Saturday May 16, 2009
Moving up the value chain
By JAGDEV SINGH SIDHU
AMIDST the strategies of trying to jump-start economic growth during the current recession, the Government has been drumming up talk and interest in trying to move the economy up the value chain.
In essence, the plan is to get the country into the list of high income economies and there have been more than a sprinkle of stories over the past few weeks to suggest that this push might be a little more than idle chatter.
“If we stand still during these dynamic times, we will be swiftly overtaken by our competitors, as we have overtaken others in the past,’’ says Minister in the Prime Minister’s Department Tan Sri Nor Mohamed Yakcop in a recent news report.
“We are at a critical point in time and failure to act today will have repercussions for many years ahead.’’
Economic history is full of countries that have stagnated and left behind by poor economic policies, overtaken by countries that have taken the initiative to move forward by leveraging on their strengths.
Today, we see countries in Asia, such as China and India, which are realising the potential of the size and strengths of their economies. Closer to home, Vietnam has catapulted itself as a viable base of operations for labour-intensive industries and eventually other more populous countries in the region would also do the same.
Recognising the need to move up the value chain is not new as former prime minister Tun Dr Mahathir Mohamad did so when he unveiled Vision 2020 in the early 1990s.
The points laid out under Vision 2020 was a blueprint for Malaysia to attain developed nation status. While the statistical number of hitting high economic growth of 7% per annum until the year 2020 was the headline number, the plan also called for the maturing of society and the pursuit of scientific progress.
The definition of developed nation varies and often includes a number of subjective factors such as human development. But according to the World Bank, a country is classified as high income once its gross national income per capita is US$11,456 or more and in Malaysia’s case, we are slightly more than halfway to match that mark.
Based on the World Bank’s criteria, 66 countries have attained high income status. In Asia, the countries that have passed that mark are Japan, South Korea, Singapore, Kuwait, Oman, Hong Kong, Taiwan, Bahrain, Qatar, United Arab Emirates, Saudi Arabia and Brunei.
To achieve developed nation status by 2020, an average of 7.5% economic growth per annum needs to be sustained from here on, Nor Mohamed says in the report, adding that this is only possible if the economy is re-energised towards higher income and growth trajectory.
“We cannot expect to be a high-income developed nation through incremental change. We need a model which is more relevant to current times.
“To move to a higher income-based economy, we have to move towards a knowledge and innovation-based economy where skilled labour is needed,’’ he says.
While the rhetoric on moving up the value chain has been laid on thick by politicians over the years, economists are not too optimistic of the country making the jump this time around.
“What we need is a holistic approach,’’ Maybank Investment Bank chief economist Suhaimi Illias tells StarBizWeek.
Suhaimi believes weaknesses in the economy, such as the country’s reliance on cheap foreign labour, need to be weeded out and improvements to the nation’s education system and skills training must be done before any effective move up the value chain can be made.
“The country must also start attracting investments with higher value added and the domestic skill set must be able to meet this higher demand,’’ he says, adding that manufacturers should also be encouraged to move their labour-intensive industries out of the country.
He suggests the country focuses on target sectors that can make the leap into higher value-added activity and have some coordinating body oversee the move into a high income economy.
An economist from RHB Research also says efforts to move the country to a high income economy would be a steep challenge.
“Whether such a strategy can be executed properly is another thing,’’ he says.
The economist feels that the country might not have been successful in attracting a large number of value-added investments due to the lack of supporting industries in those segments.
He feels skilled labour is an issue.
Allowing the natural progression up the value chain is ideal but can the country get a helping push by allowing its currency to appreciate?
“Currency strengthens as a consequence of growth rather than policy,’’ he says.
Sunday, May 17, 2009
Online interbank business upswing
Saturday May 16, 2009
Online interbank business upswing
By DALJIT DHESI
The total value and volume of Internet banking transactions have seen phenomenal growth« PROMOD DASS OF RAM RATINGS SERVICES BHD
THE online interbank business has been gaining popularity over the last few years as more consumers are now turning to the Internet to make payments electronically. With higher volume of online interbank transactions, banks have been enjoying good income from this channel and are upbeat about its growth potential amid the weak economy.
RAM Rating Services Bhd head of financial institutions ratings Promod Dass says that based on Bank Negara’s Financial Stability and Payments Systems Report 2008, the total value and volume of Internet banking transactions have been tracking phenomenal growth.
In 2008, the total value of transactions grew by 50% to RM624bil from RM418bil the previous year. In terms of transaction volume, Internet banking services rose about 35% to 85 million transactions from 63 million in 2007.
He attributes this to increased penetration of Internet services and the convenience of Internet banking with the Government, corporates and retailers offering e-payment channels as an alternative to traditional channels of payment.
Given the growing popularity of online banking transactions, the question begs itself – are the online interbank transaction charges fair to the man on-the-street?
A common form of online interbank transactions is the Interbank Giro (IBG), which is managed by Malaysian Electronic Payment System (1997) Sdn Bhd (MEPS).
Under this system, the charges (under Bank Negara’s guidelines) for the first two transactions from basic accounts are 50 sen each and subsequently, it involves a maximum rate of RM2 per transaction.
For multiple online transactions, the charges ought to be lowered« ROBERT FOO OF MYFP SERVICES SDN BHD
Bank Negara, which oversees the real time gross settlement system, had last year reduced its transaction fee (for payments made by financial institutions on behalf of their customers) using the system by RM1 to RM1.50.
Calls to slash charges
MyFP Services Sdn Bhd financial planner and managing director Robert Foo says that for multiple online transactions, the charges ought to be lowered, especially when one has substantial deposits with banks and they are already gaining from the low cost of deposits.
Jeremy Tan, a licensed financial adviser with Standard Financial Planner Sdn Bhd, concurs.
He says a reasonable rate for multiple transactions performed within the same day and for the current month should be RM1 per transaction per day and for more than five transactions, the rate charge should be lowered to 50 sen per transaction.
Tan, however, feels the current charges for online transactions (not multiple transactions) are reasonable as they save time.
Foo advocates greater competition among banks and the presence of “cartel” regulations to prevent banks from taking advantage of their privileged position in Malaysia.
“As a consumer, I think we should see greater competition among banks so that the cost of services will be lower,” he adds.
Fighting the cause
Malaysian Rating Corp Bhd chief economist Nor Zahidi Alias says any reduction in interbank fees will certainly help to lower transaction costs and promote the usage of Internet banking.
“This is critical as higher usage of Internet banking can greatly benefit the economy by minimising time wastage and promoting higher productivity and efficiency.
»Any reduction in interbank fees will help to lower transaction costs« NOR ZAHIDI ALIAS OF MALAYSIA RATING CORP BHD
“It is noteworthy that the penetration rate for Internet subscribers stands at only 14.3% as of December 2007. Therefore, charging customers too much for online banking transactions will only discourage people from using Internet services,’’ he adds.
From the banks’ point of view, Zahidi says fees charged for interbank transactions will help to offset margin compression experienced by most banks as they increase the amount of non-interest income.
Due to stiff competition, most banks are channelling extra effort to expand their non-interest income. In 2008, statistics reveal that non-interest income as a percentage of operating income had climbed to 17.4%, up from 16.4% in 2004.
National Consumer Complaints Centre chief executive Muhammad Shaani Abdullah, who is also Federation of Malaysian Consumers Associations secretary, says that the interbank charges have not been revised for some time. He suggests that the central bank set a ceiling and reduce interbank charges to justify the costs to consumers.
“Who is actually incurring all the costs? Consumers are being charged for the service. Is it fair to charge low income earners such fees?” he asks.
The Consumers Association of Penang (CAP) president S.M. Mohamed Idris echoes such sentiments, adding that the RM2 charge is not fair. He also points out that the charges should be waived or, at the very least, be “nominal”.
“Banks are always doing this ... encouraging consumers to try out something new for the bank’s benefit and making consumers pay heavily for it. Remember, how consumers were encouraged to use the ATMs (auto teller machines) and when they started using it in large numbers, the banks started charging RM8 per year?’’ remarks Idris.
The bankers’ perspective
His biggest contention is why are the banks imposing a fee when it is ultimately the customer who is doing the work of transferring money instead of the bank staff. He elaborates that electronic banking benefits the banks as they are able to save cost by reducing staff and re-deploying them to sell unit trusts or bancassurance.
The Association of Banks in Malaysia (ABM), in a response to queries on this subject, replies: “The nominal charge of RM2 is reasonable. However, under the basic banking services framework, there is a mechanism for a reduced rate to cater for specific products, bank to bank and small business needs.
“Some member banks do charge lower than RM2 for consumer Giro transactions. The nominal rate was reviewed last month in view of the challenging economic conditions. It is appreciated that there is a continual need to review cost components and to enhance consumer convenience.”
On the rates of online transfers in other countries, Alliance Bank Malaysia Bhd group CEO Datuk Bridget Lai says different countries have different fee schemes for online transfers.
“For example, some banks abroad charge a percentage fee for each completed transaction. This business model is especially prevalent in North American and European financial institutions.
“At present, most financial institutions in Malaysia charges RM1 per online transfer transaction. So do we,’’ Lai notes.
United Overseas Bank (M) Bhd director and CEO Chan Kok Seong says the charges in Malaysia are lower than that of many developed countries and the bank will consider reviewing the rate if there is enough demand to substantiate a lower interbank rate.
The bank needs to factor in the fixed and variable costs of production to maintain an efficient payment system for customers’ convenience, Chan adds.
As far as similar rates in other countries in the region are concerned, ABM says the online interbank transaction rates adopted by member banks in Malaysia are competitive and fair.
Tan says there are countries, for example Singapore, where banks do not charge a fee for local interbank transactions.
Foo adds: “In some countries, electronic banking services are given free of charge, but it depends on the customer segment.
Sometimes a standard yearly fee is charged for all services under certain schemes and not on a transactional basis like the RM2 for IBG.”
