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Tuesday, July 7, 2015

Separate the Attorney-General’s powers to correct a flaw in Malaysian legal system !

Tan Sri Abdul Gani Patail

Revise Attorney-General's powers

There is a flaw in our system, inherited since before Independence, that may prevent the public from giving their complete trust.

THE political challenges faced by Datuk Seri Najib Tun Razak continue to mount. He has issued several denials but his detractors are showing no sign of stopping.

Last week, internationally respected newspaper The Wall Street Journal published a story alleging that money from 1MDB somehow found its way into Najib’s personal bank accounts. Najib has denied any wrongdoing and he is said to be mulling legal action against the newspaper.

The response by Attorney-General Tan Sri Abdul Gani Patail is particularly noteworthy.

According to Gani, a multi-agency task force will probe the allegation, looking into the trail of money from 1MDB and examining if there has been any wrongdoing.

Even though Gani did not spell it out word by word, the implication is that our Prime Minister has not stopped agencies in his own Government from conducting what could become a criminal probe against him.

This is a healthy step and it is also the right decision by the Prime Minister. The whole saga has been a protracted one and I look forward to its conclusion.

According to reports that cited Gani, the multi-agency investigation team comprises the Malaysian Anti-Corruption Commission (MACC), the police and our central bank, Bank Negara.

I welcome the formation of this special team. It is imperative that all allegations are investigated thoroughly. To do so does indeed require cooperation from various agencies.

Having said that, I have a concern about how the public will react once this team concludes the investigation.

The most important element in any probe that involves public figures is public confidence. For the public to accept the outcome of the investigation, they must believe in the integrity of the agencies.

Unfortunately, there is a flaw in our system that may prevent the public from giving their complete trust. We inherited that flaw since before Independence and until today we have never tried to fix it.

The flaw centres on the dual roles of the Attorney-General. He is the principal legal adviser to the Government and he is also the one with sole discretion to decide whether or not to prosecute.

Yes, there are safeguards to ensure he makes prosecutorial decisions with independence and integrity. But that is a matter of procedures.

We are talking about a high-profile investigation where public confidence and public perception are just as important as everything else.

Imagine a situation where the investigation team finds that the allegations are false. They then submit their files to the Attorney-General.

The Attorney-General then would logically decide that there will be no prosecution. How will the public react to this?

My worry is that the public will simplistically say that we are seeing a cover-up. Of course, we will not know the detailed findings from the investigation and we can’t expect the agencies to be disclosing information in great detail either.

But we may end up with the public accusing the Attorney-General of merely protecting his boss whom he has been advising all this while. That would be most unfortunate.

However, we cannot blame the public for not fully trusting the system. Stories after stories have been told – whether concocted or true – about allegedly selective prosecution.

In our work on the MACC, we encountered many of these allegations. Critics target the MACC even when the agency has done its job to investigate, without realising that prosecution powers lie with the Attorney-General and not the MACC.

And among those who do know that prosecution is the discretion of the Attorney-General, a perception has developed that some people are always safe from prosecution, because they feel the Attorney-General has a conflict of interest. How can he be expected to prosecute the very people he is supposed to advise?

The fusion of the Attorney-General’s roles – as legal adviser to the Government and as public prosecutor – has resulted in decreased trust in the integrity of the system.

In cases that involve the Government, the public may not have full confidence in his decisions regardless of whether or not he is being independent and honest. And this time, it may result in a never-ending misery for the Prime Minister even if he is a victim of political sabotage.

I fully appreciate that the Prime Minister and the Attorney-General have thousands of other things to worry about at this moment in time. But for their own sake, this is a most urgent issue. The credibility of the Prime Minister is at stake here.

The roles of the Attorney-General must be separated. The Attorney-General should continue to advise the Government but we should create a new Public Prosecutor’s Office to decide on prosecution after the investigative agencies have done their jobs. This has to be done as soon as possible.

I appreciate that this is a major step. It requires a constitutional amendment because Article 145(3) of our Federal Constitution currently provides that the Attorney-General has absolute power to institute, conduct or discontinue any proceedings for an offence.

Additionally, the Criminal Procedures Code too will need to be amended because it currently says: “The Attorney-General shall be the Public Prosecutor and shall have the control and direction of all criminal prosecutions under this Code”.

The changes should be debated in this parliamentary meeting. If this is not done now, will anyone be able to save the Prime Minister’s credibility, regardless of what the investigation team finds?

Wan Saiful Wan Jan is chief executive of the Institute for Democracy and Economic Affairs ( www.ideas.org.my). The views expressed here are entirely the writer’s own.

By Wan Saiful Wan Jan thinking liberally

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Monday, July 6, 2015

Sue or don't sue WSJ's report: RM2.6bil was moved to PM Najib Tun Razak's bank accounts?


KUALA LUMPUR, Malaysia—Malaysian investigators scrutinizing a controversial government investment fund have traced nearly $700 million of deposits into what they believe are the personal bank accounts of Malaysia’s prime minister, Najib Razak, according to documents from a government probe.

The investigation documents mark the first time Mr. Najib has been directly connected to the probes into state investment fund 1Malaysia Development Bhd., or 1MDB.

Mr. Najib, who founded 1MDB and heads its board of advisors, has been under growing political pressure over the fund, which amassed $11 billion in debt it is struggling to repay.

The government probe documents what investigators believe to be the movement of cash among government agencies, banks and companies linked to 1MDB before it ended up in Mr. Najib’s personal accounts. Documents reviewed by The Wall Street Journal include bank transfer forms and flow charts put together by government investigators that reflect their understanding of the path of the cash.

