Memimpin Melalui Teladan

Leadership By Example or "Memimpin Melalui Teladan" was long taught since our younger years in primary school.

Our leaders have always managed to show extraordinary examples on how to become a "leader", a "politician", a successful "businessman" and most important of all, what "say one thing, but do another thing means".

It is more often than not that whenever you drive in the highway, you will see that the speed limit is 110km/j (110 kilometers per hour). However, you can always see the police escorting the politicians and diplomats driving more than 110km per hour. Not something unusual. When we are speeding, we are summoned, but when they did, the have police to escort.

But why do they speed in the first place if not because they failed to manage their time properly (ie late in their next function), abuse of power (any other reason for not following the speed limit passed by the parliament in which they are a member themselves?) and because this is the norms.

Something need to be done, if they intend to lead, they should set their own example by abiding to the laws. Otherwise, they should face the consequences and pay the summons like all the rest of us. But I don't remember any of them going to pay the summons themselves although they themselves (or their drivers) were caught speeding.

Forum (6) Part I - A Trip To China 中国之旅 (Update 2)

二零零八年九月十九日至九月二十七日，一连八天，小弟到中国的五个城市去旅游，包括上海，南京，福州，厦门和深圳。这是小弟首次的中国之旅，心里兴奋莫名，也非常紧张。对中国的印象和了解，平时只是透过报章，电视新闻台，抑或是相关网站的图片和报导而得之一二。俗话说：读万卷书不如行万里路。在中国旅游的那几天，小弟着实对中国今日的现代化发展所取得的成就是震撼的，印象深刻的。小弟对那里的一切人，事，物是新鲜的，在大马这里见所未见，闻所未闻。顿时，举起随身带来的数码相机，拼命的将眼前很多新鲜的景观和事物拍了起来。相关图片如下：


上海篇


这辆本田轿车的车后左上角的“广州本田”字样，主要传达的讯息是此辆本田轿车是在中国广州生产的。


上海市工人文化宫的外部建筑设计。


上海城市规划展示馆（1）


上海城市规划展示馆（2）：外部建筑设计。


上海城市规划展示馆（3）:上海城市的重要建筑物地标模型。


上海城市规划展示馆（4）：上海浦东和浦西现今的城市发展和规划模型缩影。


录像 （1） ：在上海城市规划展示馆内的其中一个角落，坐落着这个上海城市模型缩影，展示目前浦东和浦西现代化的与未来先进的城市发展及规划蓝图。小弟着实非常震撼及深刻的感受到上海人的创造力与无穷的活力。


录像 （2） ：延续录像（1）在上海城市规划展示馆内。


上海城市街道一隅的傍晚景观。


上海城市街道一隅的夜晚景观。此街道宽敞干净，人山人海。这里有许多各式各样的商店和小食馆，有许多年轻人于此溜达逛街，小弟第一次感受到上海城市的活力和热闹。


录像 （3） ：上海城市其中一条街道，夜晚繁忙的情景。


录像 (4) : 延续录像 （3）上海城市街道，夜晚繁忙情景。


上海朋友的公寓（1）这是客厅。猜猜看这间公寓目前的市值是多少?


上海朋友的公寓（2）前面就是主人房。右手边是一间中房（A)。左手边依序是一间冲凉房和一间中房(B)。


上海朋友的公寓（3）这就是中房(B)。


上海朋友的公寓（4）这就是主人房。


上海朋友的公寓（5）这就是主人房内的冲凉房。


上海朋友的公寓（6）这就是中房(A)。根据上海的这位朋友说，这间三房一厅的公寓，2000年的市值是40万人民币左右，2004年飙至大概150万人民币，2008年更是上涨至280万人民币。上海房地产价格的上涨幅度和速度，着实令上海普通上班族望屋兴叹，梦寐难求矣。


上海朋友的公寓外貌


上海公寓外貌


上海其中一条老街的旧商店


上海其中一条老街的旧商店


上海环球金融中心的观光厅。这是继东方明珠263米的主观光层，到金茂大厦88层341米的观光厅后，上海浦东小陆家嘴地区另一个登高观光景点 - 最高达474米100层的上海环球金融中心观光厅，是上海登高观光高度的新突破的纪录。欲详细了解上海环球金融中心，请参考此网站 http://swfc-shanghai.com/


在高439米的上海环球金融中心97层观光天桥上，俯瞰上海壮丽的风景。当天上海的空气素质非常差，所以上空朦胧一片的。

在环球金融中心97层观光天桥上面，俯瞰上海的风景。


图片中间的建筑物便是上海环球金融中心，以屋顶高度492米（101楼）为当今世界第一高楼，超过了目前屋顶高度世界第一的台北101大楼（480米）。


动车篇

黑人总统，奥巴马!