Online interbank business upswing
By DALJIT DHESI
The total value and volume of Internet banking transactions have seen phenomenal growth« PROMOD DASS OF RAM RATINGS SERVICES BHD
THE online interbank business has been gaining popularity over the last few years as more consumers are now turning to the Internet to make payments electronically. With higher volume of online interbank transactions, banks have been enjoying good income from this channel and are upbeat about its growth potential amid the weak economy.
RAM Rating Services Bhd head of financial institutions ratings Promod Dass says that based on Bank Negara’s Financial Stability and Payments Systems Report 2008, the total value and volume of Internet banking transactions have been tracking phenomenal growth.
In 2008, the total value of transactions grew by 50% to RM624bil from RM418bil the previous year. In terms of transaction volume, Internet banking services rose about 35% to 85 million transactions from 63 million in 2007.
He attributes this to increased penetration of Internet services and the convenience of Internet banking with the Government, corporates and retailers offering e-payment channels as an alternative to traditional channels of payment.
Given the growing popularity of online banking transactions, the question begs itself – are the online interbank transaction charges fair to the man on-the-street?
A common form of online interbank transactions is the Interbank Giro (IBG), which is managed by Malaysian Electronic Payment System (1997) Sdn Bhd (MEPS).
Under this system, the charges (under Bank Negara’s guidelines) for the first two transactions from basic accounts are 50 sen each and subsequently, it involves a maximum rate of RM2 per transaction.
For multiple online transactions, the charges ought to be lowered« ROBERT FOO OF MYFP SERVICES SDN BHD
Bank Negara, which oversees the real time gross settlement system, had last year reduced its transaction fee (for payments made by financial institutions on behalf of their customers) using the system by RM1 to RM1.50.
Calls to slash charges
MyFP Services Sdn Bhd financial planner and managing director Robert Foo says that for multiple online transactions, the charges ought to be lowered, especially when one has substantial deposits with banks and they are already gaining from the low cost of deposits.
Jeremy Tan, a licensed financial adviser with Standard Financial Planner Sdn Bhd, concurs.
He says a reasonable rate for multiple transactions performed within the same day and for the current month should be RM1 per transaction per day and for more than five transactions, the rate charge should be lowered to 50 sen per transaction.
Tan, however, feels the current charges for online transactions (not multiple transactions) are reasonable as they save time.
Foo advocates greater competition among banks and the presence of “cartel” regulations to prevent banks from taking advantage of their privileged position in Malaysia.
“As a consumer, I think we should see greater competition among banks so that the cost of services will be lower,” he adds.
Fighting the cause
Malaysian Rating Corp Bhd chief economist Nor Zahidi Alias says any reduction in interbank fees will certainly help to lower transaction costs and promote the usage of Internet banking.
“This is critical as higher usage of Internet banking can greatly benefit the economy by minimising time wastage and promoting higher productivity and efficiency.
»Any reduction in interbank fees will help to lower transaction costs« NOR ZAHIDI ALIAS OF MALAYSIA RATING CORP BHD
“It is noteworthy that the penetration rate for Internet subscribers stands at only 14.3% as of December 2007. Therefore, charging customers too much for online banking transactions will only discourage people from using Internet services,’’ he adds.
From the banks’ point of view, Zahidi says fees charged for interbank transactions will help to offset margin compression experienced by most banks as they increase the amount of non-interest income.
Due to stiff competition, most banks are channelling extra effort to expand their non-interest income. In 2008, statistics reveal that non-interest income as a percentage of operating income had climbed to 17.4%, up from 16.4% in 2004.
National Consumer Complaints Centre chief executive Muhammad Shaani Abdullah, who is also Federation of Malaysian Consumers Associations secretary, says that the interbank charges have not been revised for some time. He suggests that the central bank set a ceiling and reduce interbank charges to justify the costs to consumers.
“Who is actually incurring all the costs? Consumers are being charged for the service. Is it fair to charge low income earners such fees?” he asks.
The Consumers Association of Penang (CAP) president S.M. Mohamed Idris echoes such sentiments, adding that the RM2 charge is not fair. He also points out that the charges should be waived or, at the very least, be “nominal”.
“Banks are always doing this ... encouraging consumers to try out something new for the bank’s benefit and making consumers pay heavily for it. Remember, how consumers were encouraged to use the ATMs (auto teller machines) and when they started using it in large numbers, the banks started charging RM8 per year?’’ remarks Idris.
The bankers’ perspective
His biggest contention is why are the banks imposing a fee when it is ultimately the customer who is doing the work of transferring money instead of the bank staff. He elaborates that electronic banking benefits the banks as they are able to save cost by reducing staff and re-deploying them to sell unit trusts or bancassurance.
The Association of Banks in Malaysia (ABM), in a response to queries on this subject, replies: “The nominal charge of RM2 is reasonable. However, under the basic banking services framework, there is a mechanism for a reduced rate to cater for specific products, bank to bank and small business needs.
“Some member banks do charge lower than RM2 for consumer Giro transactions. The nominal rate was reviewed last month in view of the challenging economic conditions. It is appreciated that there is a continual need to review cost components and to enhance consumer convenience.”
On the rates of online transfers in other countries, Alliance Bank Malaysia Bhd group CEO Datuk Bridget Lai says different countries have different fee schemes for online transfers.
“For example, some banks abroad charge a percentage fee for each completed transaction. This business model is especially prevalent in North American and European financial institutions.
“At present, most financial institutions in Malaysia charges RM1 per online transfer transaction. So do we,’’ Lai notes.
United Overseas Bank (M) Bhd director and CEO Chan Kok Seong says the charges in Malaysia are lower than that of many developed countries and the bank will consider reviewing the rate if there is enough demand to substantiate a lower interbank rate.
The bank needs to factor in the fixed and variable costs of production to maintain an efficient payment system for customers’ convenience, Chan adds.
As far as similar rates in other countries in the region are concerned, ABM says the online interbank transaction rates adopted by member banks in Malaysia are competitive and fair.
Tan says there are countries, for example Singapore, where banks do not charge a fee for local interbank transactions.
Foo adds: “In some countries, electronic banking services are given free of charge, but it depends on the customer segment.
Sometimes a standard yearly fee is charged for all services under certain schemes and not on a transactional basis like the RM2 for IBG.”
The almighty yuan?
Saturday May 16, 2009
The almighty yuan?
COMMENT By NOURIEL ROUBINI
It would take a long time for the yuan to become a reserve currency, but it could happen.
THE 19th century was dominated by the British Empire, the 20th century by the United States. We may now be entering the Asian century, dominated by a rising China and its currency. While the dollar’s status as the major reserve currency will not vanish overnight, we can no longer take it for granted. Sooner than we think, the dollar may be challenged by other currencies, most likely the Chinese yuan. This would have serious costs for America, as our ability to finance our budget and trade deficits cheaply would disappear.
Traditionally, empires that hold the global reserve currency are also net foreign creditors and net lenders. The British Empire declined – and the pound sterling lost its status as the main global reserve currency – when Britain became a net debtor and a net borrower in World War II. Today, the United States is in a similar position. It is running huge budget and trade deficits, and is relying on the kindness of restless foreign creditors who are starting to feel uneasy about accumulating even more dollar assets. The resulting downfall of the dollar may be only a matter of time.
But what could replace it? The pound sterling, the Japanese yen and the Swiss franc remain minor reserve currencies, as those countries are not major powers. Gold is still a barbaric relic whose value rises only when inflation is high. The euro is hobbled by concerns about the long-term viability of the European Monetary Union. That leaves the yuan.
China is a creditor country with large current account surpluses, a small budget deficit, much lower public debt as a share of the gross domestic product (GDP) than the United States, and solid growth. And it is already taking steps toward challenging the supremacy of the dollar.
Beijing has called for a new international reserve currency in the form of the International Monetary Fund’s special drawing rights (a basket of dollars, euros, pound sterling and yen). China will soon want to see its own currency included in the basket, as well as the yuan used as a means of payment in bilateral trade.
At the moment, though, the yuan is far from ready to achieve reserve currency status. China would first have to ease restrictions on money entering and leaving the country, make its currency fully convertible for such transactions, continue its domestic financial reforms and make its bond markets more liquid.
It would take a long time for the yuan to become a reserve currency, but it could happen. China has already flexed its muscle by setting up currency swaps with several countries (including Argentina, Belarus and Indonesia) and by letting institutions in Hong Kong issue bonds denominated in yuan, a first step toward creating a deep domestic and international market for its currency.
If China and other countries were to diversify their reserve holdings away from the dollar – and they eventually will – the United States would suffer. We have reaped significant financial benefits from having the dollar as the reserve currency. In particular, the strong market for the dollar allows Americans to borrow at better rates.
We have, thus, been able to finance larger deficits for longer and at lower interest rates, as foreign demand has kept Treasury yields low. We have been able to issue debt in our own currency rather than a foreign one, thus shifting the losses of a fall in the value of the dollar to our creditors. Having commodities priced in dollars has also meant that a fall in the dollar’s value does not lead to a rise in the price of imports.
Now, imagine a world in which China could borrow and lend internationally in its own currency. The yuan, rather than the dollar, could eventually become a means of payment in trade and a unit of account in pricing imports and exports, as well as a store of value for wealth by international investors.
Americans would pay the price. We would have to shell out more for imported goods, and interest rates on both private and public debt would rise. The higher private cost of borrowing could lead to weaker consumption and investment, and slower growth.
This decline of the dollar might take more than a decade, but it could happen even sooner if we do not get our financial house in order. The United States must rein in spending and borrowing, and pursue growth that is not based on asset and credit bubbles. For the last two decades, America has been spending more than its income, increasing its foreign liabilities and amassing debts that have become unsustainable. A system where the dollar was the major global currency allowed us to prolong reckless borrowing.
