit boxes.

An additional RM870,000 in cash and a large amount of jewellery were recovered yesterday after Malaysian Anti-Corruption Com­mis­sion (MACC) investigators opened the last of the boxes.

The MACC is expected to call jewellers to assist in estimating the value of the jewellery recovered.

The investigators, who have been questioning the director Ag Tahir Ag Talip and his deputy Teoh Chee Kong for the past 72 hours, have yet to get answers on the source of cash found in both their houses and offices.

“We don’t know yet. We are recording their statements but we still have not established how and why they had such a large of amount of money,” an MACC investigator said on condition of anonymity.

Sources said the designer watches seized have also yet to be valued.

The 127 property and land titles found at the deputy director’s house might easily be worth over RM60mil in conservative estimates, the sources said.

“At the end of the investigations, we might be looking at between RM200mil and RM300mil in total,” the source added.

The two are under investigations for alleged abuse of power, kickbacks and money laundering in connection with RM3.3bil worth of contracts for federal-funded pro­jects given out by the Water Department in Sabah since 2010.

By Muguntan Vanar and Stephanie Lee The Star/ANN

Modest cover for a pile of treasure

KOTA KINABALU: On the outside, they were well-paid civil servants who were living modest lives and not known to flash their wealth.

But behind closed doors, they were sitting on a mind-boggling amount of cash, jewellery, watches and cars.

 

Sitting in the lap of luxury: There’s more to Ag Tahir (left) and Teoh than meets the eye.

Sabah Water Department director Ag Tahir Ag Talip and his deputy Teoh Chee Kong were quite well-known in their neighbourhoods but no one had the faintest idea of the pile of treasure they were sitting on.

The 54-year-old Ag Tahir did have a penchant for luxury cars.

“He keeps to himself and he does not socialise much although he is well known,’’ said a person who knows him.

He said he had seen the director use most of the luxury cars which were seized by the MACC on Wednesday.

“I’ve seen him in the Range Rover. I believe all the cars in the media pictures are his. I’ve seen him driving those vehicles,” he said.

However, it is not known if the vehicles were registered under under Ag Tahir’s name.

It is learned the cars were seized from the house of one of his family members.

The nine luxury vehicles seized included a Range Rover V8 (worth RM1.1mil), Mercedes Benz C300 (RM308,000), Audi A1 (RM180,000) and Lexus ES (RM260,000).

Others familiar with Ag Tahir said he is from Sabah’s south-western Bongowan in Papar district. He was not known to be a show-off although he did take overseas holidays. He is a father of three – two daughters and one son – with the older daughter married with her own family.

The 52-year-old Teoh, from whose house and office graft investigators seized some RM7.5mil cash and 127 land titles and grants, was described as a very low-profile officer who moved around in an old Toyota Vios.

He lives in a bungalow in Luyang here, was from Sabah’s south-western Beaufort district. However, he had made many trips to Australia and might have been planning to migrate.

An engineer by training, he was from a well-to-do Sabah family involved in construction, development and hotel businesses. Friends and associates describe him as a very helpful person who never flashed his wealth.

“He does not even wear a watch,’’ a friend said.

Teoh had been in the post for about four years and was also in charge of the department’s west coast water operations.

Both have been remanded for a week since Wednesday.

MACC officers have also arrested a contractor with the title of Datuk and his company accountant.

More arrests are expected as they also try to trace money banked into a neighbouring country.

Jewellery seized from Sabah Water Dept duo valued at over RM3mil

 

 

Some of the watches, rings and necklace seized from the homes of the civil servants in Kota Kinabalu.

KOTA KINABALU: Jewelleries that were seized from the two senior officers of the Sabah Water Department following corruption investigations have been valued at more than RM3.6mil.

It is learnt that the valuables seized from department director Awang Tahir Awang Talip (pic) weighed some 14.5kgs, with a bank valuing them at about RM2.74mil.

The ones recovered from the deputy director, Teoh Chee Kong, have been valued at around RM900,000.

Sources said the valuation process of the jewelleries, including watches, gold rings, bracelets and necklaces, was carried out from 10.30am to about 12.15pm on Friday.

Tahir and Teoh have been remanded following their arrest on Tuesday by Malaysian Anti-Corruption Commission officers who discovered over RM114mil, including RM53mil cash, and valuables in their homes and offices.

