Malaysia Today - Your Source of Independent News
Malaysia Today - Your Source of Independent News |
- The truth about oil royalty
- MCA touts ‘Ah Jib Gor’ factor for Chinese vote
- Pakatan needs a decisive strategy now!
- An AGM of opposition bashing
| Posted: 21 Oct 2012 10:58 PM PDT  Azman Ujang, Bernama ONE of the populist ideas from the Pakatan Rakyat (PR) to win more votes in Sabah and Sarawak is a promise to increase the states' annual oil royalty from 5% to 20% if it comes to power. For opposition leaders, this has been the gist of their speeches in the two states, especially after the political tsunami of 2008 when Sabah and Sarawak came to be known as Barisan Nasional's (BN) "fixed deposit" states. This is because BN managed to win almost all of the 56 parliamentary seats in these states in the last election that enabled it to retain power while doing badly in Peninsular Malaysia. Several top PR leaders went on a roadshow to Sabah and Sarawak on Sept 16 in conjunction with the Malaysia Day celebration and again they hyped up this oil royalty issue. To the man on the street, it's a very attractive proposition because everyone wants their state to have more money so that they can have a better life. But in reality, the quota of oil royalty distribution to the country's three oil producing states – Sabah, Sarawak and Terengganu – is not as straight forward or simplistic as the 5% figure suggests. When you give them 5% for drilling oil in their offshore fields, the impression given is that Petronas, the national oil company, gets the other 95%. This is not the case and to a large extent this public misconception is due to the fact that many Malaysians, including parliamentarians, have been kept in the dark about who's getting what in the oil and gas production industry, which is by far our biggest revenue earner. Despite this issue being recycled, no one has come out to reveal the royalty sharing formula. I did my own enquiries and a former senior executive of a multinational oil company told me something informative that I am delighted to share here. According to my source, this is how it works – 5% is federal royalty and another 5% is state government royalty. Of the balance, up to 20% goes to what is known as 'cost oil' to recover the cost of production. This leaves a balance of 70% which is split between the operator and Petronas. The operator here means foreign oil companies that commit billions in investment to drill for oil in the fields awarded to them by Petronas. At times, they spend billions without striking any oil of the volume required to make it commercially viable. He cited as an example, a typical production sharing contract (PSC) between a foreign oil company and Petronas – of the 70%, 30% goes to the company and the balance to Petronas. In terms of oil barrels, let's say for every 100 barrels, the PSC split is five barrels to the Federal Treasury, five barrels to the State Treasury, and up to 20 barrels claimed by the operator as cost oil. The balance of 70 barrels is split 70:30 with Petronas getting 70% or 49 barrels, and the operator 30% or 21 barrels. To the credit of Petronas, at long last on Oct 12, it came out with what I consider to be one of the most significant press statements it has ever released. As far as I can recall, this was the first time that Petronas has reacted to the oil royalty issue, a departure from its past policy of avoiding to discuss it openly. Petronas said that its own sustainability to contribute to the nation would be undermined should royalty payments to the states be increased from 5% to 20%, because it would result in lower petroleum income tax payments. What politicians like PR de facto leader Datuk Seri Anwar Ibrahim, who once served as finance minister and who's been harping on increasing the royalty to 20%, deliberately don't tell the people is that what they are trying to do is to put our entire oil and gas industry at risk. Petronas explained that over the next five years alone, planned projects with a total capital expenditure worth about RM170 billion are at risk of being cancelled if the royalty payment to the states is increased. Any increase in oil royalty to the states would automatically reduce the profitability and economic viability of all current and future oil and gas projects under development. This in itself will deter Petronas and PSC contractors from further investing in these projects. There are some among the ruling BN leaders in the two states who are beginning to be influenced by the prospect of a royalty increase. They are voicing out to the federal government to consider giving them an increase, but what they fail to realise is that a reduction in the oil and gas production will result in lower payments to the states. It's still 5% but this 5% in monetary terms will be much less. On the bigger picture, a reduction in oil and gas production – which could happen if foreign investors are put off by the prospect of getting less from the PSC – will also threaten Malaysia's energy security. "Apart from this direct impact, the resulting slowdown will have an adverse multiplier effect on the domestic oil and gas industries such as service companies as well as spin-off industries, leading to a reduction in employment opportunities for the people residing in those states," warned Petronas. This is indeed a very grim scenario akin to killing the goose that lays the golden eggs. Close to 30% of our gross domestic product comes from Petronas's output and the oil company contributes well over 40% of federal government revenue. Federal government revenue is ploughed back to all states, and since Sabah and Sarawak became BN's safe deposit states, they have been receiving huge allocations for development much to the envy of the non-oil producing states. And whatever extras the federal government is giving the two states, as per their requests, actually come from the federal portion of the Petronas royalty. Under our laws, oil belongs to the federal government and the oil producing states are already blessed with the 5% royalty which amounts to a cool few billion annually. Asking for more is tantamount to having the best of both worlds and this is not the way to run a federation of states like Malaysia. It's just unfair to other states. Politics is of course politics, but Malaysia will be better off with politicians who know what they are talking about especially when it comes to such important issues. They have to get their facts right so that they don't simply create issues out of thin air. Just like the PR's shadow Budget 2013 with its slew of highly populist proposals. Second Finance Minister Datuk Seri Ahmad Husni Mohamad Hanadzlah has described the budget as "mathematically wrong, misleading and will definitely increase the country's fiscal deficit and national debt". It would be wise for the government and the Opposition to heed Petronas's warning against any review of the oil royalty formula which has worked so well in enriching Malaysia and in the process, made Petronas recognisable as the world's most profitable national oil company.