Now that the dollar’s position is no longer so secure, we need to shift our priorities. This will entail investing in our crumbling infrastructure, alternative and renewable resources and productive human capital – rather than in unnecessary housing and toxic financial innovation. This will be the only way to slow the decline of the dollar and sustain our influence in global affairs. — IHT
● Nouriel Roubini is a professor of economics at the New York University Stern School of Business and the chairman of an economic consulting firm.
The almighty yuan?
COMMENT By NOURIEL ROUBINI
It would take a long time for the yuan to become a reserve currency, but it could happen.
THE 19th century was dominated by the British Empire, the 20th century by the United States. We may now be entering the Asian century, dominated by a rising China and its currency. While the dollar’s status as the major reserve currency will not vanish overnight, we can no longer take it for granted. Sooner than we think, the dollar may be challenged by other currencies, most likely the Chinese yuan. This would have serious costs for America, as our ability to finance our budget and trade deficits cheaply would disappear.
Traditionally, empires that hold the global reserve currency are also net foreign creditors and net lenders. The British Empire declined – and the pound sterling lost its status as the main global reserve currency – when Britain became a net debtor and a net borrower in World War II. Today, the United States is in a similar position. It is running huge budget and trade deficits, and is relying on the kindness of restless foreign creditors who are starting to feel uneasy about accumulating even more dollar assets. The resulting downfall of the dollar may be only a matter of time.
But what could replace it? The pound sterling, the Japanese yen and the Swiss franc remain minor reserve currencies, as those countries are not major powers. Gold is still a barbaric relic whose value rises only when inflation is high. The euro is hobbled by concerns about the long-term viability of the European Monetary Union. That leaves the yuan.
China is a creditor country with large current account surpluses, a small budget deficit, much lower public debt as a share of the gross domestic product (GDP) than the United States, and solid growth. And it is already taking steps toward challenging the supremacy of the dollar.
Beijing has called for a new international reserve currency in the form of the International Monetary Fund’s special drawing rights (a basket of dollars, euros, pound sterling and yen). China will soon want to see its own currency included in the basket, as well as the yuan used as a means of payment in bilateral trade.
At the moment, though, the yuan is far from ready to achieve reserve currency status. China would first have to ease restrictions on money entering and leaving the country, make its currency fully convertible for such transactions, continue its domestic financial reforms and make its bond markets more liquid.
It would take a long time for the yuan to become a reserve currency, but it could happen. China has already flexed its muscle by setting up currency swaps with several countries (including Argentina, Belarus and Indonesia) and by letting institutions in Hong Kong issue bonds denominated in yuan, a first step toward creating a deep domestic and international market for its currency.
If China and other countries were to diversify their reserve holdings away from the dollar – and they eventually will – the United States would suffer. We have reaped significant financial benefits from having the dollar as the reserve currency. In particular, the strong market for the dollar allows Americans to borrow at better rates.
We have, thus, been able to finance larger deficits for longer and at lower interest rates, as foreign demand has kept Treasury yields low. We have been able to issue debt in our own currency rather than a foreign one, thus shifting the losses of a fall in the value of the dollar to our creditors. Having commodities priced in dollars has also meant that a fall in the dollar’s value does not lead to a rise in the price of imports.
Now, imagine a world in which China could borrow and lend internationally in its own currency. The yuan, rather than the dollar, could eventually become a means of payment in trade and a unit of account in pricing imports and exports, as well as a store of value for wealth by international investors.
Americans would pay the price. We would have to shell out more for imported goods, and interest rates on both private and public debt would rise. The higher private cost of borrowing could lead to weaker consumption and investment, and slower growth.
This decline of the dollar might take more than a decade, but it could happen even sooner if we do not get our financial house in order. The United States must rein in spending and borrowing, and pursue growth that is not based on asset and credit bubbles. For the last two decades, America has been spending more than its income, increasing its foreign liabilities and amassing debts that have become unsustainable. A system where the dollar was the major global currency allowed us to prolong reckless borrowing.
Now that the dollar’s position is no longer so secure, we need to shift our priorities. This will entail investing in our crumbling infrastructure, alternative and renewable resources and productive human capital – rather than in unnecessary housing and toxic financial innovation. This will be the only way to slow the decline of the dollar and sustain our influence in global affairs. — IHT
● Nouriel Roubini is a professor of economics at the New York University Stern School of Business and the chairman of an economic consulting firm.
Muslim's Involvement In Halal Industry Still Low: Musa
May 17, 2009 15:57 PM
Muslim's Involvement In Halal Industry Still Low: Musa
TAWAU, May 17 (Bernama) -- The number of Muslim entrepreneurs embarking in the halal industry in Sabah is still low compared to the non-Muslims despite the industry's huge potential, Chief Minister Datuk Seri Musa Aman said.
He said that at the moment, non-Muslim entrepreneurs controlled about 80 per cent of the industry.
"Muslim entrepreneurs should therefore venture into the industry in a big way," he said when opening the state-level halal industry exhibition and seminar here Sunday.
The two-day seminar, which also attracted participants from Brunei and Indonesia, is organised by the Standard Malaysia and Sabah Economic Development Corporation.
Musa said the global halal industry's annual worth is RM7.4 trillion and continued to show growth in line with the increase in Muslim population, which currently stood at 1.6 billion.
He said that in Malaysia alone, the industry was valued at RM28.9 billion.
"This growth is not only due to the need to fulfil religious obligation but also due to the fact that the halal industry itself is a powerful market force," he said.
Speaking to reporters later, Musa attributed the lack of participation among Muslim entrepreneurs in the halal industry to the lack of awareness on its potentials.
He called on Muslim entrepreneurs to change their perception and view the industry as a source for growth.
-- BERNAMA
Muslim's Involvement In Halal Industry Still Low: Musa
TAWAU, May 17 (Bernama) -- The number of Muslim entrepreneurs embarking in the halal industry in Sabah is still low compared to the non-Muslims despite the industry's huge potential, Chief Minister Datuk Seri Musa Aman said.
He said that at the moment, non-Muslim entrepreneurs controlled about 80 per cent of the industry.
"Muslim entrepreneurs should therefore venture into the industry in a big way," he said when opening the state-level halal industry exhibition and seminar here Sunday.
The two-day seminar, which also attracted participants from Brunei and Indonesia, is organised by the Standard Malaysia and Sabah Economic Development Corporation.
Musa said the global halal industry's annual worth is RM7.4 trillion and continued to show growth in line with the increase in Muslim population, which currently stood at 1.6 billion.
He said that in Malaysia alone, the industry was valued at RM28.9 billion.
"This growth is not only due to the need to fulfil religious obligation but also due to the fact that the halal industry itself is a powerful market force," he said.
Speaking to reporters later, Musa attributed the lack of participation among Muslim entrepreneurs in the halal industry to the lack of awareness on its potentials.
He called on Muslim entrepreneurs to change their perception and view the industry as a source for growth.
-- BERNAMA
Sunday, May 10, 2009
Islamic finance must boost regulation, professional staff: experts
Agence France-Presse - 5/10/2009 3:16 AM GMT
Islamic finance must boost regulation, professional staff: experts
Islamic finance must strengthen regulation, boost its professional staff and diversify as it takes on a bigger global role in the aftermath of the worldwide financial crisis, experts said.
Financial products compliant with Islamic shariah law are likely to gain in popularity as investors seek safer havens after the ruin caused by toxic derivatives sold globally by mainstream Western banks, they said.
However, experts warn that Islamic financial institutions must be on their guard against falling into the same unbridled excesses that jolted Wall Street and snowballed into a global economic downturn.
"Islamic finance is not immune from such pitfalls. Hence we must be careful to avoid this error in the Islamic financial industry," said Muhammad Sulaiman Al-Jasser, governor of the Saudi Arabian Monetary Agency.
"Islamic financial institutions are continuing to invest time and effort to improve corporate governance and risk management and I expect that they will continue to avoid mistakes made in designing over-complicated securities."
He and other experts were speaking at a recent meeting of the Islamic Financial Services Board held in Singapore, which is aiming to be a key player in Islamic finance.
Islamic banking has been left relatively unscathed by the global financial crisis, largely because of rules forbidding engagement in the kind of risky business that sank mainstream institutions like Lehman Brothers.
Islamic shariah law bars the payment and collection of interest, which is seen as a form of gambling.
Islamic finance also operates on the principle of risk-sharing between the issuing bank and the buyer of a financial product, making it a less risky alternative to some conventional banking instruments.
Al-Jasser, the Saudi monetary agency governor, and other speakers told the Singapore conference that Islamic finance is likely to gather momentum in the aftermath of the downturn.
"It is my belief that Islamic finance has moved on to a new stage in the last few years. In the past, it was an individual decision based on faith, now it is competing on its own very strong merits in the global marketplace," he said.
Islamic finance is now established in 47 countries with more than 600 institutions managing "balance-sheet assets" worth over 630 billion US dollars, with another 200 billion to 300 billion dollars managed as investment funds, he added.
Heng Swee Keat, managing director of the Monetary Authority of Singapore, said more Asian countries are using Islamic finance to fund infrastructure projects.
Issuance of Islamic bonds, called sukuk, in Asian currencies totalled 64.3 billion dollars in 2008, down 1.5 percent from 2007 when it expanded by 50 percent over the year before, Moody's Investor Service said this month.
But the industry has much room for growth as Islamic finance represents only 1.0 percent of the total assets held by the global financial markets, experts said.
Ahmad Mohamed Ali, president of the Islamic Development Bank, urged the industry to offer a wider range of financial services, noting that commercial banking accounts for more than 70 percent of shariah-compliant assets.
"There is a need for major investment banks that provide a different model of investment banking, a model that is able to have positive impact on economic growth without compromising stability and resilience," he told the meeting.
"We also need varieties of venture capital institutions, small and medium financing institutions specialised in financing, leasing, etc," he added.
As global regulatory bodies revise financial regulations to prevent future financial crises, Islamic regulatory and accounting standards must also improve, Ahmad said.