PWD director claims trial to two charges

KUALA LUMPUR: Malacca’s Public Works Department director Datuk Khalid Omar was charged in a Sessions Court here with two counts of money laundering involving more than RM4mil.

Khalid, 56, was accused of money laundering activities totalling RM2,135,634.13 in his Amanah Saham Didik account on July 1, last year. He also faced a second charge of having RM1,984,797.08 in his Amanah Saham Wawasan 2020 account which was the proceeds from illegal activities, on Sept 1, the same year.

The offences were alleged to have been committed at Amanah Saham Nasional Berhad, Menara PNB, Jalan Tun Razak here.

He was charged under Section 4(1)(b) of the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (Act 613).

Khalid claimed trial before Judge Azura Alwi yesterday.

Judge Azura then granted deputy public prosecutor Ahmad Akram Gharib’s request to transfer the case to the Sessions Court in Malacca.

On Sept 29, Khalid claimed trial in a Sessions Court in Malacca to 16 counts of corruption and money laundering, involving more than RM1.28mil.

He pleaded not guilty to all charges – 13 for corruption and three for money laundering. Judge Meor Sulaiman had set bail at RM100,000 for the corruption charges and RM150,000 for the money laundering charges with one surety. Khalid posted the bail.

The court set Nov 4 for mention.

TI Malaysia: Set cap on civil servants’ tenure

KUALA LUMPUR: Transparency International Malaysia is calling for a maximum tenure of three years for senior civil servants, following the biggest ever seizure by the Malaysian Anti-Corruption Agency (MACC) in Sabah.

Its president Datuk Akhbar Satar said putting a cap on the tenure could prevent the officials from getting too close to their clients and being influenced by those with money.

However, those with corrupt intent would surely find a way to cheat, he added.

“Therefore, the most important thing is, the handlers must have integrity,” he said, adding that a crisis of integrity is looming in the country.

On Wednesday, the MACC seized RM114mil worth of cash from the homes and offices of the Sabah Water Department’s director and his deputy, besides also recovering luxury vehicles, watches, jewellery and handbags.

Akhbar said he was surprised the officers could, and dared to, amass the amount of cash and luxury products.

“It’s a red flag if the officers are living beyond their means,” he said.

Citing statistics from the Association of Certified Fraud Examiners, Akhbar said 5% of a company’s revenue is lost to fraud each year.

He said the prevention unit of the MACC and the Malaysian Institute of Integrity should be roped in to train staff members.

“Don’t just train them on how to improve productivity or get promoted. Make them sit for anti-fraud courses from time to time, too.”

For checks and balances, Akhbar suggested that huge projects by government departments must be approved by an oversight committee, a common practice in Britain and many European countries.

Centre to Combat Corruption and Cronyism (C4) founder Cynthia Gabriel said besides limiting the tenure of top government officers, declaration of assets once every few years should also be made compulsory.

She added that annual reports of government departments must be published for the public to keep track of their activities, expenditure and projects.

By Tho Xin Yi The Star/ANN

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Water fiasco: RM114 million seized from Sabah water officials

https://youtu.be/01stOYgM9x0

It was a record haul by the Malaysian Anti-Corruption Commission – RM114mil seized from two top officers of the Sabah Water Department, comprising RM53.7mil in cash found in their homes and offices as well as RM60mil in bank accounts. Also seized were luxury cars, jewellery, land titles, branded watches and designer handbags. MACC expects to uncover more as it seeks to access five bank safes and foreign accounts.

It came as a shock to even the most seasoned graftbusters.

Lap of luxury: The MACC displaying the cars seized from both the director and his deputy during the press conference in Kota Kinabalu. Inset: The bags in the boot of the accused’s car were believed to have contained vast amounts of cash.

In the biggest ever seizure in its 49year history, the Malaysian AntiCorruption Agency (MACC, formerly the AntiCorruption Agency) recovered RM114mil from the top two officials of the Sabah Water Department – including RM53.7mil in cold hard cash that took more than 30 officers 15 hours to count.

Also recovered from the homes and offices of the department’s director and his deputy were nine mostly luxury vehicles, expensive watches, jewellery and 94 highend handbags.

The cash – RM45mil seized from the director and RM7.5mil from his deputy – was found stashed inside safes, cupboards, drawers and also a car boot, according to the MACC.

Also seized was RM1.18mil in over halfadozen foreign currencies.

The two senior state civil officers were arrested yesterday and remanded for a week for investigations into alleged kickbacks involving RM3.3bil worth of federal projects.