The original source of the money is unclear and the government investigation doesn’t detail what happened to the money that went into Mr. Najib’s personal accounts.

“The prime minister has not taken any funds for personal use,” said a Malaysian government spokesman. “The prime minister’s political opponents, unwilling to accept his record or the facts, continue to try to undermine him with baseless smears and rumours for pure political gain.”


Mr. Najib has previously denied wrongdoing in relation to 1MDB and has urged critics to wait for the conclusion of four official investigations that are ongoing into 1MDB’s activities.

Investigators have identified five separate deposits into Mr. Najib’s accounts that came from two sources, according to the documents viewed by the Journal.

By far the largest transactions were two deposits of $620 million and $61 million in March 2013, during a heated election campaign in Malaysia, the documents show. The cash came from a company registered in the British Virgin Islands via a Swiss bank owned by an Abu Dhabi state fund. The fund, International Petroleum Investment Co., or IPIC, has guaranteed billions of dollars of 1MDB’s bonds and in May injected $1 billion in capital into the fund to help meet looming debt repayments. A spokeswoman for IPIC couldn’t be reached for comment. The British Virgin Islands company, Tanore Finance Corp., couldn’t be reached.

Another set of transfers, totaling 42 million ringgit ($11.1 million), originated within the Malaysian government, according to the investigation. Investigators believe the money came from an entity known as SRC International Sdn. Bhd., an energy company that originally was controlled by 1MDB but was transferred to the Finance Ministry in 2012. Mr. Najib is also the finance minister.

The money moved through another company owned by SRC International and then to a company that works exclusively for 1MDB, and finally to Mr. Najib’s personal accounts in three separate deposits, the government documents show.

Nik Faisal Ariff Kamil, a director of SRC International, declined to comment. Mr. Kamil had power of attorney over Mr. Najib’s accounts, according to documents that were part of the government investigation.

A 1MDB spokesman said, referring to the transfers into Mr. Najib’s account: “1MDB is not aware of any such transactions, nor has it seen any documents to this effect.” The spokesman cautioned that doctored documents have been used in the past to discredit 1MDB and the government.

For months, concerns about 1MDB’s debt and lack of transparency have dominated political discussion in Malaysia, a close ally of the U.S. and a counterweight to China in Southeast Asia.

When he founded 1MDB in 2009, Mr. Najib promised it would kick-start new industries and turn Kuala Lumpur into a global financial center. Instead, the fund bought power plants overseas and invested in energy joint ventures that failed to get off the ground. The fund this year has rescheduled debt payments.

The Journal last month detailed how 1MDB had been used to indirectly help Mr. Najib’s election campaign in 2013. The fund appeared to overpay for a power plant from a Malaysian company. The company then donated money to a Najib-linked charity that made donations, including to local schools, which Mr. Najib was able to tout as he campaigned.

“We only acquire assets when we are convinced that they represent long-term value, and to suggest that any of our acquisitions were driven by political considerations is simply false,” 1MDB said last month.

The four probes into 1MDB are being conducted by the nation’s central bank, a parliamentary committee, the auditor general and police. A spokeswoman for Bank Negara Malaysia, the central bank, declined to comment. Malaysia’s police chief and a member of the parliamentary committee also had no comment. The auditor general said this week it had completed an interim report on 1MDB’s accounts and would hand it to the parliament on July 9.

The prime minister is facing increasing pressure over 1MDB. The country’s longest-serving prime minister, Mahathir Mohamad, who left office in 2003, publicly has urged Mr. Najib to resign.

This week, Malaysia’s home minister threatened to withdraw publishing licenses from a local media group, citing what he said were inaccurate reports on 1MDB.

The $11.1 million of transfers to Mr. Najib’s bank account occurred at the end of 2014 and the beginning of 2015, according to the government investigation. Among the companies that investigators say it passed through was Ihsan Perdana Sdn. Bhd., which provides corporate social responsibility programs for 1MDB’s charitable foundation, according to company registration documents. Attempts to reach the managing director of Ihsan Perdana weren’t successful.

Documents tied to the transfer said its purpose was for “CSR,” or corporate social responsibility, programs. The Wall Street Journal examination of the use of funds tied to 1MDB for Mr. Najib’s election campaign showed that the money was slated to be used for corporate social responsibility programs as well.

The government probe documents detail how investigators believe SRC International transferred 40 million ringgit on Dec. 24 last year to a wholly owned subsidiary. This company on the same day wired the money to Ihsan Perdana, according to the documents. Two days after receiving the money, Ihsan Perdana wired 27 million ringgit and five million ringgit in two separate transfers to two different bank accounts owned by Mr. Najib, the government documents show.

In February, 10 million ringgit entered the prime minister’s account, also from SRC International via Ihsan Perdana, the documents show.

The remittance documents don’t name Mr. Najib as the beneficiary but detail account numbers at a branch of AmIslamic Bank Bhd. in Kuala Lumpur. Two flow charts from the government investigation name the owner of these accounts as “Dato’ Sri Mohd Najib Bin Hj Abd Razak,” the prime minister’s official name. A spokesman for AmIslamic Bank declined to comment.

In another transaction, Tanore Finance, the British Virgin Islands-based company, transferred $681 million in two tranches to a different account at another Kuala Lumpur branch of AmIslamic Bank. The government probe said the account was owned by Mr. Najib, according to the documents.