While the previous approach focused on regulating individual Islamic financial institutions, regulatory bodies should now adopt a comprehensive strategy to address both macro- and micro-economic issues.
Muliaman Hadad, deputy governor of the Bank of Indonesia, said one of the key challenges is producing much-needed professional staff to deal with shariah-compliant financial products.
Indonesia, the world's most populous Muslim nation, will also launch an education campaign across the country to help people -- including bankers, bureaucrats, students and religious leaders -- understand Islamic finance better.
Tunc Tahsin Uyanic, a sector manager for the World Bank in the East Asia and Pacific Region, offered the bank's assistance in personnel training, education, policy direction, development of new financial instruments and regulation.
Islamic finance must boost regulation, professional staff: experts
Islamic finance must strengthen regulation, boost its professional staff and diversify as it takes on a bigger global role in the aftermath of the worldwide financial crisis, experts said.
Financial products compliant with Islamic shariah law are likely to gain in popularity as investors seek safer havens after the ruin caused by toxic derivatives sold globally by mainstream Western banks, they said.
However, experts warn that Islamic financial institutions must be on their guard against falling into the same unbridled excesses that jolted Wall Street and snowballed into a global economic downturn.
"Islamic finance is not immune from such pitfalls. Hence we must be careful to avoid this error in the Islamic financial industry," said Muhammad Sulaiman Al-Jasser, governor of the Saudi Arabian Monetary Agency.
"Islamic financial institutions are continuing to invest time and effort to improve corporate governance and risk management and I expect that they will continue to avoid mistakes made in designing over-complicated securities."
He and other experts were speaking at a recent meeting of the Islamic Financial Services Board held in Singapore, which is aiming to be a key player in Islamic finance.
Islamic banking has been left relatively unscathed by the global financial crisis, largely because of rules forbidding engagement in the kind of risky business that sank mainstream institutions like Lehman Brothers.
Islamic shariah law bars the payment and collection of interest, which is seen as a form of gambling.
Islamic finance also operates on the principle of risk-sharing between the issuing bank and the buyer of a financial product, making it a less risky alternative to some conventional banking instruments.
Al-Jasser, the Saudi monetary agency governor, and other speakers told the Singapore conference that Islamic finance is likely to gather momentum in the aftermath of the downturn.
"It is my belief that Islamic finance has moved on to a new stage in the last few years. In the past, it was an individual decision based on faith, now it is competing on its own very strong merits in the global marketplace," he said.
Islamic finance is now established in 47 countries with more than 600 institutions managing "balance-sheet assets" worth over 630 billion US dollars, with another 200 billion to 300 billion dollars managed as investment funds, he added.
Heng Swee Keat, managing director of the Monetary Authority of Singapore, said more Asian countries are using Islamic finance to fund infrastructure projects.
Issuance of Islamic bonds, called sukuk, in Asian currencies totalled 64.3 billion dollars in 2008, down 1.5 percent from 2007 when it expanded by 50 percent over the year before, Moody's Investor Service said this month.
But the industry has much room for growth as Islamic finance represents only 1.0 percent of the total assets held by the global financial markets, experts said.
Ahmad Mohamed Ali, president of the Islamic Development Bank, urged the industry to offer a wider range of financial services, noting that commercial banking accounts for more than 70 percent of shariah-compliant assets.
"There is a need for major investment banks that provide a different model of investment banking, a model that is able to have positive impact on economic growth without compromising stability and resilience," he told the meeting.
"We also need varieties of venture capital institutions, small and medium financing institutions specialised in financing, leasing, etc," he added.
As global regulatory bodies revise financial regulations to prevent future financial crises, Islamic regulatory and accounting standards must also improve, Ahmad said.
While the previous approach focused on regulating individual Islamic financial institutions, regulatory bodies should now adopt a comprehensive strategy to address both macro- and micro-economic issues.
Muliaman Hadad, deputy governor of the Bank of Indonesia, said one of the key challenges is producing much-needed professional staff to deal with shariah-compliant financial products.
Indonesia, the world's most populous Muslim nation, will also launch an education campaign across the country to help people -- including bankers, bureaucrats, students and religious leaders -- understand Islamic finance better.
Tunc Tahsin Uyanic, a sector manager for the World Bank in the East Asia and Pacific Region, offered the bank's assistance in personnel training, education, policy direction, development of new financial instruments and regulation.
Saturday, May 9, 2009
Is global money good for Asia?
Saturday May 9, 2009
Is global money good for Asia?
Think Asian by Andrew Sheng
THE world has certainly changed when two friends, one from the United States and one from Britain, suddenly sent me an email to ask what I thought of People’s Bank of China Governor Zhou Xiaochuan’s call for a global currency.
Of course, the blogspace amongst financial specialists went into a hyper-frenzy of analysis whether the US dollar was in decline, but my friends are not finance people – one a doctor, the other a retiree. Ordinary people were clearly concerned. I could not answer immediately because I had to first read Governor Zhou’s paper carefully.
One investment bank research analysis suggested that the People’s Bank is doing a series of research papers on global finance and this was the first of the think-pieces.
Because of her size, China has to move from the mindset of an emerging market economy to a major player in the global financial architecture with global social responsibilities.
The question that Governor Zhou posed is an excellent one – whether we should have a national currency, such as the US dollar, as the global reserve currency, or whether we should have a global currency, issued by a global authority, not one single nation.
This question is known as the Triffin Dilemma, named after Belgian Yale Professor Robert Triffin, who became a US citizen and one of the best international economists in the 1960s.
He was looking into the question whether the US, as the dominant economic power, could sustain the role of the US dollar at a time when she began to run current account and fiscal deficits in the 1960s due to the cost of the Vietnam War.
This was the period when the US dollar was still fixed to gold at the price of US$35 per ounce and the US held the largest gold reserves in the world. French President De Gaulle got into trouble with the United States in the 1960s when he insisted on being paid in gold rather than in dollars.
But in 1971, when the deficits did get too large, the US abandoned the linkage to gold and floated the currency, which also led to the high inflation in the 1970s that was only ended when Paul Volcker, then chairman of the Federal Reserve Bank, decided to use high interest rates to squeeze inflation expectations out of the US economy.
That recession helped improve US productivity and prepared the US for the long run of growth in the 1990s. The replacement of gold with paper currency solved one major problem. If the supply of gold is fixed, whilst the global economy is growing, then prices will be deflationary – meaning that prices of goods relative to gold will shrink.
Ideally, to have no inflation, the supply of gold must grow at the same rate as the rate of global goods production. Thus, using a gold standard benefited the gold producing countries, but not the rest of the world.
However, if a national currency replaced gold, then the rate of increase in the national currency should be the same as global growth in order to maintain global liquidity and stable inflation.
The issuing nation benefits from the seigniorage from the issue – meaning that the country could earn from the interest rate earned on the currency issue, since the cost of printing money was almost zero.
The Triffin Dilemma is that if the issuing country’s inflation rate is different from the rest of the world, then to maintain global liquidity, the issuing country’s monetary policy must fit global conditions, rather than national conditions.
Such a global role can have its benefits, because of the seigniorage profits, but it can be highly costly if the issuing country has to print money not for itself, but for the rest of the world. Thus, a global issuer has to sacrifice its own national interests for global interest, and it is rewarded by seigniorage and the inflow of foreign funds.
The global issuer then becomes the global bank, because it has to run by definition a current account deficit equivalent to the amount of additional liquidity that the rest of the world needs.
This is the true origin of the Global Imbalance. The real risk is that the issuing country runs too large an imbalance and then the lending countries will take away their funds, causing massive devaluation and a global deflation.
Thus, the Global Imbalance is really the direct result of Global Money and Global Governance. I always felt that the position of the US Federal Reserve is in reality the central bank of the world, because as long as the US dollar is a global reserve currency, the Fed has to be the US dollar lender of last resort.
The Asian region was a dollar region until 1997, because we all believed in the US dollar. When the Fed refused to be the dollar lender of last resort during the Asian crisis, this meant that Asians could not depend on the US as a banker to borrow from in times of crisis. The only logical conclusion was to build up sufficient reserves and not to depend on foreigners. The self insurance after the Asian crisis worsened the Global Imbalance. If the Fed is not the global banker, can the IMF be the global banker? I shall answer this in another article.
·Datuk Seri Panglima Andrew Sheng is adjunct professor at Universiti Malaya, Kuala Lumpur, and Tsinghua University, Beijing. He has served as adviser and chief economist to Bank Negara, deputy chief executive of the Hong Kong Monetary Authority and chairman of the Hong Kong Securities and Futures Commission.
Is global money good for Asia?
Think Asian by Andrew Sheng
THE world has certainly changed when two friends, one from the United States and one from Britain, suddenly sent me an email to ask what I thought of People’s Bank of China Governor Zhou Xiaochuan’s call for a global currency.
Of course, the blogspace amongst financial specialists went into a hyper-frenzy of analysis whether the US dollar was in decline, but my friends are not finance people – one a doctor, the other a retiree. Ordinary people were clearly concerned. I could not answer immediately because I had to first read Governor Zhou’s paper carefully.
One investment bank research analysis suggested that the People’s Bank is doing a series of research papers on global finance and this was the first of the think-pieces.
Because of her size, China has to move from the mindset of an emerging market economy to a major player in the global financial architecture with global social responsibilities.
The question that Governor Zhou posed is an excellent one – whether we should have a national currency, such as the US dollar, as the global reserve currency, or whether we should have a global currency, issued by a global authority, not one single nation.
This question is known as the Triffin Dilemma, named after Belgian Yale Professor Robert Triffin, who became a US citizen and one of the best international economists in the 1960s.
He was looking into the question whether the US, as the dominant economic power, could sustain the role of the US dollar at a time when she began to run current account and fiscal deficits in the 1960s due to the cost of the Vietnam War.
