Mr.Najib, Is My Money Well Spent?

The Budget 2015 announced by Dato' Seri Najib recently, has received mixed reactions from the Malaysians. In fact, the recent budget also received criticism from the Malaysian economic experts such as Tan Sri Ramon Navaratnam. The most important question is, whether the budget is really people-friendly?

The 2015 Budget amounts to RM273.94 billion, an increase of RM9.74 billion compared to the previous year. And as in previous years, emolument or the civil servants' salaries, is the largest component of the budget in 2015 in which next year, the emolument is estimated at RM65.6 billion. This is a big increment, especially when compared to the year 2013 which only reached RM61 billion.

Does the increase in emoluments relevant, when in reality, the government is actively trying to control the government deficit?

Eliminate the post of the Special Envoy

If anyone asks me about a field that promises money for life, I will definitely recommend the person to join politics (related to the ruling party). Within last few years, Dato' Seri Najib has introduced the positions of "special envoy". Datuk Seri Samy Velu (former MIC president and “famed” for his eloquence in Malay language) has been made Special Envoy to South India for infrastructure. Datuk Seri Ong Ka Ting (former MCA president) as the Special Envoy to China and Datuk Seri Dr Jamaluddin Jarjis is the Special Envoy to the United States. Not forgetting, Dato' Seri Tiong King Sin has been appointed as Special Envoy to the East Asia. The Special Envoy post is an addition to the existing ambassador posts.

It is worth to be noted here that countries like India, China, United States and Japan have long had ambassadors and other diplomats from Malaysia's representing our country there.

Thus, the establishment of the office of the Special Envoy is seen as unimportant and just a waste of public money. However, Dato' Seri Najib is likely to deny this statement by saying the Special Envoys are appointed to bring in investment opportunities and other benefits. For example, Samy Velu has good relations with India since he brought many Malaysian companies to invest in India’s infrastructure-building during his tenure as the Minister of Public Works. In that sense, Samy Vellu is the perfect candidate to bring Malaysian capitalists to invest in the emerging India or that’s what Mr. Najib thinks.

For me, this idea is unreasonable. Yes, the success of Samy Velu helping Malaysian companies to venture in India must be taken into concern, but what is the current Minister of Works, Dato Fadhillah Yusuf doing? Could he not continue to bring Malaysian businesses to invest in infrastructure developments in foreign soil? If not, why should he be retained?

Likewise are with all the other Special Envoys. If the existing Ministers and the current ambassadors are doing what their tasked for properly, the office of the Special Envoy should by any sense, be irrelevant.

Many may be wondering why I am pushing for this position to be abolished. Before you call me an opposition “cyber trooper”, I should duly explain. This is due to the fact that a Special Envoy is paid up to RM27,000 as monthly salary. This is greater than the net salary of the Prime Minister! And perhaps, there may also be other benefits. Assuming the position of Special Envoy eliminated, the amount of civil service’s emoluments can definitely be reduced.

Eliminate the posts of Special Advisor to the Prime Minister's

Currently, there are four positions of Special Advisors; Datuk Seri Dr Abdullah Md Zin (Religious Advisor to the PM), Datuk Wira Mohd Johari Baharum (Special Advisor on Northern Corridor Economic Region), Tan Sri Dr Rais Yatim (Advisor on Social Affairs and Culture) and Datuk Seri Shahrizat Abdul Jalil (Advisor on Women’s Development and Entrepreneurship). They are also expected to be paid with a hefty sum monthly, which eventually will result in soaring final figure of emolument.

It is never my intention to question the credibility of these four individuals and spread fallacies, but is Datuk Seri Dr Abdullah Md Zin’s post really necessary since Dato 'Seri Jamil Khir is the minister responsible for Islamic affairs? Should Rais Yatim be appointed when Datuk Seri Nazri Aziz is in charge of the Ministry of Tourism and Culture? And most important of all, should Shahrizat Abdul Jalil be appointed as Advisor on the women’s development when the Dato Rohani Abdul Karim is responsible for the Ministry of Women, Family and Community Development? Was she appointed to the post just because  Dato Shahrizat is Wanita Umno chief, despite the fact that she has lost the election and was linked with the “Cow-gate” scandal?