The transfers came from an account held by Tanore Finance at a Singapore branch of Falcon Private Bank, a Swiss bank which is owned by IPIC, the Abu Dhabi fund, according to the documents. A spokesman for Falcon Private Bank declined to comment.

The $681 million was transferred to Mr. Najib’s accounts on March 21 and March 25, 2013, the government documents show.

By Tom Wright at tom.wright@wsj.com and Simon Clark at simon.clark@wsj.com

Attorney General says task force uncovered documents during probe of investment fund 1MDB

KUALA LUMPUR, Malaysia—Malaysia’s attorney general said an official investigation into a troubled state investment fund has uncovered documents related to allegations that money was transferred into the personal bank accounts of Prime Minister Najib Razak.

A task force comprising the central bank, the national police and the nation’s anticorruption agency uncovered the documents during a probe of 1Malaysia Development Bhd., or 1MDB, Abdul Gani Patail, the attorney general, said Saturday.

Mr. Abdul Gani said that on Friday the task force had raided the offices of three Malaysian companies linked to 1MDB that allegedly were involved in the transfer of funds to Mr. Najib’s accounts.

“I confirm that I have received documents from the special task force related to 1MDB, including documents related to the allegations of channeling of funds to accounts owned by Prime Minister Najib Tun Razak,” Mr. Abdul Gani said.

The Wall Street Journal reported on Friday that Malaysian government investigators looking into 1MDB’s activities had traced almost $700 million in deposits into what they believe are Mr. Najib’s personal accounts. The investigation documents, reviewed by the Journal, didn’t provide the original source of the money or what happened to the cash after it allegedly entered Mr. Najib’s accounts.

Mr. Najib on Friday said the allegations were an attempt by his political adversaries to smear his name. His office declined to comment on specific allegations referring to the alleged money transfers.

The government investigation, reported first by the Journal, marks the first time Mr. Najib has been directly connected to probes into 1MDB, which owes over $11 billion to banks and bondholders. A person familiar with the government investigation said the documents had been given to the attorney general several weeks ago.

In response to the Journal report, Deputy Prime Minister Muhyiddin Yassin said on Saturday that authorities must investigate the allegations made against Mr. Najib, in a statement given to local media.

“These allegations are serious because they can affect the credibility and integrity of Najib as PM and the leader of the government,” said Mr. Muhyiddin, who is from Mr. Najib’s ruling party.

The raids of the three companies netted documents which will be examined as the investigations continue, Mr. Abdul Gani said.

The Journal reported how government investigators had traced the movement of a total $11.1 million from a unit of the country’s finance ministry through a subsidiary of the unit to a third company, which carries out corporate social responsibility work, exclusively for 1MDB. According to the government investigators, the money then went into Mr. Najib’s accounts.

SRC International is the unit of the Finance Ministry, which also is headed by Mr. Najib. The company originally was part of 1MDB but was transferred to the Finance Ministry in 2012.

1MDB has denied any involvement in transferring money to Mr. Najib’s accounts. The corporate social responsibility company, Ihsan Perdana, said to local media Friday that the firm didn’t send any money to the prime minister’s accounts. Attempts to reach the three companies weren’t successful.

By far, the largest alleged transfers into Mr. Najib’s accounts were two deposits of $620 million and $61 million in March 2013, during a heated election campaign in Malaysia, the government investigation documents show. The cash came from a company registered in the British Virgin Islands via a Swiss bank owned by an Abu Dhabi state fund according to documents obtained by investigators.

The fund, International Petroleum Investment Co., or IPIC, has guaranteed billions of dollars of 1MDB’s bonds and in May injected $1 billion in capital into the fund to help meet looming debt repayments. A spokeswoman for IPIC couldn’t be reached for comment. The British Virgin Islands company, Tanore Finance Corp., couldn’t be reached.

Mr. Najib set up 1MDB in 2009 to develop new industries. But the fund’s overseas energy ventures have failed to take off and it has been forced to reschedule debt repayments. Critics, including opposition politicians and some members of the ruling party, are worried about its heavy borrowings and lack of transparency.

The Journal last month reported how 1MDB indirectly had supported Mr. Najib’s election campaign in 2013. The fund appeared to pay an inflated price for a power asset from a Malaysian company, according to financial statements. That firm then contributed millions of dollars to a Najib-led charity that spent on schools and other projects that Mr. Najib was able to tout as he campaigned.

“We only acquire assets when we are convinced that they represent long-term value, and to suggest that any of our acquisitions were driven by political considerations is simply false,” 1MDB said last month.

A number of agencies are probing 1MDB. They include the national police, the auditor general, a parliamentary committee and the central bank. The attorney general didn’t say whether his office would launch its own investigation. The auditor general last week completed its probe into 1MDB’s finances, and plans to hand its report to Parliament on Thursday.

By Tom Wright And Celine Fernandez The Wall Street

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Saturday, July 4, 2015

Asian voice carries greater weight now


Select head: Jin Liqun is the president-designate of the AIIB. – EPA pic >>

CHINA’S setting up of the AIIB (Asian Infrastructure Investment Bank) is a most significant event in contemporary history.

It represents another shift eastwards in the global balance of power, particularly from the US to China. However, other Asian – particularly Asean – countries have also to reflect on what it means to them.

The US AIIB dilemma is a useful point over which to ponder. It has very little to do with transparency, governance and environment. It has to do with the power equation with China. Predominance and control.

Clearly the US is struggling to come to terms with China’s rise. This is not to say America opposes it, but it is a hard thing for the US to swallow, to play second fiddle. And the AIIB is the first big test of that adjustment.