“It is the highest amount of cash we have ever recovered in our history as MACC or when we were known as the AntiCorruption Agency,” newlypromoted MACC deputy chief commissioner (operations) Datuk Azam Baki told a news conference here.

A 55yearold businessman with a Datuk title, who is believed to be the brother of the deputy director, and his company accountant have also been arrested in connection with the probe.

In what is shaping up to be the nation’s biggest corruption and money laundering investigations, the MACC has frozen some RM60mil in accounts of the two officials and also the company they purportedly have links to.

“In cash and bank accounts, we have seized RM114mil in total,” Azam said.

MACC, he added, believed that a large sum of money might also have been channelled to bank accounts in a neighbouring country.

“We will make an effort to get the money back,” he said without disclosing the country or the suspected amount in the accounts.

MACC is also in the process of trying to open five safes at a bank where they expect to recover more cash, said Azam, adding that they needed to follow bank rules to access the safes.

The MACC team also found 127 land titles worth millions of ringgit.

Among the vehicles seized were a BMW 535i (which costs RM500,000), MercedesBenz C300 (RM308,000), Range Rover SE V8 (RM1.1mil), Mazda6 (RM195,000), Volvo XC60 (RM270,000), Lexus ES (RM260,000), Audi A1 (RM180,000) and Ford Ranger (RM112,000).

 

Photo: The Star/ANN

The make of the ninth vehicle is unknown. In all, the cars total some RM3mil in value.

The luxury watches comprised brands like Patek Philippe, Tag Heuer, Rolex, Cartier and Guess while the handbags included Chanel, Burberry, Versace, Louis Vuitton and Hermes.

“We are checking the authenticity of the branded goods and jewellery. We can’t put a value to them now.

“The amount of money we have seized does not commensurate with their salaries,” said Azam without disclosing the identity of the two government officers.

“We are also calling in more individuals to help facilitate investigations,” he said, adding that the suspects and all those who had been called in so far gave their full cooperation.

MACC, he added, hoped that more people would come out and assist in its investigations as it would not hesitate to arrest them if they failed to cooperate.

Azam said MACC started its investigations about a year ago following reports from the public.

“We have been carrying out intelligence gathering and surveillance on the duo and their business associates.

“The suspects have allowed for the monopoly of projects and prevented other contractors from getting a fair share of business,” said Azam.

He said MACC believed their activity had been going on since 2010.

Azam said the two were suspected of giving out contracts to certain companies owned by their relatives, resulting in many other contractors not getting jobs for waterrelated projects involving some RM3.3bil from the Federal Government.

“There have been many complaints by other contractors that they were not able to get projects,” he said.

On the cash and other funds recovered, he said if the court found the money to be illgotten, it would be returned to the Government.

Earlier yesterday, magistrate Stephanie Sherron Abbie granted seven days’ remand for the four after an application was made by MACC investigating officer Mohd Faliq Basiruddin.

Azam said the MACC would apply to extend their remand if it was unable to complete its investigations within the week.

“We are still working out the money trail, and it will take some time as it is a complex investigation,” he said.

Hundreds of millions spent to improve Sabah’s water supply

KOTA KINABALU: The Federal Government is spending hundreds of millions of ringgit annually through special allocations to improve the water supply in Sabah.

These are mainly for the construction of water treatment plants, installation of new pipelines and replacement of ageing ones, according to officials.

In recent months, funding for 30 water treatment plants has been approved.

For the 2015 state budget, Chief Minister Datuk Seri Musa Aman had announced more than RM571mil for water supply improvement.

These included the construction of a water treatment plant and pipeline network installation in Beaufort at a cost of RM226mil.

The money was also for the construction of the Keningau Water Treatment Plant costing RM235mil and replacement of pipelines in Kota Kinabalu under the Reduction of NonRevenue Water (NRW) KK Phase IV programme costing RM38mil.

Last year, Deputy Chief Minister Tan Sri Joseph Pairin Kitingan announced that almost RM350mil was allocated to the Sabah Water Department to carry out several mega projects in the state.

These include the construction and refurbishment of water treatment plants in Beaufort, Kundasang, Semporna and Keningau.

Last February, Rural Development Minister Datuk Ismail Sabri Yaakob announced a RM48mil allocation for the construction of a water treatment plant at Moyog in Penampang.