Should civil servants' salaries be raised?

Yes, the government officials also need a pay raise, but any increment must be followed by improved quality and workmanship. But, is it happening in Malaysia’s public administration?

Public employees whom are not productive and are of poor quality are maintained in the government for fear of "losing votes". Several years ago, the Civil Service New Scheme (SBPA) was introduced and contained "Exit Policy", in which public employees will be evaluated every year and to those who scored less than 70% mark, will be sacked from the public service. However, the objection from CEUPACS (which later agreed with lower scores) and various other parties, SBPA has been replaced with the Transformative Remuneration Scheme which comes with no “exit policy”.

Malaysia currently has 1.4 million civil servants. For me, this is not so bloated compared to other countries because in Malaysia, army and police officials are also counted as public employees, unlike in other countries. However, we cannot and should not compromise with lacklustre performance of some civil servants and they need to be removed. Official statement shows that only 1.1% of civil servants scored less than 70% appraisal marks each year. If so, the "Exit Policy" should be re-introduced in a new form after discussion and explanation of all the parties involved. For this time, it is appropriate if a higher threshold mark of 75% -80% is set.

Conclusion

I personally agree with the rationalization of subsidies, but such attempt alone will not help the government to achieve or a balanced budget. My recommendation is Malaysia needs to reduce expenses in the payment of emoluments by putting the welfare of the people as the main intent, rather than to meet the "passions" of politics.

List PTPTN defaulters in CCRIS

Last year, many newspapers’ headlines revolved regarding Second Education Minister’s statement that errant PTPTN defaulters will be listed under Central Credit Reference Information System (CCRIS). This particular statement drew unexpected backlash from the masses and even from vocal ministers like YB Khairy Jamaluddin.

 

Yesterday, Education Minister II Idris Jusoh said Perbadanan Tabung Pendidikan Tinggi Nasional (PTPTN) loan defaulters from 1998 to 2010 recipients will be given three months to start repayment before being blacklisted in the Central Credit Reference Information System (CCRIS).Notwithstanding the fact that the idea of CCRIS listing does not bode well with the people, a bigger question arises. Is it a bad idea?

 

To the uninitiated, CCRIS is a Bank Negara-database system that stores financial records of Malaysians digitally for references by financial intermediaries in prospect of a new loan issuance. Each and every individual’s financial track that has taken a loan from any financial institution will be listed under CCRIS. And so far, it has become a “custom” for any finance provider to refer to the CCRIS system before sanctioning a new loan application. It has to be made clear that CCRIS is NOT a bankruptcy listing system. Only the Department of Insolvency can declare a person as a bankrupt.

So, will an individual with a bad financial track in CCRIS be given a loan in future? That depends on the financial providers’ discretion.

The insinuation of errant PTPTN loan takers to be listed under CCRIS is a good idea and should be welcomed. Such move will hopefully create awareness amongst the loan takers to repay their debt as per the contract. Commonly, these errant PTPTN defaulters will be warned by three (3) notices before any further actions are taken. Thus, defaulting in loan repayment should never be an option.

But, it has to be reminded that only CCRIS listing will not do much good. Why, it could even lead to more problems if appropriate reforms in PTPTN do not precede it. And here are my proposed reforms for a better PTPTN scheme.

11. Payment starts six (6) months after getting a job

Firstly, PTPTN which aims to be a helpful medium for higher education dreams of younger Malaysians should never be a “stumbling block” in crashing their future. For a better service, PTPTN should come up with a better repayment schedule. Currently, PTPTN loan takers are required to repay six months after graduation. Looking at the current pace of Malaysia’s higher education institutions churning out more graduates, more are likely to be unemployed for the first six months or even one year after graduation in some extreme cases. Hence, if current system resumes, more defaulters will emerge and more will be financially-hurt. Thus, in my opinion, it is best if the graduates are only required to repay their debt six months after landing in a job.