With the launch of the AIIB, China has also shown how it can make good things happen with support not just from Asia, but also beyond. It is becoming a global power with considerable reach and influence.

Controlling about 30% of the capital of the AIIB China, as the promoter, has shown itself as a leader that can control the future of other countries. How Beijing exercises that leadership remains to be seen, but insofar as member state expectations are concerned, they see Asian countries for the first time in living memory controlling an international institution of considerable weight - and with it their economic prospects.

To sustain Asian economic growth trajectory, US$8 trillion of national infrastructure development is needed up to 2020, not counting US$290bil in regional connectivity infrastructure. Indonesia alone needs US$230bil, Myanmar US$80bil. With the potential of the US$100bil AIIB, plus the US$40bil Silk Road Fund for “One Belt One Road”, there is for the first time some good hope of meeting this need.

The US, in its difficult adjustment, points to potential future problems rather than the promise of the AIIB. How “lean, clean and green” will the AIIB be? As if the US dominated Bretton Woods institutions have been pristine, but that does not mean it is a question that should not be asked about AIIB.

So, as the Asian countries get in line, eyes glued on the lolly, they should not hold back from asking questions and seeking answers on how the AIIB is going to operate.

Another issue raised primarily by the Americans is over procurement and personnel appointments. Again, as if the IMF, World Bank and ADB did not come with strings attached by largely senior Caucasian officials from the institutions. But, having suffered from such suppression in the past, Asian countries should want to know what the future holds with the AIIB on procurement and personnel.

With the AIIB headquartered in Beijing and China putting up most of the money, it is only to be expected there will be a Chinese bias on both scores. The president-designate Jin Liqun, however, is suave and affable, better than some of the boorish heads past and present of the Bretton Woods institutions. Nevertheless, it is not undignified to ask about other appointments and their distribution. This horse-trading occurs at international level.

On procurement, Chinese companies are already assuming they will have first-mover advantage contractual right – but this does not necessarily reflect what the Chinese government thinks or mean that the AIIB will be biased for them.

Indeed, Chinese Prime Minister Li Keqiang during his visit to France this week admitted China lacked advanced technologies and looked forward to “form joint ventures or cooperatives” with the developed world. This was stated on the occasion of a historic deal with France to carry out joint projects in Asian and African countries.

And it follows a considerable period during which China was intent on muscling out developed countries in its economic expansion to African and some Asian countries.

Thus, China’s tendency of blowing hot and cold has been a problem in gauging Beijing objectives and mode of operation.

A former US ambassador to the ADB recently related how the poorest Pacific countries failed to receive Chinese support at board level for projects as they had recognised Taiwan. Again, not that the US was ever reticent about such political power play.

Still, it would not be remiss to ask how far China would penalise countries on the wrong political wave-length, even if it would be too much to expect Beijing to support a state opposed to and in conflict with it.

How would the Philippines and Vietnam score in the AIIB on the Chinese political barometer given their adversarial position in the South China Sea dispute? Indeed, the other claimant states, such as Malaysia and Brunei. Of course, if they are willing to become vassals of the Chinese state in return for largesse, it is entirely up to them. But it is not to be expected the proud sovereign states of South-East Asia would stoop to this, but who knows.

In the AIIB, Asean states will each have a very small stake, even if Indonesia might be among the top ten shareholders. Together they might represent something a little more significant. Would they then not want to develop a common position in areas of infrastructure and connectivity development that would be of shared benefit?

Asean leaders do not seem to discuss strategic issues such as, now, the meaning and significance of the AIIB to future regional order. Generalised, but not inaccurate, assertions are made about its good in terms of infrastructure and economic development. But there is more to it than that.

When they meet, Asean leaders follow a well-scripted agenda that does not include a free flow of discussion. Foreign ministries often are hell-bent on avoiding this, because they think strategy and state secrets must at all cost be protected. They should give the leaders greater credit than assumed stupidity. These discussions must take place beyond other broad issues, such as the Middle East etc, or immediate issues, such as refugees and migrants.

Strategic issues are so critical to Asean’s future place in the regional order. Deficient discussion, or avoidance of it altogether, erodes Asean role in the evolving system. More time must be set aside at Asean summits for discussion on these issues.

The economic ministries too must not just look at issues and targets one by one and in a rush without presenting the bigger picture. There is great strategic content in the minutiae which is hardly highlighted or discoursed.

If Asean meetings and summits go on like this, community or no community, the region will miss the wood for the trees.

Comment by Munir Majid The Star/Asian News Network

Tan Sri Munir Majid, chairman of Bank Muamalat and visiting senior fellow at LSE Ideas (Centre for International Affairs, Diplomacy and Strategy), is also chairman of CIMB Asean Research Institute.


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Wednesday, July 1, 2015

The center of world economic gravity moving east as AIIB shows

Chinese President Xi Jinping (C, front) poses for a group photo with the delegates attending the signing ceremony for the Articles of Agreement of the Asian Infrastructure Investment Bank (AIIB) at the Great Hall of the People in Beijing June 29, 2015. [Photo/Agencies]


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Financial leaders of 57 states gathered in Beijing on June 29 to sign the agreement for establishing the Asian Infrastructure Investment Bank (AIIB), expected to become the region’s largest investment bank in the 21st century.

Seventy years ago, the World Bank was established, led by the US and its close western economic and political allies, as the first global financial institution. Along with the World Trade Organization and the International Monetary Fund, the western powers have commanded world financial and trade order for more than half a century. Even the Asian Development Bank (ADB), established 20 years later after the World Bank, has been largely controlled by Japan, backed by the US and other western economic powers.