Musa orders state govt to fully assist in probe

KOTA KINABALU: Chief Minister Datuk Seri Musa Aman has ordered the state government to give full assistance to the anticorruption investigators looking into suspected abuse of power, graft and money laundering involving projects.

“Let the authorities conduct their investigation without fear or favour,” he said in a statement.

Musa said the state government would also study the system and procedures on the tendering and awarding of projects in all departments to identify weaknesses or loopholes that provided opportunities for corruption and abuse of power.

He reminded civil servants to continuously uphold their integrity in discharging their duties.

Sources: The Star/Asia News Network

Sabah MACC probe: Cash total rises to RM114.5 million, five safety deposit boxes still unopened

KOTA KINABALU: More cash and items are expected to be confiscated as the Malaysian Anti-Corruption Commission (MACC) continues one of its largest corruption investigations involving four people, including two Sabah senior government officers.

MACC provided an update on the total amount of cash recovered from the senior officers and several bank accounts, including a company account, to RM114.5 million.

Five safety deposit boxes belonging to one of the senior officers are expected to be unlocked today.

MACC deputy chief commissioner (operations) Datuk Azam Baki said the unlocking of the boxes will have to be done with assistance from banks.

"Due to some regulations we have to comply with, we are not able to unlock the boxes immediately, but hopefully, we will be able to do so soon."

He also said that MACC officers will be sent to a neighbouring country where the suspects may have kept their money. MACC has also identified several individuals who may have links with the suspects who will be called up for their statement to be recorded.

By AVILA GERALDINE New Straits Times online

Two top Sabah Water Dept officers remanded over kickbacks from RM3.3bil project

 

The Sabah Water Dept director (right) and his deputy outside the Magistrate's court in Kota Kinabalu

KOTA KINABALU: Two senior officers of the Sabah Water Department and two others have been remanded to facilitate investigations into alleged kickbacks involving RM3.3bil worth of federal projects.

The 54-year-old director, his 51-year-old deputy and 55-year-old businessman brother, who is a Datuk, and his accountant, 50, were brought to the Magistrate’s court here on Wednesday.

Magistrate Stephanie Sherron Abbie allowed an application by Malaysian Anti-Corruption Commission investigating officer Mohd Faliq for the four people to be remanded for seven days.

On Tuesday, some RM3mil worth of cash were seized from the safe of one of the officers along with seven luxury vehicles belonging to them.

The MACC has frozen three bank accounts belonging to the director, the deputy and the Datuk in their investigations.

By Stephanie Lee and Muguntan Vanar The Star/Asia News Network

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Giving a choice of education to our students in Malaysian school systems

 

Malaysian school systems: http://www.globalchildhoods.net/index.php?page=malaysia

We can have many different school systems, as long as they all teach ways to acquire relevant skills and knowledge.

"Educational reforms must be driven by those who want to ensure that our future generations are able to be relevant in a global environment, earn good incomes and contribute to the nation’s prosperity."

THE Johor Sultan’s recent proposal for there to be a single school system for the country became the latest talking point amongst teachers last week. The Sultan’s proposal, among other things, entails the use of English as a medium of instruction.

In the public space, the discussion went off tangent straight away. Some were quick to defend the present system because they said we need to preserve the vernacular schools, which in turn are meant to ensure the preservation of Chinese and Indian culture and their respective mother tongues.

These supporters seemed to suggest that without vernacular schools, the people of these respective ethnic groups would lose their cultures and languages altogether.

There are some primary-level vernacular schools in rural parts of India that are intended for the continued use of their mother tongue. However, students have the flexibility of transferring to English-medium schools at the secondary level. This flexibility enables Indian education to be largely singular in its system, with a wide use of English as medium of instruction.

Unfortunately, our view of vernacular schools is tied to a political idea: that politicians of a particular ethnic group are required to defend these vernacular schools – regardless of their actual usefulness and value to their communities – as an indicator of their care and concern for the welfare of their communities. Education becomes a political tool.

Middle-class parents want the present system to be retained because the approach taken by successive Ministers of Education has essentially been to privatise education. Hundreds of licences for private schools have been issued, and even international schools are now open to locals with the means to afford them for their children.

So this wealthy group does not mind the present system because for them at least, education is now isolated from the mainstream ; and they are thus able to have what some of them believe to be a superior method of teaching children, and imparting the right kind of education.

Others who want a single system insist on vernacular schools being abolished, and in their place “a Malay (national) centric system” where schools can impart lessons on loyalty and patriotism with more vigour. They argue that we still need to instil patriotism, unity and racial harmony in our pupils and students.