This was the period when the US dollar was still fixed to gold at the price of US$35 per ounce and the US held the largest gold reserves in the world. French President De Gaulle got into trouble with the United States in the 1960s when he insisted on being paid in gold rather than in dollars.
But in 1971, when the deficits did get too large, the US abandoned the linkage to gold and floated the currency, which also led to the high inflation in the 1970s that was only ended when Paul Volcker, then chairman of the Federal Reserve Bank, decided to use high interest rates to squeeze inflation expectations out of the US economy.
That recession helped improve US productivity and prepared the US for the long run of growth in the 1990s. The replacement of gold with paper currency solved one major problem. If the supply of gold is fixed, whilst the global economy is growing, then prices will be deflationary – meaning that prices of goods relative to gold will shrink.
Ideally, to have no inflation, the supply of gold must grow at the same rate as the rate of global goods production. Thus, using a gold standard benefited the gold producing countries, but not the rest of the world.
However, if a national currency replaced gold, then the rate of increase in the national currency should be the same as global growth in order to maintain global liquidity and stable inflation.
The issuing nation benefits from the seigniorage from the issue – meaning that the country could earn from the interest rate earned on the currency issue, since the cost of printing money was almost zero.
The Triffin Dilemma is that if the issuing country’s inflation rate is different from the rest of the world, then to maintain global liquidity, the issuing country’s monetary policy must fit global conditions, rather than national conditions.
Such a global role can have its benefits, because of the seigniorage profits, but it can be highly costly if the issuing country has to print money not for itself, but for the rest of the world. Thus, a global issuer has to sacrifice its own national interests for global interest, and it is rewarded by seigniorage and the inflow of foreign funds.
The global issuer then becomes the global bank, because it has to run by definition a current account deficit equivalent to the amount of additional liquidity that the rest of the world needs.
This is the true origin of the Global Imbalance. The real risk is that the issuing country runs too large an imbalance and then the lending countries will take away their funds, causing massive devaluation and a global deflation.
Thus, the Global Imbalance is really the direct result of Global Money and Global Governance. I always felt that the position of the US Federal Reserve is in reality the central bank of the world, because as long as the US dollar is a global reserve currency, the Fed has to be the US dollar lender of last resort.
The Asian region was a dollar region until 1997, because we all believed in the US dollar. When the Fed refused to be the dollar lender of last resort during the Asian crisis, this meant that Asians could not depend on the US as a banker to borrow from in times of crisis. The only logical conclusion was to build up sufficient reserves and not to depend on foreigners. The self insurance after the Asian crisis worsened the Global Imbalance. If the Fed is not the global banker, can the IMF be the global banker? I shall answer this in another article.
·Datuk Seri Panglima Andrew Sheng is adjunct professor at Universiti Malaya, Kuala Lumpur, and Tsinghua University, Beijing. He has served as adviser and chief economist to Bank Negara, deputy chief executive of the Hong Kong Monetary Authority and chairman of the Hong Kong Securities and Futures Commission.
Thrust for global zakat fund initiatives
Saturday May 9, 2009
Thrust for global zakat fund initiatives
By CECILIA KOK
BMB Group Ltd is not a particularly familiar name to many of us. Although the Cayman Islands-based company is a prestigious asset management and financial services provider with a global presence, it has not been very visible since its establishment in 2004.
The reason is the company serves mainly a very discreet group of clientele, providing an Islamic investment platform to some of the most significant ruling families, sovereign wealth institutions, ultra-high net worth individuals and institutions from the Islamic world. The company could almost be likened to an “exclusive club” for the super elite group.
Nevertheless, BMB Group’s presence in Malaysia is increasingly being felt since it forged a partnership with the International Zakat Organisation (IZO) in February this year to establish and co-manage a global zakat and charity fund. The IZO is a key charitable body of the Organisation of the Islamic Conference (OIC), which will oversee the management of the fund by BMB Group.
As part of the initiative, BMB Group will be setting up an Islamic asset management company in Malaysia, and that will be launched in August.
Dr Humayon Dar, the chief executive officer of one of the group’s subsidiaries, BMB Islamic, told StarBizWeek in a recent interview that the launching date is to coincide with Ramadhan to add more meaning to the global zakat and charity fund initiative. This is because Ramadhan, which marks the fasting month for Muslims, is when believers normally pay their tithes.
The medium-term target size for the global zakat and charity fund is US$3bil. But for the first closing, which is expected to be 12 months after the launch of the fund, BMB aims to raise up to US$750mil for the fund.
According to Dar, the funds will be collected from Muslim sources in different parts of the world, including Malaysia, both on the government and private sector levels. And the group will manage the fund on behalf of the targeted beneficiaries.
The fund will invest in four sectors within the 57 country members of the OIC. Of these sectors, three concern investment activities and one is for contributions towards emergency and relief.
Dar reveals that the fund’s investment activities will focus on global equities that are syariah-compliant, income-generating activities for the beneficiaries of the zakat money in the form of microfinance and private equities, as well as the development of social enterprises relating to health, education and housing. But the basic objective of the fund is still capital preservation.
“When you attempt to preserve capital, you cannot be aiming for very high returns,” Dar says, nevertheless, expressing confidence that the group could generate commendable returns from its investment activities.
BMB Group is eyeing for a rate of return of between 15% and 20%. The returns on its investment, Dar explains, will be channelled towards the fund’s fourth function, that is, emergency and relief.
On how the company quantifies the social benefits of the global zakat and charity fund initiative, Dar says the company is aiming for a social return rate in the range of 50% to 75% back to the community.
BMB Group has embarked on an acquisition trail since the end of last year when it bought US private equity firm EMP Group, which is focused on investing in emerging markets.
According to Dar, BMB Group is considering several other options and it is open to acquiring other quality assets that are available at the right prices.
“Being cash rich enables us to do that,” he says, adding that the company is also planning to set up a private equity platform for the region.
Thrust for global zakat fund initiatives
By CECILIA KOK
BMB Group Ltd is not a particularly familiar name to many of us. Although the Cayman Islands-based company is a prestigious asset management and financial services provider with a global presence, it has not been very visible since its establishment in 2004.
The reason is the company serves mainly a very discreet group of clientele, providing an Islamic investment platform to some of the most significant ruling families, sovereign wealth institutions, ultra-high net worth individuals and institutions from the Islamic world. The company could almost be likened to an “exclusive club” for the super elite group.
Nevertheless, BMB Group’s presence in Malaysia is increasingly being felt since it forged a partnership with the International Zakat Organisation (IZO) in February this year to establish and co-manage a global zakat and charity fund. The IZO is a key charitable body of the Organisation of the Islamic Conference (OIC), which will oversee the management of the fund by BMB Group.
As part of the initiative, BMB Group will be setting up an Islamic asset management company in Malaysia, and that will be launched in August.
Dr Humayon Dar, the chief executive officer of one of the group’s subsidiaries, BMB Islamic, told StarBizWeek in a recent interview that the launching date is to coincide with Ramadhan to add more meaning to the global zakat and charity fund initiative. This is because Ramadhan, which marks the fasting month for Muslims, is when believers normally pay their tithes.
The medium-term target size for the global zakat and charity fund is US$3bil. But for the first closing, which is expected to be 12 months after the launch of the fund, BMB aims to raise up to US$750mil for the fund.
According to Dar, the funds will be collected from Muslim sources in different parts of the world, including Malaysia, both on the government and private sector levels. And the group will manage the fund on behalf of the targeted beneficiaries.
The fund will invest in four sectors within the 57 country members of the OIC. Of these sectors, three concern investment activities and one is for contributions towards emergency and relief.
Dar reveals that the fund’s investment activities will focus on global equities that are syariah-compliant, income-generating activities for the beneficiaries of the zakat money in the form of microfinance and private equities, as well as the development of social enterprises relating to health, education and housing. But the basic objective of the fund is still capital preservation.
“When you attempt to preserve capital, you cannot be aiming for very high returns,” Dar says, nevertheless, expressing confidence that the group could generate commendable returns from its investment activities.
BMB Group is eyeing for a rate of return of between 15% and 20%. The returns on its investment, Dar explains, will be channelled towards the fund’s fourth function, that is, emergency and relief.
On how the company quantifies the social benefits of the global zakat and charity fund initiative, Dar says the company is aiming for a social return rate in the range of 50% to 75% back to the community.
BMB Group has embarked on an acquisition trail since the end of last year when it bought US private equity firm EMP Group, which is focused on investing in emerging markets.
According to Dar, BMB Group is considering several other options and it is open to acquiring other quality assets that are available at the right prices.
“Being cash rich enables us to do that,” he says, adding that the company is also planning to set up a private equity platform for the region.
Hire purchase – give the true picture
Saturday May 9, 2009
Hire purchase – give the true picture
By DALJIT DHESI
LEON Lim, a young business executive with a multinational company in Kuala Lumpur, recently bought his dream car, which he will finance through hire purchase. He took a five-year loan based on new rates averaging 3.25%. From the surface, the rates looked fairly attractive.
After talking to his financial planner, he was shocked to discover that the actual or effective interest rate he was paying for the loan was in fact far higher than what was quoted to him at the onset. Truth is, Lim is one of the many others who are infuriated that they have been grossly misled. An analyst from a bank-backed brokerage said the practice of banks quoting “misleading” hire purchase rates is burdensome to consumers who are already grappling with tough times.
In addition, last month, the hire-purchase interest rates for new non-national cars increased by about one percentage point to 3.25% for loan tenures of five years and below, 3.4% for six to seven years and 3.5% for eight- to nine-year loans.
Jeremy Tan
The question is – how relevant is the 40 year old Hire Purchase Act (HPA) today and should it be reviewed or scrapped altogether?
Jeremy Tan, a licensed financial adviser with Standard Financial Planner Sdn Bhd, says with the changing financial landscape and competitiveness, the Act ought to be reviewed periodically to meet the challenges of the market place.