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| MCA touts ‘Ah Jib Gor’ factor for Chinese vote Posted: 21 Oct 2012 03:27 PM PDT
Nomy Nowzir and Hafidz Baharom, The Malaysian Insider Datuk Seri Najib Razak's popularity or the "Ah Jib Gor" factor will help cajole a segment of the Chinese community back to Barisan Nasional (BN) in the coming polls, MCA grassroots leaders have agreed, but warned that the same sentiment could not topple the opposition in its urban fortresses. This was the resounding sentiment among delegates attending the MCA's 59th annual general meeting at Wisma MCA yesterday, which is seen as the party's final chance to chart its election strategies in the months ahead as it heads into its toughest battle yet. "Najib is good because he has done a lot of programmes for the people, I am sure the Chinese will vote BN," said one delegate, Lim Chee Cheong, from Rasah in Negri Sembilan. "Najib has done a lot for the Chinese. And he has our support and the Chinese community support as well," another delegate, Loke Poh Chye from Pengkalan Kota in Penang, toldThe Malaysian Insider. During the meeting earlier, among one of the key battle cries sounded by the party leadership was a call for delegates to "Stand with Najib", who was extensively described as a leader popular among the Chinese. In his presidential address, party president Datuk Seri Dr Chua Soi Lek repeatedly praised Najib's transformative policies and attention to Chinese community issues, even telling the prime minister, "Sir, sometimes I think that you are too kind." At the MCA Youth AGM on Saturday, party deputy president Datuk Seri Liow Tiong Lai predicted that the MCA will "rise again" in the coming polls, citing Najib's popularity among the Chinese community as one of the key reasons behind the possibility. He said the prime minister's outreach towards the Chinese community, even resorting to social media tools like Facebook to create a Chinese persona, "Ah Jib Gor" (Brother Najib), had successfully convinced voters that the community would not be left out of the nation's development. "The feel-good factor is coming back. And the commitment from the PM to the Chinese… the Ah Jib Gor factor shows that he will listen to the Chinese community," Liow had said. But despite these leaders' optimism, several MCA delegates approached by The Malaysian Insider yesterday agreed that the party would suffer the most when attempting to sway the urban Chinese vote, pointing out that in areas like Petaling Jaya Selatan or key states like Penang, it would be near impossible for the MCA to trounce the Pakatan Rakyat (PR) federal opposition pact. "I don't think so we can win back PJ, they are entrenched already with the opposition. I don't think we can take Penang back either," said Loh KF, a delegate from the area. Loh was among several delegates who also admitted that the issue of corruption would be among BN's greatest stumbling block to woo the Chinese vote, complaining that it was hard to answer voters who brought up issues like the National Feedlot Centre (NFC) scandal and other graft cases. "Bribery is really bad, I was a victim myself," said Sungai Siput MCA delegate Tham Siew Poh. Tham was also critical of the MCA's focus on hudud law, a wedge issue used against the DAP and PAS who are members of the PR opposition pact. "Most Chinese already understand that the hudud issue is hands-off, it's a religious question, very sensitive. This issue shouldn't be commented upon. "After all, hudud has already been implemented in many countries, why be scared if we do no wrong?" Tham said. But his opinion was not shared by Tenggara MCA delegate Catherine Chia, from Johor. Chia said the hudud issue was critical to be highlighted on as it affects Chinese culture and was demeaning towards women. "I think this hudud will affect everybody, not only Chinese, the whole nation. If the nation is under hudud law, we will become just like the Middle East nations. And eight of the most corrupt nations come from that region," Loke said.