  2.Abolish the current 1% administrative cost under Ujrah scheme

Next, as PTPTN is a government-formed body for a special purpose. Thus, it is best that interest rates are done away with for the PTPTN loans. Although only 1% flat rate is imposed under a new plan, it can still be considered as an extra-burden for the loan-takers. It is understandable that PTPTN has management and operational costs but it is best for the government to absorb the costs to allow no-interest to be given for the loan takers. This is much better than providing free education and more future graduates will be financially stable in future, unperturbed by a huge debt.

It is my sincere opinion that the Government and PTPTN can look into this and hopefully, a better system in PTPTN is born for common good. Graduates are the national assets and let’s not destabilize by our own ineffective moves.

  3.Set a common threshold for loan conversion into scholarship

PTPTN has introduced a commendable plan prior to this, by allowing students achieving First Class degrees to convert their loans into scholarship. However, this has failed to be fully effective as in the current practice, the tertiary higher institutions have different threshold Cumulative Grade Point Average (CGPA) to indicate first class degree i.e UM – 3.75, UiTM – 3.50, it is discriminative in nature for the students in institutions with higher threshold.

Thus, taking that into concern, CGPA threshold for converting loan to scholarship should be standardised at 3.50 (for Arts stream subjects) and 3.30 (for Science stream subjects). If such move is to be introduced, a level-playing field can be better fostered.

  4. Mandatory payment only after a certain salary limit

Whilst it is commonly understood that one is bound to repay his or her loan as promised, the struggle of the current and upcoming graduates should be focused. With sky-rocketing cost of living coupled with slow increase in salary, the financial burden of a new graduate is of grave concern. It is noted that many, if not most graduates, can only expect starting salary of only around RM 2,000.

Thus it is proposed that PTPTN should allow the borrowers to repay only after their monthly salary hit RM 2,500. This is to ensure that the loan takers do not default and are in financially stable situation. The RM 2,500 threshold that I have proposed is created after taking into concern the examples I know. However, PTPTN is free to set other threshold ONLY after proper discussions with the stakeholders which MUST include the university students.

  5. Top-up PTPTN fund annually.

PTPTN’s highest-level administration often voice out that due to actions of defaulters, the fund amount is quickly shrinking and affecting future borrowers. This should have never happened. The unethical actions of defaulters (although some are financially troubled) should not be allowed at the expense of others.

Thus it is recommended that the Government should top-up the PTPTN fund every year to make sure all financially-vulnerable varsity students’ loan application be sanctioned. Critics may claim that such approach is counter-productive to the fiscal consolidation measures of the Government because it increases spending. However, all quarters should understand the importance of higher education and provide access to financially-struggling students through such approach. This is apparently better that providing universal free education which serves as blanket subsidy.

66. Scholarship recipients should not receive PTPTN loans.

PTPTN ought to make sure that any recipient of scholarship, particularly from JPA should not be entitled to PTPTN loans. Certain cases have been noted that those receiving JPA’s PIDN scholarship are also receiving PTPTN loans. The worst part is where the loans are invested in higher interest-yielding trust funds to earn money. This is how some students are becoming “financially-creative”.

This could be remote examples but should not be taken with ease. There could be more cases in Malaysia and these unscrupulous students are “stealing” the opportunity for education financing from those whom are more in need.

Conclusion

PTPTN needs reform and it’s crystal-clear. Pursue all these reforms and other appropriate measure before listing the defaulters in CCRIS. This will ensure the sustainability of PTPTN fund.