For purpose of transparency, he says in addition to quoting the hire purchase rate (which is normally on a flat basis), the effective interest rate (on an annualised basis) should also be revealed up front.
This will ensure that the borrower is fully aware of the financial obligation when opting for hire purchase financing.
“For example, a hire purchase rate of 3% per annum for a period of 5 years of financing carries an effective interest rate of 5.75%. Similarly for a rate of 5%, the effective interest rate charged is 9.25% for the same period!,” he says.
It should be noted that an amendment was made to the Act in 2005 to allow for the variable rate. For ensuring better transparency, the financier is obliged to state the annual percentage rate which is the effective rate in the second schedule of the Act (regardless whether the higher purchase facility is on fixed rate or variable rate basis).
Yeah Kim Leng
“The reason why the rates charged for hire purchase are higher than mortgage rates is because the risk level of the assets held by the bank as collateral is higher. The higher the risk for the bank, the higher the cost for consumers.
Essentially, there are two types of hire purchase interest rates – the flat and variable rates – which hirers can choose from. For the variable rate, interest repayments vary according to the movement of the base lending rate (BLR). If the BLR increases, the term charges will also increase, resulting in higher monthly instalments and vice versa.
The variable rate is less popular among consumers because of the unpredictability in the movement of the BLR compared with the fixed rate which remains the same throughout the tenure of the loan.
The Consumers Association of Penang (CAP) president SM Mohamed Idris, who has called for the Act to be amended, says quoting the effective interest rate will help consumers make informed decisions on their borrowings.
“Not quoting the effective interest rate is misleading,” he says.
Mohamed Idris also advocates the setting up of a comprehensive Consumer Credit Act that covers all credit facilities.
RAM Holdings Bhd chief economist Dr Yeah Kim Leng says the Act needs to be updated to reflect the current needs of consumers and agrees consumers should be provided both rates to compare with alternative financing modes such as a motor vehicle loan and so forth.
Until the Act gets reviewed however, there will be many who will continue to face the dilemma faced by Lim.
Hire purchase – give the true picture
By DALJIT DHESI
LEON Lim, a young business executive with a multinational company in Kuala Lumpur, recently bought his dream car, which he will finance through hire purchase. He took a five-year loan based on new rates averaging 3.25%. From the surface, the rates looked fairly attractive.
After talking to his financial planner, he was shocked to discover that the actual or effective interest rate he was paying for the loan was in fact far higher than what was quoted to him at the onset. Truth is, Lim is one of the many others who are infuriated that they have been grossly misled. An analyst from a bank-backed brokerage said the practice of banks quoting “misleading” hire purchase rates is burdensome to consumers who are already grappling with tough times.
In addition, last month, the hire-purchase interest rates for new non-national cars increased by about one percentage point to 3.25% for loan tenures of five years and below, 3.4% for six to seven years and 3.5% for eight- to nine-year loans.
Jeremy Tan
The question is – how relevant is the 40 year old Hire Purchase Act (HPA) today and should it be reviewed or scrapped altogether?
Jeremy Tan, a licensed financial adviser with Standard Financial Planner Sdn Bhd, says with the changing financial landscape and competitiveness, the Act ought to be reviewed periodically to meet the challenges of the market place.
For purpose of transparency, he says in addition to quoting the hire purchase rate (which is normally on a flat basis), the effective interest rate (on an annualised basis) should also be revealed up front.
This will ensure that the borrower is fully aware of the financial obligation when opting for hire purchase financing.
“For example, a hire purchase rate of 3% per annum for a period of 5 years of financing carries an effective interest rate of 5.75%. Similarly for a rate of 5%, the effective interest rate charged is 9.25% for the same period!,” he says.
It should be noted that an amendment was made to the Act in 2005 to allow for the variable rate. For ensuring better transparency, the financier is obliged to state the annual percentage rate which is the effective rate in the second schedule of the Act (regardless whether the higher purchase facility is on fixed rate or variable rate basis).
Yeah Kim Leng
“The reason why the rates charged for hire purchase are higher than mortgage rates is because the risk level of the assets held by the bank as collateral is higher. The higher the risk for the bank, the higher the cost for consumers.
Essentially, there are two types of hire purchase interest rates – the flat and variable rates – which hirers can choose from. For the variable rate, interest repayments vary according to the movement of the base lending rate (BLR). If the BLR increases, the term charges will also increase, resulting in higher monthly instalments and vice versa.
The variable rate is less popular among consumers because of the unpredictability in the movement of the BLR compared with the fixed rate which remains the same throughout the tenure of the loan.
The Consumers Association of Penang (CAP) president SM Mohamed Idris, who has called for the Act to be amended, says quoting the effective interest rate will help consumers make informed decisions on their borrowings.
“Not quoting the effective interest rate is misleading,” he says.
Mohamed Idris also advocates the setting up of a comprehensive Consumer Credit Act that covers all credit facilities.
RAM Holdings Bhd chief economist Dr Yeah Kim Leng says the Act needs to be updated to reflect the current needs of consumers and agrees consumers should be provided both rates to compare with alternative financing modes such as a motor vehicle loan and so forth.
Until the Act gets reviewed however, there will be many who will continue to face the dilemma faced by Lim.
Support for more R and D
Saturday May 9, 2009
Support for more Research and Development
TAN Sri Lin See-Yan’s article invokes much interest and he is right in stressing that there should be greater focus and effort in research and development (R&D) during this economic downturn, to capitalise on demand upon recovery.
However, R&D requires funds. The small and medium enterprises (SMEs), which form the industrial backbone in our country, have limited reserves or budgets for this purpose.
As such, the Government should be more liberal in handing out grants towards this end to industrial enterprises which are able to prove their commitment.
Tan Sri rightly stated the case of GE (General Electric) which lost out to competitors which developed a new generation of lighting – LEDs – which are energy efficient.
LED lighting holds great promise to replace conventional lighting and in fact is being adopted around the world today.
It enables energy savings of up to 90% and is environmentally friendly; it has a long life of up to 50,000 hours (11 years on 12-hour daily usage).
Los Angeles city has announced a decision to replace all 140,000 street lights with LED lights over a five-year period.
The iconic Empire State Building is being retrofitted with energy efficient lights.
Initiatives to reduce carbon footprints or carbon emissions by reducing energy usage, to mitigate climate change, are in place in various countries. Incandescent bulbs have been phased out in Australia, and the European Union, United States and India have also announced plans to phase it out soon.
There are enterprises in this country involved in R&D-backed manufacturing, which can develop state-of-the-art products, if they have access to funds.
An example is Powermicro Technology Sdn Bhd which develops and manufactures LED lightings in Shah Alam.
As a private SME venture, funds for this R&D is limited, hence its product development programme has been slow.
Malaysian engineers are world class and capable of high quality R&D, on par with the best in the West and Japan.
What Malaysian SMEs need is sufficient funding to acquire equipment and enlarge the engineering team, thereby raising R&D capacity to bring out results at a faster pace.
Datuk Eddie Seow
CEO, Powermicro Technology Sdn Bhd
Shah Alam
Support for more Research and Development
TAN Sri Lin See-Yan’s article invokes much interest and he is right in stressing that there should be greater focus and effort in research and development (R&D) during this economic downturn, to capitalise on demand upon recovery.
However, R&D requires funds. The small and medium enterprises (SMEs), which form the industrial backbone in our country, have limited reserves or budgets for this purpose.
As such, the Government should be more liberal in handing out grants towards this end to industrial enterprises which are able to prove their commitment.
Tan Sri rightly stated the case of GE (General Electric) which lost out to competitors which developed a new generation of lighting – LEDs – which are energy efficient.
LED lighting holds great promise to replace conventional lighting and in fact is being adopted around the world today.
It enables energy savings of up to 90% and is environmentally friendly; it has a long life of up to 50,000 hours (11 years on 12-hour daily usage).
Los Angeles city has announced a decision to replace all 140,000 street lights with LED lights over a five-year period.
The iconic Empire State Building is being retrofitted with energy efficient lights.
Initiatives to reduce carbon footprints or carbon emissions by reducing energy usage, to mitigate climate change, are in place in various countries. Incandescent bulbs have been phased out in Australia, and the European Union, United States and India have also announced plans to phase it out soon.
There are enterprises in this country involved in R&D-backed manufacturing, which can develop state-of-the-art products, if they have access to funds.
An example is Powermicro Technology Sdn Bhd which develops and manufactures LED lightings in Shah Alam.
As a private SME venture, funds for this R&D is limited, hence its product development programme has been slow.
Malaysian engineers are world class and capable of high quality R&D, on par with the best in the West and Japan.
What Malaysian SMEs need is sufficient funding to acquire equipment and enlarge the engineering team, thereby raising R&D capacity to bring out results at a faster pace.
Datuk Eddie Seow
CEO, Powermicro Technology Sdn Bhd
Shah Alam
Saturday, May 2, 2009
Bizspark for webdinargroup
bzsadmin@microsoft.com to borhann
show details Apr 13 Reply
Dear Borhannudin Mohamed,
You have been invited to join the Microsoft BizSpark program.
To accept the invitation and signup, please go to:
http://www.microsoft.com/BizSpark/
If you have any questions, please contact us. We’ll be happy to help. (This message comes from an unmonitored alias. Please do not reply directly.)
The BizSpark Team
Microsoft Corporation
One Microsoft Way
Redmond, WA 98052
© 2008 Microsoft Corporation. All rights reserved. Microsoft is either a registered trademark or trademark of Microsoft Corporation in the United States and/or other countries.
show details Apr 13 Reply
Dear Borhannudin Mohamed,
You have been invited to join the Microsoft BizSpark program.
To accept the invitation and signup, please go to:
http://www.microsoft.com/BizSpark/
If you have any questions, please contact us. We’ll be happy to help. (This message comes from an unmonitored alias. Please do not reply directly.)