美国黑人总统，终于脱颖而出；
今后肩负重任，承载民众使命；
前路困难重重，未来改革艰苦；
内有金融危机，外有战争烂摊；
重塑美国形象，实是迫在眉睫；
稳住美国经济，乃是首要任务；
奥巴马当总统，世人引颈期盼；
呼吁全球群众，为其胜选欢呼!

America's First Black Elected President! What this tells us?

In the just concluded US presidential election result, the American people had made a great breakthrough. They had chosen an African American, “with a funny name” Barack Obama as the 44th President of the United States. With the promise to bring change to America, the 46-years-old Democratic Senator of Illinois won big with a landslide victory by winning electoral votes of 338 over McCain 163.

Before 4th November 2008, we can only see the African American President through the Hollywood's movies. But now it is real happening before our sight.

What this scenario tells us? The American people had once again been creating another great history in the world. They possess the wisdom, determination and capacities to constantly producing miraculous and remarkable greatness.

In the science and technology, the American had invented the internet which is initially being used for military purpose. Yet they had shared this technology out to the world and help to mould the different way people were being connected and promote a novel way of communication.

In the business world, there were Microsoft, Google, Dell, Amazon, Citibank etc whose successful brand names had implanted depth into our minds and integrated breadth into our daily life. They were all originated from the America.

And of course, the American people were smart and creative enough to popularize the securitized mortgage debts which were the major elements causing the current meltdown of the global financial markets and banking system.

Democracy, freedom, innovation and risk were those values connected to the American people. That is why they are able to create constant impacts to the world.

Utusan Melayu, the history?

Sejak kebelakangan ini, surat khabar Melayu tempatan -- Utusan Melayu telah terlibat dengan pelbagai isu politik yang melebihi fungsinya sebagai media massa untuk menyampaikan maklumat.

Kini, Ahli Parlimen Seputeh, Cik Teresa Kok telah memfailkan satu guaman fitnah terhadap Utusan Melayu dan seorang pengarang iaitu Mohd Zaini Hassan menuntut untuk RM30 juta sebagai gantirugi yang dikatakan menyebabkan beliau ditangkap dan dipenjarakan sebanyak 7 hari di bawah Akta Sekuriti Dalaman ("ISA").

Menurut laporan,beliau menuntut RM30 juta untuk satu artikel yang bergelaran "Azan, Jawi, Jais, UiTM dan ba-alif-ba-ya" yang diterbitkan oleh Utusan Malaysia pada 10 September 2008 yang dikatakan sebagai dengan niat jahat untuk menfitnah beliau.

Utusan Malaysia atau sebelumnya Utusan Melayu yang ditulis dalam jawi mula diterbitkan di Kuala Lumpur pada sekitar 29 Mei 1939 setelah ibu pejabatnya dipindah dari Singapura ke Malaysia.

Sebagai sebuah surat khabar kebangsaan Melayu, Utusan Melayu telah menjadi medan untuk menuntut kemerdekaan dan mengalakan idealisme bahasa dan sastera Melayu.

Dalam sejarah Malaysia, adalah dipercayai bahawa hanya wujud sekali sahaja demontrasi dan mogok yang melibatkan wartawan Melayu dan pekerja mereka iaitu pada sekitar tahun 1961.

Tindakan mogok ini yang mengambil masa lebih kurang 100 hari bermula pada tahun 1961 apabila para pekerja Utusan Melayu mogok demi mempertahankan kebebasan media dan berita.

Pada masa itu, Utusan Melayu yang kerap mengkritik Perdana Menteri pada masa itu, Tunku Abdul Rahman telah mendapati bahawa Ketua Editor dan CEO surat khabar tersebut yang bakal dilantik merupakan ahli UMNO.

Tokoh terkenal dan wartawan seperti Said Zahari, Usman Awang, Abu Zaki Fadzil, Awamilarsarkam dan lain-lain lagi telah dikatakan terlibat dalam tindakan mogok ini demi mempertahankan kebebasan media.

Antara sebab-sebab lain yang dikatakan menyebabkan tindakan mogok ini adalah polisi yang dikenakan terhadap wartawan dan pekerja Utusan Melayu di mana mereka dipercayai bahawa polisi tahun 1959 yang bakal dikuatkuasakan oleh ahli UMNO terlibat bakal menjejaskan kemerdekaan wartawan dalam menjalankan tugas mereka.