They believe that a sufficient amount of indoctrination is necessary to turn our young into “true Malaysians”, while religious classes and adequate prayer halls will shape Malay children into good Muslims (since we now seek to be Syariah-compliant in everything we do).

We can safely say that under the present political setup, no government will dare abolish vernacular schools. So if national schools become more “Malay” and more Islamic, we can expect more vernacular schools to mushroom all over the country, keeping pace with private schools (local and international ) as they seek to attract ever-larger numbers of students whose parents have “no confidence” in the national school system.

We can have as many systems in our schools as we like, as long as the “one” overriding component in any system that matters is the idea that schools are for teaching students to acquire deep knowledge and skills relevant to the present world.

Schools of the 21st century do not exist primarily to build national unity, to foster narrow nationalism, or to protect any mother tongue. They are not designed to make you “a better person” or religious and sin-free, for that matter.

Today’s education is primarily about having the right skills to get jobs, as the effect of globalisation and new artificial intelligence will be taking a lot of our work away, and may ultimately make us all redundant if we are not prepared. In that context, education must be about giving our children relevant, useful and productive skills.

If the characteristics of the national school were to be modelled on those found in Switzerland, Finland or Singapore, for example, (with some modifications, of course), that would be acceptable because their focus is on producing students with skills that are useful in this present environment.

The diversity of available subjects, with options given to parents to decide on issues such as language, can accommodate different aspirations without compromising on quality or the schools’ central mission.

I recently met a Finnish teacher in Helsinki who was proud to tell me that almost all Finnish students speak three European languages, although there is no compulsion to do so in their school system.

According to this teacher, they have to be multilingual because then their job opportunities become much wider. Necessity always produces better education systems and methods.

Mother tongues can be kept alive through their regular use in a modern education system, without having vernacular schools. Let’s face it: having a poor and mediocre Tamil school system with low enrolment will not do much to help preserve the language and culture of the Tamil community. The only people who benefit are Tamil politicians.

Today’s education produces well-rounded children who will get jobs. It’s when they have no jobs that we worry, no matter how well they can speak their mother tongue.

Educational reforms must be driven by those who want to ensure that our future generations are able to be relevant in a global environment, earn good incomes and contribute to the nation’s prosperity.

By Zaid Ibrahim All kinds of everything

Former de facto Law Minister Datuk Zaid Ibrahim (carbofree@gmail.com) is now a legal consultant. The views expressed here are entirely his own.


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Why the US dollar will remain strong despite cheap money at near zero interest rates?

 

Relative strength: So far, the US dollar has been strong against emerging market currencies, flat against the euro and weakened relative to the yen. – AFP

THE Fed failed to raise interest rates on Sept 21, giving many markets and fund managers a sigh of relief.

Fed chairman Janet Yellen said the case for an increase has strengthened, but decided for the time being to wait for further evidence of continued progress toward the Fed objectives of maximum employment and price stability. Some analysts felt that any Fed rate increases would be seen as favouring one party in the US Presidential elections.

Caution having over-ridden valour, overall stock markets rallied somewhat, while currency markets moved sideways. Going forward, the futures market think that there is a 60% chance of the Fed raising interest rates in December, after the November Presidential elections.

The key question is whether the dollar will strengthen. So far, the US dollar has been strong against emerging market currencies, flat against the euro and weakened relative to the yen.

There are hoards of analysts trying to forecast short-term and long-term exchange rate movements. Exchange rates are determined by the supply and demand in currency pairs, usually between the dollar and the most traded currencies, such as euro, sterling, yen and other liquid currencies (Australian dollar etc). In turn, the supply and demand for foreign exchange would depend on the current account (trade flows) and capital account (financial flows) of the balance of payments.

If one only looked at trade flows, then exchange rate expectations would depend on whether countries are running large current account surpluses or not, on the basis that a surplus country’s currency would strength. On that basis, one would expect that the Euro should strengthen, because the eurozone is now overall running a current surplus of roughly 3% of GDP. Germany alone is runnng a current account surplus equivalent to 8% of German GDP. However, investor nervousness about the sluggish outlook for the eurozone has keep the euro on the weak side.

One reason is that capital flows are now driving the exchange rate, due to large portfolio flows in search of yield and total returns, as financial assets become more globalised. Theoretically, portfolio flows should be driven by covered interest rate parity, meaning that foreign exchange traders arbitrage in spot, forward and futures markets to equalise risk-adjusted interest rates between countries. Hence, expectations of interest rate differentials between countries matter in shaping exchange rate behaviour.

