small and medium thoughts: November 2006

Polarised nation: Malaysian SMEs forced into racial silos

Many people might read this piece of news (the MCA having to step in to help non-bumi SMEs) as a positive development but I was personally quite saddened by it.

Because of our so-called social contract, our business environment has been forced into racial silos where companies (and literally where and how they can do their business) are governed by their owners' racial origins.

Declare yourself a bumi company and the gates of government largesse open up to you (click here for this Treasury letter to all local government heads indicating that only local bumi manufacturers of street lamps should be used).

If not, then be prepared to surrender at least 30% of your equity should you decide to list on the local stock exchange or bring in a foreign partner.

Also, be prepared to be actively discriminated against if you are in strategic sectors such as oil & gas or have idiots spread nasty rumours that your food products will corrupt the faithful.

Sigh.

technorati: SMEs, malaysia, race

Mengamuk - a uniquely Malaysian thing

Why should any one race claim exclusive rights to ‘mengamuk’ (run amok or go into a murderous frenzy)?

If UMNO is to be believed, the Malay race can always fall back to their ability to run amok should they feel threatened.

But if one race runs amok, then does it mean the others stand by helplessly while feeling the full assault of the frenzy?

If this blanket threat holds true, the entire nation would have self-destructed by now as ordinary bumiputera systematically explode at the slightest provocation.

I looked up the definition of the word and found an amusing entry in the Merriam Webster online dictionary:

Etymology: Malay amok:
a murderous frenzy that has traditionally been regarded as occurring especially in Malaysian culture

You see, even international publishers agrees that this is a Malaysian thing and should not be monopolized by just one race.

Swallow your words UMNO, or I'll run amok.

Technorati: UMNO, Malaysia, amok

Citibank Survey: Small businesses looking to professional managers

In a rather surprising finding, 40% of Singapore SME's plan to pass their business to professional managers instead of handing them down to family members.

This thinking is echoed by other Asian (namely Malaysia, Hong Kong, India and South Korea) SMEs that were sampled by the Economist Intelligence Unit on behalf of Citibank.

In the same breath however, SMEs are aware that attracting the right talent and staff is a challenge as they cannot match up to the superior resources of larger corporations.

Dare I say, unsurprisingly, money, for the Singaporeans is the greatest draw for enterpreneurship followed by a sense of personal achievement. The Asian average is a reversal of this - i.e. personal achievement is rated higher than money.

Tags: SMEs, Malaysia, Singapore

The Age: While Malaysia fiddles, its opportunities are running dry

Amid the racist drivel coming out from Umno Youth and their sycophants at the current General Assembly, it is evident the rest of the world is running out of patience.

This article, provocatively titled "The Cesspit of Malay Politics" in the Asia Sentinel talks about the moral decline of the ruling party and how increasingly out of touch its leaders are with its less well off populace.

This second article in Melbourne's the Age, pours scorn on the NEP.

Read and be enlightened.

technorati: malaysia, NEP

Malaysia among Top 20 Happiest Nations in the World

Racial issues and accusations of corruption in the government aside, it appears we Malaysians are a happy lot if this survey is to be believed.

Coming in at a creditable no.17 overall, we are third only to Bhutan and Brunei as the happiest Asian nation in a list dominated by wealthier European states.

The survey conducted by Adrian White of the University of Leiceser, also found that a nation's level of happiness was most closely associated with health levels, prosperity and education.

It was not mentioned where Singapore was placed.

Technorati: Happiness, Malaysia

Air Asia Trumps Singapore Airlines in Brand Survey

Here's one for the little guys (yep, that's the SMEs!)

Coming in at the 71st spot, AirAsia has trumped Singapore Airlines (no. 74) - at least according to the latest Synovate Asia's Top 1,000 Brands survey .

Not a bad feat for a home-grown budget airline which with its RM666 million revenue (2005) barely comes near the titanic SIA, with its S$13,341 million revenue (or more than 40 times its size!).

The SIA brand guys must be shivering in their seats now since they outspend AirAsia by a significant quantum.

Race-based Income Tax System Unthinkable?

If you’ve read this week’s edition of the Edge, you might have come across an interesting Citicorp report on the sleepy state of the Malaysian economy and the lacklustre performance of its stock exchange.

One of the recommendations by the analyst caught my attention (“Regaining Investor Confidence”, page 64): that a race-based income tax system would be an even more efficient substitute to the current market-intrusive equity ‘seizing’ nature of the NEP.

How I understand it, is that in this type of income tax regime, you would be subject to different income tax structures based on your race. So, naturally, if you are a bumiputera you will end up on another tax scale, paying less tax than your less fortunate ‘later-immigrant’ countrymen.

At first glance, it looks terrible, reeking of political incorrectness and racial discrimination on the highest levels.

However, if introducing such a system means that businesses no longer need to set aside 30% of their equity in perpetuity for bumi patrons of the ruling party, nebulous racial equity targets are dismantled and that there will only be one housing price for every Malaysian, then it may not seem that bad after all.

After all, as far as I can see in the current personal income tax system, Muslim bumiputera are already allowed to deduct their total zakat or tithe contributions off their payable tax, and not just dock it off taxable income like how the rest of us infidels have to treat our tax-free donations.

In that light, it is not entirely inconceivable why a race-based tax system should not be introduced provided all the other cumbersome requirements of the current NEP are done away with. It could also mitigate political fallout from an NEP withdrawal because it is essentially another form of preferential treatment.

Tough times call for tough and out-of-the-box measures but are Malaysians mature enough to accept them?

Technorati: Malaysia, NEP, race