Untuk mempertahankan kebebasan media dan surat khabar mereka, adalah dikatakan bahawa Said Zahari telah memimpin wartawan-wartawan dan pekerja-pekerja kilang penerbitan membantah perlantikan ahli UMNO yang berkenaan dan meminta agar orang yang tidak mempunyai latar belakang politik dilantik sebagai Ketua Editor dan CEO.

Adalah tuntutan mereka agar pihak pengurusan menyelesaikan masalah berkenaan sebelum 21 Julai 1961 atau mereka akan mogok.

Pada 21 Julai 1961, mereka telah memulakan mogok yang bertahan sebanyak 93 hari dan berakhir pada 21 Oktober tahun yang sama.

Semasa mogok, mereka mendirikan khemah di luar pejabat Utusan dan menjaga di situ. Pada mulanya, mereka yang menyertai mogok cuba menghalang pekerja yang berniat bekerja untuk memasuki pejabat, walaubagaimanpun, mereka kemudiannya berhenti tindakan sedemikian.

Setelah lebih kurang satu bulan, Said Zahari telah dihalau ke negeri Singapura di mana beliau kemudiannya dikatakan telah ditahan sebagai banduan politik di situ.

Ada yang kata bahawa beliau telah diarahkan balik ke Singapura semasa dalam perjalanan balik ke Kuala Lumpur setelah melawat pekerja Utusan di Singapura yang menyertai morok yang berkenaan.

Setelah kehilangan ketua mereka, campurtangan daripada pihak polis juga menyebabkan pengikut-pengikut yang terdiri daripada pekerja dan wartawan berpecah belah. Atas dasar pihak pengurusan yang bersedia untuk menerima mereka yang mogok dan membayar gaji mereka telah menyebabkan mereka yang mogok berpecah pandangan dan apabila khemah-khemah mereka dirosakkan, pihak jawatankuasa mogok terpaksa menghentikan tindakan mereka.

Adalah dikatakan bahawa pihak politik masih menguasai surat khabar ini sehingga hari ini.

Rujukan: terbitan Strategic Info Research Developmen - Kuasa Rakyat- tradisi yang tidak berhenti
- laman web yang berkenaan di bawah carian "Utusan Melayu" atau "Utusan Malaysia".

Is Malaysia located in another planet? Are we talking about planet earth?

Under the backdrop of the current global financial crisis which is originated from the US and spread to the Europe and now starting to affect the other parts of the world including Asia.A simple analysis of Malaysia 2009 economic outlook from the perspective of an ordinary working man.

As we all know that Malaysia’s major revenue sources are from the export of the crude oil and crude palm oil, specifically the crude oil export contributed nearly 40% to 46% to the nation’s revenue.

The US is still the leading export market of Malaysia, followed by European Union, South East Asia and the fourth is Japan.Overall manufacturing products accounted for 75 percent of Malaysia's total exports followed by crude oil and other minerals at 14 percent and agricultural products at 9.5 percent, as at 31 December 2007. While the exports of electrical and electronic goods accounted for 44 percent of total exports, with the US is the biggest consumption market.

For the last two weeks, the stock markets worldwide had been experiencing the severe bottomless spiral southwards. Malaysia’s Kuala Lumpur Composite Index , year to date, had been tumbling more than 30% since the early of the year 2008.

What the above statistics tell us?

As at 11 October 2008, the global crude oil price was tumbling to below USD 80.00 per barrel as compare to its record high of above USD 140.00 per barrel, while the crude palm oil price was recording below RM 2000.00 per tonnes for December 2008 order as compare to its record high of above RM 4000.00 per tonnes. This means that the country is going to experience the budget deficit if the government is not intending to review its already presented 2009 National Budget. We must be questioning where would be the funding sources for the mega projects such as the Iskandar Malaysia (formerly known as Iskandar Development Region or IDR) and the other Economic Corridor Region?The Iskandar Malaysia and the other Economic Corridor Regions had been hailed as the major engine of the Malaysian economic growth in the future.

The consumers' confidence level in US and the Europe had been dipped into the decades low following the subsequent collapse of their banking and financial institution. This will have huge impacts onto our export. With the external demand reducing, the manufacturing companies will abandon their existing expansion plan and tightening their budget. While the fear of massive manpower laid-off in the manufacturing sectors will soon dominate the Malaysian market. Then the possible rising of the unemployment rate will certainly pose a significant impact to the social instability which had been ailed by the political instability since Malaysian historical 308 political Tsunami.