China benefited from the global and regional development and financial institutions in the initial stage of economic reform and openness. As China expanded its economic strength it has aggressively contributed to financing them. However, despite its financial contribution to these institutions rising significantly China still has limited influence over management and operation.

China’s desire to influence world financial order and its inability to do so have been due to the governance structure of these institutions where China is not only a minority shareholder but its voting rights are marginalized.

Since the world financial crisis, triggered by the US subprime mortgage crisis and the EU’s debt problem, China’s relative importance in the world economy has risen rapidly. By 2010, it surpassed Japan to become the world’s second largest economy, and by 2012 it overtook the US to become the world largest trading nation as well as the largest producer and consumer of motor vehicles.

Apart from China’s second-to-none manufacturing capability, it holds the world’s largest foreign exchange reserves which have to be used effectively so they can generate a financial return and make appropriate contributions to infrastructural development in Asia, the largest and fastest growing region among all continents.

In addition, China, India, Russia and other initial AIIB member states have the financial strength and managerial confidence to create a new financial institution similar to the World Bank and ADB. For the initial $100 billion fund to be pledged, China has agreed to contribute 29.7 percent, India 8.3 percent, Russia 6.5 percent, Germany 4.4 percent and South Korea 3.75 percent. Other major contributors include the UK, Australia and Indonesia.

Both the US and Japan have not expressed their intention to join AIIB although many US political and economic allies have come to Beijing to sign the agreement, particularly the UK, Germany, France, Italy and Australia. The diversion of these countries' attention away from the US to China and Asia not only reflects ever rising business opportunities in Asia, but also the relative decline of the US-led western influence on the global economy and financial order.

The apparent shift of economic gravity from the West to the East reminds me of my personal experience in the past. Thirty year ago, I was awarded a World Bank scholarship from a university in Hainan to study in the UK in 1985. At that time, the salary of a Chinese university lecturer was less than 1 percent of his UK counterpart. Today, all the top Chinese universities are able to pay significantly more than the equivalent UK or US salaries to attract overseas talents to work in China. In addition, numerous university teachers in China can easily apply for more research funding than their western counterparts.

Although China is still a developing economy by definition, it has exceeded many western powers in a number of areas such as equipment manufacturing, high-speed railways, nuclear power, construction, infrastructure engineering and space technology. In 2014, Chinese scientists produced the second largest number of high-impact academic journal papers in the world.

China started the first high speed railway 30 years later than Europe, but by 2014, has built 16,000 km of high-speed tracks, twice as long as the total length of all the EU countries put together. BYD, one of China’s private auto makers, has marched to California to build electric buses for the local market.

India is racing to follow in China’s footsteps. Its economy was growing as fast as China in 2014 and is set to overtake China’s growth in 2015. However, India’s transportation systems are so poor that they are evident constraints on the country’s development. It is expected that India will require $1 trillion to improve its transportation systems, and the establishment of AIIB will be helpful to its development needs. Other Asian countries face similar problems of investment for roads, railways, airports, seaports, telecommunications and internet.

AIIB will become a potent propeller to accelerate economic and social development in Asia. Along with the Silk Road Fund and the Brics Bank, China will use AIIB to implement its “one- belt and one-road” regional and global development strategies.

The Silk Road Economic Belt and the 21st Century Sea Silk Road will cover more than 60 countries surrounding China, and many will benefit from China’s outward-looking investment and development strategies. Under Xi Jinping’s leadership, China has gained increased support from neighbouring countries in Asia and many others in Latin America, Europe and Africa, thanks to its persistent foreign policy of peaceful cooperation, mutual benefit and common prosperity.

The future operation of the AIIB may face many challenges and uncertainty, but the AIIB has signified the rapid emergence of China, India and other developing and transitional economies. The determination and confidence for success through the AIIB and other newly created financial institutions suggest that the world financial and political order will be different from now, as the overwhelming dominance of the World Bank and ADB in Asia and the world financial systems will inevitably decline in the future.

By Shujie Yao (chinadaily

The author is a professor of economics, Chongqing University and the University of Nottingham.

Through AIIB, China can learn to lead


Representatives of 57 prospective founding members of the Asian Infrastructure Investment Bank (AIIB) gathered in Beijing on Monday for the signing ceremony, with 50 of them endorsing the AIIB agreement. As the largest shareholder, China takes a 30.34 percent stake and correspondingly has a voting share of 26.06 percent, which actually enables China to wield a veto on major issues, such as electing the bank's president. This is a moment that our nation could never have imagined just 10 years ago.

The move forward in the AIIB, however, seemed to have no bearing on people's feeble confidence in China's stock market, as shares plunged amid a flurry of automatic sell orders on this remarkable day.

However, the country's fundamental confidence has been elevated to a new stage. This is the first time ever that China is leading an international multilateral bank. Its influence is prominent and far-reaching, and it carries more profound significance than successfully hosting an Olympic Games.

It took China less than six months to complete the signing of the AIIB agreement and this efficiency shocked the world. Although China barely has any experience in this regard, it is proof of its excellent capacity to learn and of its eager pursuit of fairness and equity. The first batch of 50 signatories is far more than the number of founding members of the Asian Development Bank (ADB).

China's attempt to lead the international financial institution may have been forced by unfair treatment in other institutions or China may want to test experiences with the AIIB as we are still a developing country. But from now on, we must shoulder our responsibilities.

