Many of you have praised Najib's initiative to transform Malaysia and most of the time, you would be correct to do that. When the New Economic Model was launched, I must admit, I was quite optimistic about Malaysia's prospects. However. as time passed, the New Economic Model decayed when the 10th Malaysia Plan was launched and it totally deteriorated when the Economic Transformation Programme was announced.
Why do I say this? Just a few weeks ago, I saw this piece of news. Here is an extract:
KUALA LUMPUR, June 16 — Asia Petroleum Hub (APH), a private company to develop and operate a multibillion-dollar oil terminal in Johor, has been placed under receivership by CIMB Bank, Singapore’s Business Times reported.
According to BT, the latest development could spell the end for a development once billed as one of the world’s largest fully integrated terminals with storage capacity of 924,000 cubic metres, large trans-shipment capacity and multiple jetties — all located on a 40-ha reclaimed island off the coast of Johor.
I would say that this is the first sign of many things to come in the next ten years. APH is a private company, just like how many of the projects in the ETP are supposed to be private ventures. As you can see from the extract above, they were trying to construct an ambitious project that sounds superbly promising, just like many of the projects in the ETP. So what happened? Here is what happened:
APH drew down RM840 million for project costs. But the executives said that project costs had escalated and APH was looking for investors for a further RM2 billion in new financing, the report said.
Surprise, surprise! The cost of the project was much higher than estimated, and they didn't have enough money. So now that they don't have enough money, what is going to happen to the half-baked oil terminal in Johor? Someone has to bail them out.
I am not saying that every ETP project is going to turn out like this, but let us assume, on the conservative side, about 20% of the projects run into cost overruns. That would mean that out of the RM1.4 trillion in projects that was planned under the ETP, about RM280 billion (YES, BILLION) worth of projects would end up in deep shit. Let's not kid ourselves. I don't even remember a time where an announced project did not meet cost overruns. So the figure would probably be a lot higher than 20%.
While Najib is out announcing all these impressive sounding projects all over town, let us ask ourselves, how is that going to improve our country? Pause for a moment and think about 10 years from now. With so much investment, let us even assume that our GDP would end up reaching the goal that was set out in the ETP. Do we honestly believe that our quality of lives would improve automatically without us having to work hard or improve at all?
This is precisely the self-denying, atrocious attitude that many Malaysians have. We think that just because the government announces 131 Entry Point Projects, our lives would automatically be better 10 years from now. We still need to improve our skills and knowledge and productivity and efficiency and competitiveness. Wealth isn't going to just drop down from the sky onto our laps. And since the key factor is to become competitive and productive and what not, why not make that our main goal instead of conjuring up 5001 acronyms to mislead the people into thinking that our lives will automatically be all right if we do all this big projects?
You really have to know your investments before you even start to investing.
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