The BizSpark Team
Microsoft Corporation
One Microsoft Way
Redmond, WA 98052
© 2008 Microsoft Corporation. All rights reserved. Microsoft is either a registered trademark or trademark of Microsoft Corporation in the United States and/or other countries.
Webdinar background
Webdinar background
The idea for this business is conceived approximately two years ago by its founder, Borhannudin Mohamed. The idea and concept was inspired during his research about peace where he has called for peace in Palestine - and peace in Palestine is peace to the world. Invasion on the Muslim land has allowed loads of gold, oil, other mineral and commodity resources shifted to the land of the regime. Today, the regime has called themselves the super powers and they are manipulating the world to use US dollar in international trade. This is one of their propaganda and it has created chaos in the world economy. The regime themselves has planted the seed of destruction that is now destroying their own economy. Borhannudin believes the return of the gold dinar will put the world economy back to normal. Furthermore, it will bring harmony and prosperity.
The idea for this business is conceived approximately two years ago by its founder, Borhannudin Mohamed. The idea and concept was inspired during his research about peace where he has called for peace in Palestine - and peace in Palestine is peace to the world. Invasion on the Muslim land has allowed loads of gold, oil, other mineral and commodity resources shifted to the land of the regime. Today, the regime has called themselves the super powers and they are manipulating the world to use US dollar in international trade. This is one of their propaganda and it has created chaos in the world economy. The regime themselves has planted the seed of destruction that is now destroying their own economy. Borhannudin believes the return of the gold dinar will put the world economy back to normal. Furthermore, it will bring harmony and prosperity.
Webdinar.com ,Key personnel
Key Personnel Profile
Borhannudin bin Mohamed - Group Chairman & Founder
Borhanuddin Bin Mohamed, aged 53, holds a M.Sc. in E-Commerce from Middlesex University. He is one of the co-founder of Malay Chamber of Commerce Putrajaya. He is an experienced businessman, having been executive chairman for several businesses that covers government contract, furniture, properties and development, food and beverages, oil and gas, construction, and education. He has also vast experienced in tourism and travel industry and was once the Public Relation Manager in Hyatt Kuantan.
Dr. Hailaini bin Mujitahir - Syariah Advisor
Dr. Hailaini bin Mujitahir, aged 63, received his first degree in Shari’ah from Universiti Kebangsaan Malaysia (UKM) in 1974 and obtained his PhD from University of Aberdeen, United Kingdom in 1988. Currently, he is an Associate Professor attached to Faculty of Al-Quran and Sunnah, UKM till present. In UKM he taught Muamalat Banking and Finance courses for both academic and professional programs including Master and doctoral Degree Courses. He has published more than 10 articles in various academic books and presented more than 100 papers in various academic journals and related academic literature.
He is currently the member of the Shari’ah Advisory Council of Affin Islamic Bank, PAB Unit Trust Management Bhd, Takaful Nasional Sdn Bhd, Ampro Holding Singapore, Apex Unit Trust, Commerce Asset Fund Managers Sdn Bhd and also the member of the Shari’ah Advisory Council of Securities Commission of Malaysia. He is also the Board members of Kolej Universiti Islam Antarabangsa Selangor. He was conferred “Tokoh Zakat Negeri Selangor 1997” and “Tokoh Maal Hijrah Negeri Selangor” in 2005 respectively.
Abd Aziz bin Ahmad - Group Chief Operating Officer
Abd Aziz bin Ahmad, aged 47, holds a BBA Finance and MBA majoring in Applied Finance from Universiti Kebangsaan Malaysia (UKM). He has wide knowledge and experienced in banking industry practices specialized in corporate and retail finance. He has served with various financial institutions for the past 17 years. Over the years within the Islamic Banking industries, he has been actively engaged in Islamic Banking products, services and operational issues related to Syariah matters.
He is currently attached to the Malaysian-Saudi Arabia Business Council as the Head of Finance and Investment, an NGO under the patronage of the Prime Minister Department.
Zulkifli bin Ab. Latif - Group Chief Finance Officer
Zulkifli bin Ab. Latif, aged 43, holds a Diploma in Banking Studies from UiTM and MBA from Atlantic International University, USA. Currently, he managed an IT business, ranging from computer hardware, software, networking, web design and consultancy. He is also an associate consultant at Asian Institute of Management Sciences, AES Open Learning and K-Professional Development Academy. Currently, he is the Chairman of the IT Bureau, Malay Chamber of Commerce Putrajaya.
While working at a previous organization, he was the advisor of the Financing Product Committee, Krung Thai Shariah Bank, Thailand in 2003. A year before that, he managed the training and implementation of Ar-Rahnu (Islamic Pawn Broking) product under the Micro-Financing Scheme for Islamic Development Bank, Brunei. Earlier, while working with a local bank, Zulkifli was involved in the planning and execution of the blueprint for the interest-free banking products and services. He also conducted research and development, formulating controls and reporting, training and managing the interest-free banking investment portfolio. Besides that, he was responsible for marketing and creating product awareness on interest-free banking products and services among existing and potential clients of the bank.
Irma Indayu binti Omar - Group Corporate Communications Officer
Irma Indayu binti Omar, aged 40, hold a bachelor degree in Linguistics and Literature from National University Jakarta, a Master in Library and Information Science from International Islamic University Malaysia and a Master in Corporate Communications from University Putra Malaysia. She has 15 years experience working in corporate, public and academic libraries. She is responsible for developing the library network in Putrajaya.
Irma is well versed in information management, searching and retrieval. She is also a freelance writer, editor and translator. She has written two books in library and information science and edited 15 books in various subjects.
Borhannudin bin Mohamed - Group Chairman & Founder
Borhanuddin Bin Mohamed, aged 53, holds a M.Sc. in E-Commerce from Middlesex University. He is one of the co-founder of Malay Chamber of Commerce Putrajaya. He is an experienced businessman, having been executive chairman for several businesses that covers government contract, furniture, properties and development, food and beverages, oil and gas, construction, and education. He has also vast experienced in tourism and travel industry and was once the Public Relation Manager in Hyatt Kuantan.
Dr. Hailaini bin Mujitahir - Syariah Advisor
Dr. Hailaini bin Mujitahir, aged 63, received his first degree in Shari’ah from Universiti Kebangsaan Malaysia (UKM) in 1974 and obtained his PhD from University of Aberdeen, United Kingdom in 1988. Currently, he is an Associate Professor attached to Faculty of Al-Quran and Sunnah, UKM till present. In UKM he taught Muamalat Banking and Finance courses for both academic and professional programs including Master and doctoral Degree Courses. He has published more than 10 articles in various academic books and presented more than 100 papers in various academic journals and related academic literature.
He is currently the member of the Shari’ah Advisory Council of Affin Islamic Bank, PAB Unit Trust Management Bhd, Takaful Nasional Sdn Bhd, Ampro Holding Singapore, Apex Unit Trust, Commerce Asset Fund Managers Sdn Bhd and also the member of the Shari’ah Advisory Council of Securities Commission of Malaysia. He is also the Board members of Kolej Universiti Islam Antarabangsa Selangor. He was conferred “Tokoh Zakat Negeri Selangor 1997” and “Tokoh Maal Hijrah Negeri Selangor” in 2005 respectively.
Abd Aziz bin Ahmad - Group Chief Operating Officer
Abd Aziz bin Ahmad, aged 47, holds a BBA Finance and MBA majoring in Applied Finance from Universiti Kebangsaan Malaysia (UKM). He has wide knowledge and experienced in banking industry practices specialized in corporate and retail finance. He has served with various financial institutions for the past 17 years. Over the years within the Islamic Banking industries, he has been actively engaged in Islamic Banking products, services and operational issues related to Syariah matters.
He is currently attached to the Malaysian-Saudi Arabia Business Council as the Head of Finance and Investment, an NGO under the patronage of the Prime Minister Department.
Zulkifli bin Ab. Latif - Group Chief Finance Officer
Zulkifli bin Ab. Latif, aged 43, holds a Diploma in Banking Studies from UiTM and MBA from Atlantic International University, USA. Currently, he managed an IT business, ranging from computer hardware, software, networking, web design and consultancy. He is also an associate consultant at Asian Institute of Management Sciences, AES Open Learning and K-Professional Development Academy. Currently, he is the Chairman of the IT Bureau, Malay Chamber of Commerce Putrajaya.
While working at a previous organization, he was the advisor of the Financing Product Committee, Krung Thai Shariah Bank, Thailand in 2003. A year before that, he managed the training and implementation of Ar-Rahnu (Islamic Pawn Broking) product under the Micro-Financing Scheme for Islamic Development Bank, Brunei. Earlier, while working with a local bank, Zulkifli was involved in the planning and execution of the blueprint for the interest-free banking products and services. He also conducted research and development, formulating controls and reporting, training and managing the interest-free banking investment portfolio. Besides that, he was responsible for marketing and creating product awareness on interest-free banking products and services among existing and potential clients of the bank.
Irma Indayu binti Omar - Group Corporate Communications Officer
Irma Indayu binti Omar, aged 40, hold a bachelor degree in Linguistics and Literature from National University Jakarta, a Master in Library and Information Science from International Islamic University Malaysia and a Master in Corporate Communications from University Putra Malaysia. She has 15 years experience working in corporate, public and academic libraries. She is responsible for developing the library network in Putrajaya.
Irma is well versed in information management, searching and retrieval. She is also a freelance writer, editor and translator. She has written two books in library and information science and edited 15 books in various subjects.
Letter to Tun Dr Mahathir Mohamed
29 April 2009
Y. A.Bhg Tun Dr Mahathir Mohamad
Honorary President
Perdana Leadership Foundation
No.1, Jalan P8H, Precinct 8
62250 Putrajaya
Assalamualaikum wr wb,
Y. A.Bhg Tun,
Letter of Support For Webdinar System-The New Economy
We ,the webdinargroup are pleased to introduce the world’s first Webdinar System-The five Pillar platform,that compliments ‘riba’ free economy that will fit into the final piece of the ‘HALAL’ transaction cycle.