UM Ranking; Rebuttals to Lim Kit Siang and Critics

Following the recent debate over University of Malaya’s non-participation in the famed Times Higher Education Ranking (THES), I as the coordinator of UM Economics Students’ Secretariat (UMESS) would like to offer my opinion to refute the statements by Mr. Lim Kit Siang of DAP and student groups such as Mahasiswa Keadilan Malaysia and Progressive University of Malaya.

Mr.Lim has criticised UM for “chickening out” of the Times ranking but instead choose to partake in the QS ranking which is often regarded as “less demanding” compared to the former. What Mr. Lim failed to understand is UM has never walked away from the THES ranking, but rather chose to defer the participation to 2017. This might, in turn create another question. Why must wait until 2017? Why not now?

This decision of non-participation was taken during the leadership of the former Vice Chancellor, Tan Sri Ghauth Jasmon. To the students of University of Malaya and those who know him in person, Tan Sri Ghauth is known for his concern and emphasis on international university ranking. However, he made the controversial decision of non-participation in the Times ranking because of several reasons. Participation in the QS ranking is continued as usual.

The History

Times Higher Education and Quacquarelli Symonds (QS) used to jointly produce the rankings known then as Times Higher Education–QS World University Rankings from 2004 until 2009. However, the collaboration was ended in 2010 with QS retaining the intellectual property and the methodology used to evaluate the varsities’ performances. The Times, on the other hand, collaborated with Thomson Reuters, with a different set of methodology.

The Times’ new methodology evaluates certain elements such as research citations in a different approach compared to the QS. Several changes in the methodology are seen as more-inclined to the Western varsities and less considerate on the upcoming universities in the developing countries. For instance, QS looks at the research citations done in the past five years while the Times ranking looks at the past 10 years. So, how does this pose problems to UM?

UM has been receiving research grants from the Federal Government for years, albeit in small amounts. Significant research grants only came in the last 6 to 7 years, after the Research University concept was introduced by the Government. With research grants growing many folds, ISI-indexed citations have also increased along the years. If UM is to participate now, the ranking would be badly affected as the Times looks at the past 10 years and our citations have been minimal before the significant increase in research grants.  To the uninitiated, under the Times ranking, citation (research impact) amounts to 32.5% of the total score and this can cause severe upset to UM’s performance.

Many proponents of the Times ranking cite UM’s “extraordinary” achievement in 2004 when it was ranked 89^th. This is often used as a reason to reinforce their stand that UM should participate in the Times ranking. What these people fail to understand is that, it is wrong to equate the ranking in 2004 with the Times ranking now as the 89^th rank is prior to the split and the current Times ranking is using a different methodology. QS, however, is using the same methodology as in 2004.

UM was ranked 89^th in 2004, 169^th in 2005, 192^nd in 2006 and 180^th in 2009. UM was not even listed in the top 200 for the years 2007 and 2008. Looking at these figures, one could easily feel curious at the 89^th ranking in 2004. Actually, UM “managed” to attain the best ranking thus far in 2004 because of technical errors in the submission of data. To clarify, in the QS-THES ranking of 2004, ethnic minorities (local citizens) in University of Malaya were mistakenly counted as international students, thus pushing the score higher and giving UM an incredible ranking. This however, was later rectified in 2005 and this explains the sudden fall to 169^th rank in 2005.

To all the critics and student leaders out there, UM has been doing a gradual improvement to its performance with the latest 151^st rank as the best so far, apart from the 89^th position in 2004. Hopefully, with continuous monitoring and improvements, by 2017, UM can and will take part in the Times ranking for the first time. With the transformation plan envisaged by the former VC ongoing, hopefully University of Malaya can yield a good ranking in the Times Higher Education ranking in 2017. 

To the current Vice Chancellor, from my observation, critical thinking and general knowledge amongst the students have been deteriorating for quite some time. Hopefully, something can be done quickly, as I believe there is no point in the University churning out “4 flat zombies” with no critical thinking capabilities.