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| Pakatan needs a decisive strategy now! Posted: 21 Oct 2012 02:32 PM PDT Pakatan must prove to the rakyat that it can tackle national misfortunes and produce a strategy to overcome grim election possibilities now, before the general election. Awang Abdillah, FMT Since the beginning of the Mahathir era until today, the Umno-led government has accumulated a trail of unresolved national misfortunes, by-products of long-term bad governance and gross abuses of power. It has compelled Malaysians to collectively act (read 2008 polls tsunami) in order to save the nation from the these ills and their consequences. Hence Pakatan Rakyat, as the opposition coalition, must take the initiative now to address these failed policies and practices instead of waiting until it is elected to office as the next federal government. These long-standing, unresolved products of mismanagement have generated into toxic national waste harmful to the national, political and economic environments that have earned Malaysia the tag as a "sick nation" and the laughing stock of Asia. Pakatan must tackle these national disasters now ahead of the impending 13th general election, bearing in mind the grim possibility of a double tragedy – declaration of an emergency and a crackdown on the opposition before the election is held, thereby clearing the path for an easy election victory for the Umno-led Barisan Nasional. Pakatan must therefore foresee these possible circumstances and stop any and all impending election tragedies now to enable it to overtake the incumbent federal government. It is critical that Pakatan proves to the rakyat that it can tackle these national misfortunes and produce a strategy to overcome these grim election possibilities prior to the general election. The Pakatan leaders should set up steering committees to analyse and establish the facts and offer solutions for each one of these issues and situations. Key issues that the steering committees should address are:
The low rate could be attributed to tax evasion by BN crony companies and individual politicians who stash their money overseas and corrupt government officials who are bribed from collecting the full amount of taxes from companies and businessmen.
Pakatan must draw up a comprehensive training programme for the police force, including inculcating good religious and moral values before it comes to power.
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| Posted: 21 Oct 2012 02:29 PM PDT MCA chief Dr Chua Soi Lek said the party has no time for discussions on policies because the general election was around the corner. So MCA's AGM was all about bombarding its rivals. Leven Woon, FMT Opposition bashing and pre-election chest thumping took centre stage at the two-day MCA annual general assembly (AGM) which concluded yesterday evening. As party chief Dr Chua Soi Lek put it, MCA had no time for policy discussions at the AGM but opted to switch into battle mode to regain its dwindling Chinese support. "While an AGM is always a platform for laying out policies, we feel that this is not the time to talk about policies because the general election is only two to three months away. "So the important thing is about party unity and winning the election," he told reporters. The AGM saw MCA leaders and delegates lashing out at Pakatan Rakyat's policies, attacking PAS' hudud stance and criticising DAP for compromising its stand with regard to PAS. Delegates also came dressed in Barisan Nasional T-shirts, bearing anti-Pakatan slogans. Hence, Chua, together with his deputy chief Liow Tiong Lai, Youth chief Wee Ka Siong and Wanita chief Yu Chok Tow launched a broadside against PAS and its hudud aspirations should the Islamic party come into power. The attack was, however, akin to new wine in an old bottle, as many statements made in the AGM such as hudud would affect the non-Muslims, cinemas and lottery outlets would be closed and countries that adopt hudud were the most corrupted were mentioned numerous times before. MCA Wanita vice-chief Heng Seai Kie, however, added a fresh twist with her interpretation of a statement by PAS spiritual leader Nik Abdul Aziz Nik Mat made four years ago. Nik Aziz had said that women who did not cover their modesty (tutup aurat) deserved to be raped, but Heng however told delegates that it would also mean that non-Muslim women should be raped. "(Nik Aziz) was instigating the Muslims to rape the non-Muslims," she had said. Do or die battle On economic issues, MCA leaders heaped praises on the Government Transformation Programmes by Prime Minister Najib Tun Razak, labelling it as the only roadmap that would ensure the country achieved its high-income nation ambition. Chua even mentioned in his presidential speech that the rakyat should not "change the farmers when the seed of transformation had been planted by Najib".
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