The idea to develop Webdinar System was conceived in the course of thorough studies on Tun’s called in 1992 to use gold dinar in order to avoid inflation, manipulation and stipulation. Our system is aim at providing Dinar ONLY transaction to 1.6 billion Muslims around the world.
By now, we are sure Y.A. Bhg Tun realise that the world have been talking only about Halal businesses, Halal forum and expos and halal transactions, but forget to comprehend that Halal monetary transaction in Dinar has still not taken place. It is still done in US dollar and other currencies.
Web dinar system is the world’s first online marketplace using gold dinar card payment gateway platform where settlement is by Islamic Gold Dinar currency. Our five pillars cycle are www. dinar2dinar.com, ww.golddinarcard.com, www.golddinarmoney.com, www.dinarpay.com and www.dinarsettlementbank.com.
Our objective is to foster unity, bringing the ummah towards this obligation to call for the return of Islamic Gold Dinar, to curb inflation, manipulation and stipulation. It represents a paradigm shift from the current monetary system. The vulnerability of the current fiat monetary system has prompted us to call for the rapid restoration of the Islamic Gold Dinar as the international monetary standard.
As the current financial crisis turned into an economic crisis, its repercussion is being felt globally. While the turmoil had its origins in the developed economies, its continued escalation has extended the crisis globally. Clearly important changes are needed for the financial system, which is a system that is less prone to disruptions and failures.
An international payment system based on gold, addresses these issues and this is an issue of justice. Among others, it will provide economic stability, prosperity for the people, safer storage of value, trusted basis for saving, better control of finance, stimulates local economies and employments, improved social and political system, prevents large scale systemic failures, disciplined government growth and control, returns the monetary power to the people and provides a financial deterrent to war.
We would appreciate it very much if Y.A Bhg Tun would allow us a little of your time to listen in at our system in bringing peace, prosperity and harmony to the world.
The catalyst will be that Webdinargroup will take Malaysia to hold the first:
i. WorldDinarExpo.com (for the Public).
ii. WorldDinarForum.com (for the Public, Government and its Agencies).
iii. WorldDinarSummit.com (G to G or Government to Government),
The Webdinar concept has been presented to MoF, EPU, MATRADE, BIMB, DPMM, IDB, BNM, Microsoft, MDeC, Universities, Muamalah Council (Pro Vadillo) and all have responded very positively. MoF has agreed to issue a letter of support for a IDB grant, MATRADE has given us a letter of support, Microsoft has given us RM625K worth of software packages and MDeC will soon issue us the MSC status.
Y.A. Bhg Tun ,we hope Tun would consider our request for an appointment to present the system.
‘Allah is pure and accepts only that which is pure’
Wassalam,
Signed
______________________
Borhannudin Mohamed
Chairman & Founder
WebDinarGroup.com
Tel: 012-6137 122
Y. A.Bhg Tun Dr Mahathir Mohamad
Honorary President
Perdana Leadership Foundation
No.1, Jalan P8H, Precinct 8
62250 Putrajaya
Assalamualaikum wr wb,
Y. A.Bhg Tun,
Letter of Support For Webdinar System-The New Economy
We ,the webdinargroup are pleased to introduce the world’s first Webdinar System-The five Pillar platform,that compliments ‘riba’ free economy that will fit into the final piece of the ‘HALAL’ transaction cycle.
The idea to develop Webdinar System was conceived in the course of thorough studies on Tun’s called in 1992 to use gold dinar in order to avoid inflation, manipulation and stipulation. Our system is aim at providing Dinar ONLY transaction to 1.6 billion Muslims around the world.
By now, we are sure Y.A. Bhg Tun realise that the world have been talking only about Halal businesses, Halal forum and expos and halal transactions, but forget to comprehend that Halal monetary transaction in Dinar has still not taken place. It is still done in US dollar and other currencies.
Web dinar system is the world’s first online marketplace using gold dinar card payment gateway platform where settlement is by Islamic Gold Dinar currency. Our five pillars cycle are www. dinar2dinar.com, ww.golddinarcard.com, www.golddinarmoney.com, www.dinarpay.com and www.dinarsettlementbank.com.
Our objective is to foster unity, bringing the ummah towards this obligation to call for the return of Islamic Gold Dinar, to curb inflation, manipulation and stipulation. It represents a paradigm shift from the current monetary system. The vulnerability of the current fiat monetary system has prompted us to call for the rapid restoration of the Islamic Gold Dinar as the international monetary standard.
As the current financial crisis turned into an economic crisis, its repercussion is being felt globally. While the turmoil had its origins in the developed economies, its continued escalation has extended the crisis globally. Clearly important changes are needed for the financial system, which is a system that is less prone to disruptions and failures.
An international payment system based on gold, addresses these issues and this is an issue of justice. Among others, it will provide economic stability, prosperity for the people, safer storage of value, trusted basis for saving, better control of finance, stimulates local economies and employments, improved social and political system, prevents large scale systemic failures, disciplined government growth and control, returns the monetary power to the people and provides a financial deterrent to war.
We would appreciate it very much if Y.A Bhg Tun would allow us a little of your time to listen in at our system in bringing peace, prosperity and harmony to the world.
The catalyst will be that Webdinargroup will take Malaysia to hold the first:
i. WorldDinarExpo.com (for the Public).
ii. WorldDinarForum.com (for the Public, Government and its Agencies).
iii. WorldDinarSummit.com (G to G or Government to Government),
The Webdinar concept has been presented to MoF, EPU, MATRADE, BIMB, DPMM, IDB, BNM, Microsoft, MDeC, Universities, Muamalah Council (Pro Vadillo) and all have responded very positively. MoF has agreed to issue a letter of support for a IDB grant, MATRADE has given us a letter of support, Microsoft has given us RM625K worth of software packages and MDeC will soon issue us the MSC status.
Y.A. Bhg Tun ,we hope Tun would consider our request for an appointment to present the system.
‘Allah is pure and accepts only that which is pure’
Wassalam,
Signed
______________________
Borhannudin Mohamed
Chairman & Founder
WebDinarGroup.com
Tel: 012-6137 122
Friday, May 1, 2009
Dr M: Reject cosmetic changes in Western banking system
Saturday May 2, 2009
Dr M: Reject cosmetic changes in Western banking system
BEIJING: Asians must reject minor cosmetic changes in the Western banking system and develop new systems instead.
Former Prime Minister Tun Dr Mahathir Mohamad said a recovery did not prove the Western monetary and financial systems were right and must be maintained.
“Whatever the results, we must critically examine the present system,” he said in his lecture titled, The Global Financial Crisis of the 21st Century – Lessons for Asia at the China Centre for Economic Research of Peking University.
Stressing the present crisis was due to systemic failure, he added: “If the West insists on retaining the present system with only minor cosmetic changes, Asians must be ready to reject them, if necessary.
“Asians must learn and convince themselves that they have the ability to formulate and develop new systems which will not be so easy to abuse.”
Believing that the Asian economies were very strong and would grow stronger with time, Dr Maha-thir said, their influence on the world economy was enormous.
“Systems developed by Asians should be taken seriously, and if good, should be accepted by the world.
Dr Mahathir urged Asians to develop new banking systems which would not be given the power to create unlimited money.
“Asians have the same capacity to think and innovate and they should be prepared to put up and defend their proposals for the world financial and economic reforms.
“But having said this, Asians must also be prepared to hear and consider proposals coming from others.”
He cautioned that the results would not be perfect even after systemic changes, and so measures to examine or correct any shortcomings or failure to curb any abuse must be maintained.
Also present at the lecture on Wednesday were Malaysian Ambassador to China Datuk Syed Norulzaman Syed Kamaruzaman, Peking University executive vice-president Prof Wu Zhipan, Peking University’s Office of International Relations deputy director Pan Qingde and the Malaysian students from Peking University.
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Dr M: Reject cosmetic changes in Western banking system
BEIJING: Asians must reject minor cosmetic changes in the Western banking system and develop new systems instead.
Former Prime Minister Tun Dr Mahathir Mohamad said a recovery did not prove the Western monetary and financial systems were right and must be maintained.
“Whatever the results, we must critically examine the present system,” he said in his lecture titled, The Global Financial Crisis of the 21st Century – Lessons for Asia at the China Centre for Economic Research of Peking University.
Stressing the present crisis was due to systemic failure, he added: “If the West insists on retaining the present system with only minor cosmetic changes, Asians must be ready to reject them, if necessary.
“Asians must learn and convince themselves that they have the ability to formulate and develop new systems which will not be so easy to abuse.”
Believing that the Asian economies were very strong and would grow stronger with time, Dr Maha-thir said, their influence on the world economy was enormous.
“Systems developed by Asians should be taken seriously, and if good, should be accepted by the world.
Dr Mahathir urged Asians to develop new banking systems which would not be given the power to create unlimited money.
“Asians have the same capacity to think and innovate and they should be prepared to put up and defend their proposals for the world financial and economic reforms.
“But having said this, Asians must also be prepared to hear and consider proposals coming from others.”
He cautioned that the results would not be perfect even after systemic changes, and so measures to examine or correct any shortcomings or failure to curb any abuse must be maintained.
Also present at the lecture on Wednesday were Malaysian Ambassador to China Datuk Syed Norulzaman Syed Kamaruzaman, Peking University executive vice-president Prof Wu Zhipan, Peking University’s Office of International Relations deputy director Pan Qingde and the Malaysian students from Peking University.
Ads by Google
Made-in-China.com
Wholesale Price from Manufacturers Join Us Today & Inquiry Directly!
www.Made-in-China.com
Hong Kong Disneyland
Don't Miss the Magic of Disneyland The Place Where Dreams Come True.
www.hongkongdisneyland.com
Multiple Currency Account
Open a Privilege Account Today with Anglo for up to 4.35% Gross!
www.AngloIrishBank.co.im/Savings
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