Interest rate behaviour is determined today largely by monetary policy, which is why global markets are particularly nervous about US Fed interest rate adjustments. Since the US dollar is the world’s benchmark currency, with roughly two thirds of global financial assets measured against the dollar, global financial markets move in expectations of future Fed interest rate increases.

The US remains the dominant military and economic power and is consequently the safe-haven currency. Whenever geo-politics become tense, as is the situation currently, the flight is always towards the dollar.

Furthermore, all signs point towards the US economy performing best amongst the advanced economies, despite overall slower growth post-crisis.

There is enough evidence that the US is already reaching full employment levels at 4.9% unemployment rate, with anecdotal evidence that companies are hiring in anticipation of growing consumer confidence.

There is however a disconnect between US recovery and trade growth. The US consumption pattern has changed from consuming durables towards spending on services, such as new apps and digital entertainment. A partial shift towards manufacturing at home also explains why exports to the US have not increased substantially. With global trade growing slower than GDP, emerging markets are not growing due to the traditional cyclical uptick in exports.

The bad news is that historically, a strong dollar has been associated with slower global growth and vice versa. The explanation is that when the dollar is weak, capital flows out to the emerging markets, stimulating trade and investments. When the dollar is strong, capital flows back to the US and if the US is unable to recycle these flows, global growth weakens.

As the taper tantrum in 2013 showed, when the Fed signalled an increase in interest rates, emerging markets suffered huge turmoil of capital outflows, leading to either interest rate increases or sharp devaluations.

The power of the US to recycle global capital flows is critical to global recovery. Unconventional monetary policy in the US, in the form of near zero interest rates, is not working because the transmission mechanism of cheap money to the real economy is not working. Liquidity remains within the central bank-financial market nexus, with relatively slow lending to finance private sector long-term investments. The private sector is also not confident about the future until there are stronger signs of sustained consumer spending. Furthermore, much-needed public sector investments in infrastructure are being constrained by the large debt overhang and toxic politics.

In short, global capital flight to the dollar, with near zero interest rates, will mean global secular deflation. The reason is that zero interest rate dollar holdings have the same deflationary role as gold in the 1930s. Holding gold was deflationary because spending stops as more and more gold hoarding drained liquidity from the market.

Wait a minute. If the Chinese economy is still growing three times faster than the US in GDP terms (6.7% versus 1.8%), shouldn’t the yuan appreciate? Yes, China is running a current account surplus, but capital outflows are currently running about the same level as trade surpluses, so foreign exchange reserves are flat. Many people think that capital outflows indicate that the yuan will remain weak against the dollar until private sector confidence recovers.

The European and Japanese central banks are running negative interest rate policies precisely because with interest rates relatively lower than the dollar, capital flows will induce lower exchange rates, which will hopefully reflate their economies. The Fed has exactly the same fear as the People’s Bank of China in 2009 when China was growing at more than 10% per year.

Higher Fed interest rates would attract higher capital inflows, pushing up the dollar and inducing even higher asset bubbles, with no inflation in sight.

In sum, much will depend whether the US will use more fiscal stimulative policies and less of unconventional monetary policy to revive productivity growth. It looks as if we will have to wait for a new President to make that strategic call. We will know by November,

By Andrew Sheng

Tan Sri Andrew Sheng is Distinguished Fellow, Asia Global Institute, University of Hong Kong.

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Need to ‘civilise’ capitalism

THE world economy is in a much worse-off shape than even many who know had expected, or what central bankers have come to understand.

Whatever growth there is remains paltry and uneven. Deflation was viewed as a strictly Japanese phenomenon. Now it’s a global threat, being revived and updated by Harvard’s Lawrence Summers as “secular stagnation.” The International Monetary Fund (IMF) says 2016 will be the fifth straight year of global growth below 3.7%, its average for nearly two decades before the recent great recession.

G-20 economies (representing 85% of the world economy, comprising most rich nations and major emerging economies) are expected to again downgrade their forecast to below 3% global expansion this year. They are likely to miss the target they had set for themselves in 2014 to lift their combined output by 2% over the IMF’s then forecast for 2018.