Of these responsibilities, the foremost is to bear criticism as numerous Western observers are waiting to find faults with and go bearish about China. But regardless of what they say, China must stick to its current trajectory.

In recent years there have been fewer protests by China, but frequent ones against Beijing overseas. China needs to stick to its major principles, but it does not need to be entangled in minor issues.

US allies that have joined the AIIB do not mean to flatter China, but they see the benefits will outweigh their relations with Washington. With GDP at the $10-trillion level, can China build more platforms of common interest and convince the outside world that working with China always means a win? This serves as the key to China's further rise without encountering strong resistance from the outside.

Compared with the IMF, World Bank and the ADB, the AIIB indicates that the environment where China is rising may not be as terrible as we conceive. We must grasp the opportunities.

Source: Global Times Editorial

50 nations sign AIIB deals - China wields veto powers, enjoys 26% voting rights

China's role as the largest shareholder with significant voting rights in the Asian Infrastructure Investment Bank (AIIB) will make the country shoulder more responsibility in turning the bank into a high-quality financial institution to complement existing multilateral development banks, experts said Monday.

A total of 50 prospective founding members of the AIIB on Monday signed the bank's articles of agreement (AOA) in Beijing, which outlines the bank's objectives, operating principles, governance structure and decision-making mechanisms.

Seven members, including Denmark, Thailand and the Philippines, failed to sign the AOA on Monday. China's Ministry of Finance said they can sign the agreement anytime this year.

"The signing of the AOA is a milestone in the establishment of the bank," Vice Minister of Finance Zhu Guangyao told the Global Times Monday on the sidelines of a forum in Beijing.

The bank was proposed by President Xi Jinping in 2013 during his visit to Indonesia.

Xi said on Monday that China's development would not have been possible without Asia and the world.

"As China grows stronger, we are willing to make our due contribution to world development," he said.

Zhu said the AIIB's establishment process has outpaced other multilateral development banks, and its objectives have won support from members within and outside Asia.

"We hope AIIB members' legislatures will approve their AOA membership as soon as possible and get the bank's operations going by the end of the year," he added.

Voting shares

The AIIB will have an authorized capital of $100 billion, and Asian members are required to contribute up to 75 percent of the total capital, leaving the rest to non-Asian members, according to the AOA.

China is the bank's largest shareholder with a 30.34 percent stake. This gives China 26.06 percent of the voting shares, also the largest, within the multilateral financial institution.

"It is within expectations given China's huge economy, and it also means China needs to shoulder more responsibility in building the AIIB into a high-quality bank," Ruan Zongze, vice president of the China Institute of International Studies, told the Global Times Monday.

According to the AOA decision-making mechanism, China has effective veto powers over major decisions because it has voting shares of over 25 percent.

China does not seek veto powers in the AIIB, Vice Finance Minister Shi Yaobin told the Xinhua News Agency Monday. He said the country's stake and voting shares in the initial stage are natural results of current rules, and may be diluted as more members join.

"Being a major Asian economy, Japan's entry will dilute China's stake and voting shares more than any other country, but so far we have not seen such a sign," Ruan said.

He said he believes the AIIB is not likely to approve a large number of new members in its initial stage. Instead, it will focus on rolling out investment projects.

Owning veto powers does not mean that China will use these powers in AIIB's future operation, Jia Qingguo, dean of the School of International Studies at Peking University, told the Global Times Monday.

Jia said China might use the powers only if the projects would seriously hurt China's interests or are not in keeping with the bank's objectives, adding that the possibility for such conditions is low.

After the signing of the AOA, the bank's senior management will be appointed before it starts operations.

The bank's headquarters will be located in Beijing, and its president will be selected through an open, transparent and merit-based process, according to the AOA.

The AIIB's future investments will focus on Asian infrastructure projects in the energy, power, transport and agricultural sectors that also meet environmentally friendly and energy-saving standards, Jin Liqun, secretary-general of the AIIB's interim multilateral secretariat, said at a forum held in Beijing over the weekend.

The Asian Development Bank said it believes Asia would need infrastructure investments worth over $8 trillion between 2010 and 2020.

"The AIIB will complement existing multilateral development banks to promote sustained and stable growth in Asia," Zhu said.

World Bank President Jim Yong Kim welcomed the signing of the AOA.

"More funding for infrastructure will help the poor, and we are pleased to be working with China and others to help the AIIB hit the ground running," he said in a statement on Monday.

- Song Shengxia contributed to this story

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Every single U.S. ally with the exception of Japan have all hopped on board the Asian Infrastructure Investment Bank, or AIIB. Italy and France were approved on Thursday to become founding members, bringing the total ...
27 Oct 2014
Chinese President Xi Jinping's (C-R) meeting with the members of the Asian Infrastructure Investment Bank (AIIB) in the Great Hall of the People in Beijing, China 24 October 2014. 21 Asian countries are the founding ...

Sunday, June 28, 2015

Service first, don't waste energy and resources in unproductive ways !

A photo taken from Facebook showing what the woman wore when she was denied entry to the Balik Pulau court complex.

The mission: service first

Malaysian taxpayers should be treated as customers who deserve the best service. Government departments should aim to keep their standards high and not fuss over how their customers are dressed.

TEACHERS are supposed to teach. And when members of the public visit the hospital, the Road Transport Department, or any government facility for that matter, they are there for a service, and they expect to be given that.

After all, as has been said many times before, the public service exists because the taxpayers are the ones who pay the salaries of the civil servants.