In early September, G-20 leaders met in Hangzhou, China, in the wake of Brexit and the rise of populist politics on both sides of the Atlantic with a strong sense of urgency to placate public discontent. Indeed, they have to “civilise’’ capitalism (Australian Prime Minister) as they seek to revive economic growth and address growing public scepticism about the benefits of free trade and growing backlash against globalisation. “Growth has been too low, for too long, for too few” (IMF chief Christine Lagarde).

Hangzhou consensus

This time G-20 leaders were on the defensive, amid a welter of familiar complaints back home on frustratingly slow growth, rising social inequalities and the surge of corporate tax avoidance. Looking back, the summer of 2016 is viewed not as a period of respite but as the moment it became clear that policy solutions from G-20, IMF and major central banks aren’t working well.

They have proved woefully inadequate. As a result, businesses are pessimistic about growth prospects, as reflected in low expectations for long-term interest rates. Yield on German 10-year notes is negative 0.116% p.a. What’s needed is a new approach. There has to be more growth and growth must be more inclusive.

At Hangzhou, the G-20 list of remedies rivals the world economy in its complexities, running beyond 7,000 words (excluding several lengthy appendices) addressing many issues, including immigration, terrorism, energy and Zika virus. Indeed, it risks looking “like an X’mas tree”. It was preceded by a surprising display of co-operation between China and US, who together ratified the Paris climate change agreement.

A long list of problems was on the table: including overstretched central banks, trade disputes, corporate tax avoidance, inequality and the populist backlash against globalisation and free trade. In the end, the Hangzhou consensus reflected an “innovative, invigorated, interconnected and inclusive” approach towards its main goals. It adopted a wide-ranging package of policies based on “Vision” (of innovative, new drivers of growth); “Integration” (forge synergy among fiscal, monetary and structural reform policies); “Openness” (build an open world economy, rejecting protectionism); and “Inclusiveness” (ensure growth promotes the role of women and youth, and generates quality jobs, addresses inequality and eradicates poverty).

All these won’t be enough to get us out of the rut. The real setback remains one of credibility. G-20’s sprawling agenda is filled with items that have little chance of success. Many stakeholders and opinion-makers are unlikely to take them really seriously. Experience shows that G-20 is better off when it focuses. Better stick with a limited agenda that has a high chance of achieving an outcome. Sometimes, more is done by doing less.

As host, China promoted innovation as the core of the G-20 agenda. This is sensible because: (i) the use of monetary and fiscal policies can only achieve so much. In the longer-run, real progress has to depend on improved productivity – getting more out of existing resources; and (ii) overcoming anxiety arising from the use of technologies and artificial intelligence that threaten jobs. Getting G-20 to think collectively about the downside of innovation and fintech can only help. There is then the endorsement of a set of non-binding principles designed to guide governments in devising cross-border investment policies in an effort to revive cross-border investment, which is sagging along with global growth and trade. The intention is good – there is a need to foster a more open, transparent global environment for investment, and ensure national and international rules remain clear, coherent and consistent. No investment, no trade, no growth.

Globalisation

The Organisation for Economic Co-operation and Development (OECD), i.e. the rich nations’ club, warned last week that growth in world trade is set to lag global growth in 2016, i.e. globalisation as measured by trade intensity has stalled. Other signs are just as worrisome: (i) ratio of world trade to output has been flat since 2008; (ii) volume of world trade stagnated between January 2015 and March 2016; (iii) stock of cross-border financial assets peaked at 57% global GDP in 2007, down by 36% over 2015; and (iv) inflows of foreign direct investment remained well below 3.3% of world GDP reached in 2007.

Indeed, the growing backlash against trade liberalisation as well as recessions in some big commodity producers are adding to the slackening of trade flows and is likely to erode already flagging productivity and ultimately global living standards. All this, at a time of poor economic performance in the rich nations, rising inequality and big shifts in the balance of global power.

So much so, failure to deal with the negative consequences of globalisation has surged into the political agenda of several large nations (including the US) facing forthcoming elections. Worse still, growth is too meagre to generate the jobs that youths expect and to fulfil pension promises for the elderly. Indeed, globalisation has stalled. Does it matter?

Yes it does. Recent history witnessed the first fall in global inequality of household incomes since the early 19th century. Average world real income rose by 120% between 1980 and 2015. The opportunities accorded by global integration should not be dismissed. No man is an island. Globalisation’s failure, however, lies in (a) not ensuring that its gains are not better shared, and (b) just as dismal is failure to assist those adversely affected. But, the net impact on jobs and wages from rising productivity and new technologies has far exceeded rising imports.