But things do become complicated when some individuals get side-tracked from their job specifications, and start to bring politics and religion into play.

The problem with some Malaysians is that we are also not very good at exercising reasonable discretion. Maybe we fear those who hold higher positions and dare not question their authority, as it is not part of our culture, or simply because of fear of reprisals.

So, if you are a security guard, whether a member of the People’s Volunteer Corp (Rela) or someone from a security firm, you would be expected to just carry out the orders made by the boss, or maybe the smaller bosses, which in most cases, can be more difficult than the real top boss.

Malaysians would know by now, judging from incidents in the past weeks, that it’s always these little guys who get the blame.

If you are being asked to wear a sarong over your skirt which is deemed too short, you will look quite unnatural, and are bound to draw strange looks from others. Wouldn’t the front desk officer enquire from you, in a puzzled manner, why you are wearing a skirt with a sarong on?

But if the officers are indifferent to the ­situation and the head of the front desk does not even bat an eyelid, it is obvious that they are fully aware of what the security guard has ordered the member of the public to do.

Maybe this has been going on for a while, except that no one has complained, and a recording of the event had not gone viral.

Since incidents of such a “humiliating” exercise have been reported, many others, including a former colleague, have shared their experiences on social media.

My ex-colleague took her case all the way up to the JPJ chief, who apologised for the unfortunate incident. But in her case, she has access to the boss because of her job.

I have been following the exchange of opinions on social media and, by now, we are well aware that we are also not very good at articulating or advocating our case well. Many of these views seem racially and religiously prejudiced and, as a result, a sense of reasonableness is lost.

Dress codes are not something unusual. Even casinos, as some have pointed out, have strict dressing codes before anyone can enter. But the question here is how these rules are reasonably enforced in our government departments?

In all fairness, checks by our reporters have shown that most government departments are reasonable and seem to totally ignore even their own dress codes. Their priority is to provide service and the people are served even if the skirt’s hemline is above the knee or they are wearing slippers.

We actually have photographs of inadequate­ly dressed men, including one in a pair of shorts and singlet, rushing into a JPJ office and were properly served.

As with all debate, there are those who argue whether micro mini-skirts and bikinis would be tolerated, which I think is stretching the argument too far. Anyone who wants to dress that way in public, not just in a govern­ment facility, will most likely be hauled up.

No sane person would go to any office, private or public, in a bikini, so such arguments are flawed and unreasonable.

The recent cases whereby the women were asked to wear the sarongs are certainly not in this category. Anyone with a fair and objective mind would surely agree that all the ladies were properly and decently dressed.

Then, there have been a number of cases brought to light recently of teachers who want to play moral guardians in schools.

One incident was when a teacher reportedly confiscated the little crucifix that a student was wearing. A police report was subsequently lodged.

But according to the latest report, the cross has since been returned to the student and the father has accepted an apology from the school principal and also withdrawn the report.

It has also been reported that pressure was exerted on the headmaster and school management board of St Mary Labuk in Sandakan to remove the cross from the new school building. But Deputy Education Minister Datuk Mary Yap stepped in and guaranteed that the cross would remain, saying it had been clearly stated that mission schools are allowed to upkeep the ethos and characteristics of these schools.

It seems to be a phenomenon of the past decade. We all know the crucifix has long been removed from classrooms in mission schools, because of an order from the then minister who is now in the opposition.

About the same time, the symbol of the crucifix was also taken out of mission school badges. The Latin mottos fortunately have remained and presumably no one understands what they mean.

Well, Malaysia’s problem, or rather the Little Napoleons’ problem, is that we seem to channel our energy in a very unproductive way. There is a lot of fire-fighting because these people think they can get away with anything, and only when it becomes an issue do they step back.

Teachers should be striving to make our students top in Maths and Science and be competent in the English language. Instead, in these core areas of education, we have continued to deteriorate further.

Our students are no longer gaining entry into Ivy League schools such as Harvard as we used to. Schools used to be able to boast of these achievements but these days, many of them get into the news for all the wrong reasons.

Even if we seem to be generating many students with a string of As in the public examinations, these premier universities are not that easily impressed.

Meanwhile, no one will deny that our government-run hospitals are providing good service to the people. We must commend our doctors and nurses who toil daily for the public, at wages that are far less to what their counterparts in the private hospitals can command.

But the people who run these hospitals must also focus on keeping the standards high, and even raise the bench mark. The least of their concerns should be to worry about how visitors are dressed.

Just like at the JPJ, surely worrying about the dressing of the public is not part of the JPJ mission statement.

Malaysian taxpayers should be treated as customers who deserve the best service. They should not be sent home, denied entry or asked to wear a sarong, simply because someone takes offence to how they dress.

Moderates, stand up

Before and after: Photos posted on Tan’s Facebook page showing her original attire (left) and the sarong she was asked to wear at the JPJ office.Before and after: Photos posted on Tan’s Facebook page showing her original attire (left) and the sarong she was asked to wear at the JPJ office.

IT is said that ignorance is bliss, but not necessarily so all the time. Most Malaysians must have been amused, rather than upset, over a recent Facebook posting that went viral and eventually caught the attention of a news portal.

It started with an angry customer, going by the name Mista Bob Faishah, posting on the Texas Chicken Malaysia Facebook page that the fast food chain obviously did not take into account religious sensitivities because the franchise’s brand dipping sauce is named “Church”.