Globalisation shouldn’t be made the scapegoat. What’s really needed is better management. I recall Nobel laureate Joseph Stiglitz’s main message in his 2002 book Globalisation and its Discontents: the problem is not globalisation but how the process is being managed. The rules of the game has to include measures to “tame globalisation.” Unfortunately, global management didn’t change. Today, the new discontents are bringing home the same message – only more intensely.

Inequality

G-20 leaders in Hangzhou were preoccupied with the need to placate public discontent about the unequal distribution of the benefits of free trade and globalisation. Hence, a lot of talk about people. China’s President Xi Jinping set the tone: “Development is for the people. It should be pursued by the people and its outcome should be shared by the people. This is not just a moral responsibility. It also helps unleash immeasurable effective demand.”

In China, Xi said: “We will make the pie bigger and make sure people get a fairer share of it.” The global Gini coefficient – the economist’s measure of inequality, has raced passed (Xi’s) “alarm level of 0.6, and now stood at 0.7” (the closer it approaches 1, the greater the inequality in income distribution). “We need to build a more inclusive world economy.”

Unfortunately, globalisation is today seen naively as a zero-sum-game (I win, you lose), with a US presidential hopeful arguing that China’s rise has come at the expense of US manufacturing heartlands – reflecting a rising disenchantment with the global economic order. It’s spreading. Last week, France publicly called on Brussels to end trade deal talks between US and Europe, citing a globalisation “without rules, where social models are pit against each other and dragged downward, where inequalities grow.”

This “docile of discontent” is best illustrated by Branko Milanovic’s controversial “elephant chart,” which was created (from 196 household surveys worldwide) by ranking world population (from the poorest 10% to the richest 1%) showing growth in income between 1988 and 2008, i.e. from the fall of the Berlin Wall to the fall of Lehman Brothers.

His global chart traced the distribution of growth in real income as first sloping right up, then down sharply and up again steeply, like an elephant raising its trunk: it shows big income gains at the high middle and very top, with the era of globalisation offering very little or nothing for those in between (at the bottom and in the middle and working classes in the rich nations who are poorer than the top 15% but richer than everyone else; this group seemed scarcely better off in 2008 than they were 20 years before).

The stagnant fortunes of these Trumpian and Brexiteer discontents in advanced economies are squeezed between their own countries’ plutocrats and Asia’s rapidly rising middle-class. It is this dangerous sharp dip in the chart to near zero which reflects those who occupy this dangerous docile. Milanovic’s study showed that (a) Chinese middle-class and the world’s 1% rich have gained handsomely in the era of globalisation; (b) lower middle-class in rich countries have fared poorly; and (c) rising income inequality remains a serious problem.

What then, are we to do

Global growth are revised downwards yet again as its traditional engines of trade and investment sputter. OECD now estimates the world economy would muster growth of only 2.9% this year. I consider this to be optimistic. Worse, potential growth has fallen in both advanced and emerging economies. The rise in income and wealth inequalities exacerbates the glut in global savings (reflecting the global investment slump). This can only lead to lower trend growth. Economists call this “hysteresis”: long-term unemployment erodes workers’ skills and human capital; and because innovation is embedded in new capital goods, low investment leads to permanently lower productivity growth. That’s why structural and market reforms are vital to boost potential growth. This has become critical in Asean, especially Malaysia.

There are no politically easy solutions. I know fiscal policy (especially productive public investment that boosts both supply and demand) remains hostage of high debts and misguided austerity. For now, the world is likely to remain as IMF’s new mediocre, or in Summer’s secular stagnation, or China’s new normal.

Make no mistake. There is nothing healthy or normal about rising inequality in the face of continuing slow economic growth. Worse, it leads to rising populist backlash against trade, migration, globalisation, even technological innovation. Following the old road of relying purely on cheap and plentiful money leads to a dead end eventually.

Policymakers’ renewed focus on the need to make capitalism more inclusive is welcome. But rich nations need to ditch austerity in favour of purposeful fiscal support – emphasising structural supply side reforms. There is no other way to unleash effective demand. The tools are already available. Finally, of course, there is innovation.


By Lin See-Yan

Former banker, Harvard educated economist and British Chartered Scientist, Tan Sri Lin See-Yan is the author of “The Global Economy in Turbulent Times” (Wiley, 2015). Feedback is most welcome; email: starbiz@thestar.com.my.


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