“Dear TCM... Please do explain (yo)ur dipping sauce brand at Malaysia Franchises... Most of (yo)ur customers is a Muslim... AND Muslim didn’t not eat for food from ‘church’ brand,” he wrote. He also shared the image of said dipping sauce together with his post, the portal reported.

Soon, an equally outraged Facebook user, Halim Zainal, left a comment saying that Texas Chicken Malaysia should change the name on the packet as a sign of respect to its Muslim customers.

The angry person warned TCM that they would not be able to sustain their business if they were not sensitive to Muslims in the country.

The management of TCM had to patiently explain to the customer that the franchise’s “Church” brand dipping sauce was named after the founder and did not represent the Christian house of worship.

“Please be informed that the brand Texas Chicken was founded in San Antonio, Texas USA by our founder by the name of George W Church Sr — Church being his surname and the name of the brand Church’s Chicken.”

The Facebook post elaborated that the word “church” was not used in a religious context and that some of the dipping sauces were imported from the United States, where the food chain originates.

But it has ended well. The customer has now posted an apologetic comment: “Deepest from my heart that I want to ask apologized for my post (1 June). For that time I only want to inquiry regarding the brands of “church” brand. And after TCM do explain to my inquiry n I accepted that was the co brand from san Antonio, Texas.

“I hope with my apologized here can stop all the negtive things goes more bigger. That what can say I only just want to inquiry regarding that brands only..But for ur info, I stlll enjoy my meal with my favorite winglets from TCM!

“Once again..I’m apologized for my post before that I had removed because I don’t want that all people read n negtive thingking of my inquiries.”

Well, as we can see from the postings, the person’s command of the English language really leaves much to be desired.

That could have been one reason why he did not first check, via Google or other search engines, for information about this food chain and why its products are named as such.

Our English language proficiency, sad to say, has hit rock bottom and many of our Internet users are missing out a lot because they have such a poor command of the universal language.

He only associated the word “church” with religion, without being aware that it can also be the surname of many people. Christian Bale would be really worried if people stop going to watch his movies if such an association is made.

But let us keep this in perspective. We can all accept Mista Bob Faishah for sportingly admitting his mistake. We are sure he has no intention to create a controversy.

But another issue that we need to be concerned about, apart from poor English, is whether we are seeing a rise in religious conservatism where many modern-day practices that everyone in our plural society used to accept as a matter of course – from food to sports and entertainment – are being looked at from a different, and more radical, perspective.

Those who spew hate messages in the name of religion can always find a ready audience in those who are prepared to take what they say without question.

And this applies to all religions where such leaders thrive on those who are blissfully ignorant on the true nature of their faith.

Such an environment makes it easy for these people to create fears among the followers that they are constantly under threat. The bogeymen in flavour today include Christians, Jews, the LGBT community, liberal-minded people, etc.

Fortunately, we are still a country where people of different faiths can co-exist peacefully and in harmony with one another.

Faith is a matter of the heart and whatever the rabble-rousers may want to ferment, few will believe that just seeing the religious symbols of another faith will so easily shake their own beliefs.

Be that as it may, we need to also be on guard against the rise of extremism, especially when it comes quietly in every day situations.

The voices of moderation must be heard, and the silent majority cannot afford to be quiet if they value the kind of society we live in.

Why are so many Malaysians not surprised to read about the middle-aged “aunty” who was asked to wear a sarong before she could be served at a Road Transport Department office? The Rela guard felt her skirt, which was just above her knees, was too short and did not adhere to the dress code.

It may be a small matter to some, but it was good of Suzanna G L Tan to share her experience on Facebook by posting a photograph of herself outside the office, showing her attire for the public to judge.

“I had to go to JPJ personally to sign the transfer form for the car I sold. That in itself is already a pain,” Tan wrote.

“I go dressed like this. Indecent meh?” she asked in reference to her dressing in the photograph.

Tan said while she was at the counter to get a queue number, she was handed a sarong to wear “or they would not entertain me”.

The blame eventually fell on the Rela guard but none of the other officers at the JPJ office bothered to tell off the Rela guard for his over-reaction. They have kept silent over this demeaning exercise.

We used to be able to blame the little Napoleans for incidents like this but with the advent of social media, such actions can always be recorded for the public to judge.

And then we have our Malaysian gymnast Farah Ann Abdul Hadi, who has just won a gold medal at the Sea Games, being criticised for not covering up. But to be fair, there were many who came to defend her on Buletin TV3’s Facebook.

Instead of applauding her flawless performance, there seem to be those with perverted minds whose minds are focused elsewhere.

These people thrive on attention and their antics have a way of being magnified way beyond their actual influence.

But here’s the saddest part. Those who speak out for Farah Ann are the usual known personalities and non-governmental organisations while those we wish to hear from – including politicians from both sides of the divide who hold national level posts – are strangely quiet.

But we are glad that the Youth and Sports Minister Khairy Jamaluddin, who has to protect our athletes, spoke out.

“In gymnastics, Farah wowed the judges and brought home gold. In her deeds only the Almighty judges her. Not you. Leave our athletes alone,” wrote Khairy on his Twitter account.

By Wong Chun Wai on the beat

Wong Chun Wai began his career as a journalist in Penang, and has served The Star for over 27 years in various capacities and roles. He is now the group's managing director/chief executive officer and formerly the group chief editor.

On The Beat made its debut on Feb 23 1997 and Chun Wai has penned the column weekly without a break, except for the occasional press holiday when the paper was not published. In May 2011, a compilation of selected articles of On The Beat was published as a book and launched in conjunction with his 50th birthday. Chun Wai also comments on current issues in The Star.


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