The severe bearish market had dampened the households’ confidence level and their spending sentiment. They will finally tightening their belts and cut back on consumption. Hence, the slow growth of the domestic consumption.

With the internal and external negative development, we might tend to ask where the country’s economy is heading to?

The globalization seeds had long been taken root in this world for decades. This means, nowadays, the economies of the countries across the continents, in breadth and depth, are interconnected and interdependent.

Yet lately, we still heard our country’s leaders unanimously expressed confidence that Malaysia’s economy is still resilient given the current global financial crisis. They boasted that the country have a stronger economic fundamentals, sufficient foreign reserves and sound financial and banking system.

Hullo, Is Malaysia located in another planet of the universe? Not in planet earth?

Equality, Justice, Issues and Policies

Today, in Sin Chew Daily (13 October 2008, Monday) headline, is the statements by Tan Sri Muhyiddin Yassin on the topic that UMNO needs to make changes and that there should be review of the economic policies and distributions of the wealth in the Country.

It was stated that UMNO must make the changes on the distribution of the country's wealth, review the issues that were perceived to be injustice (to certain quarter in the society) including education, language, religion, judiciary, execution of law and so on.

In life, we recognize that all of us are different, whether it is in physical forms such as the colour of the skins, the height and weight of our bodies, or in our spiritual forms such as the way we think, the religion we believe in and the culture that we practise.

In a society or even a country, we are also different through the systems we practise, the laws that we uphold and the language that we used.

All of us are different, there is no doubt about it.

We are different in all ways, that is the fact and the easiest way to proof is the different fingerprint that we all have and the different genes that we carried.

According to the Biblical story, men in the city of Babel, was a city that united humanity, where all spoke a single language and share the same goal. It was said that they wanted to build their city with the tallest building that would have top of the tower in the heavens. This Tower of Babel was dedicated to the glory of men. God saw what people have done and gave each a different language to confuse them and scattered the people throughout the earth.(Refer Genesis 11:1-9 ).

We are different and yet we all seek for equality. In the famous Declaration of Independence written by Thomas Jefferson in 1776, it was stated that "all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the Pursuit of Happiness.

No doubt, there will never be equality amongst gender on the basis of physical strenghts and hormon difference. No doubt there will never be equality to chances as each one has his/her own destiny and there is no equality in democracy politics where the one with the majority voters will have control over the government especially when a candidate come from the majority ethnic group in that society.

In short, the dominant (in numbers) will always prevails. However, we cannot say that it is wrong as logic will draw to the same conclusion. The minority should adapt to the needs of the majority. It would be against the norm if ten person needs to learn the language or styles in living of one in order to communicate (the question of why many should submit to one arise). As such, the dominant in resources, knowledge, weapons, technology and wealth will always take precedent over the rest.

It was with this principle that our laws were made. The dominant should have the biggest shares first before the minority can be given the rest. Even the Darwin theory doesn't put equality as a part of nature. It was always about balance and not equality. For example, Arthur needs to eat 2 pizza per meal while Bob needs to eat 1 pizza per meal, to give 1 1/2 pizza in equal will be a waste in resources for Bob and suppression of needs to Arthur. There will never be equality.

To overcome the principle of the dominant comes first, the human civilizations adopt the principles of justice and equality. It was with these principles that all needs of the society be controlled and the basic needs of all be provided but not until the suppression leads to revolutions or war.

The idealogy of having a just and equal society is necessary to maintain stability and sustainable progress. However, it is always easier said than done. For the dominant UMNO to give up its rights when it is still gigantic cannot bring anything except chaos. The only option available is to increase the size of the cake and reduce the ratio of growth of the dominant and to bring up the minority. Only changes at the right timing will we have the dominant remaining relevant but would not be ignorant to the needs of the minority.

Only at the right timing will our society progress on merits and all these depends on policies that the government is willing to take and make. All said and done, it will require a lot of political wisdom should Tan Sri Muhyiddin Yassin intends to ensure a sustainable and progressive Malaysia. However, if he manage to do so, there will be no distance between him and the premiership.

Forum (5) - Press Release

马来西亚青年运动（青运）总会属下之社会与青年研究组与网络部落客 —“大国论坛”首次联办的第五次社会论坛圆满结束。

论坛主持人陈俊铭律师感谢所有参与者的踊跃出席及感谢当晚的主讲人 --- 陈政豪律师与李健杰先生的知识分享。

青运与大国论坛所举办的社会论坛首要目标是鼓励社会人士进行知识与经验分享并藉此平台引导社会青年关心时事与国势发展。

陈政豪律师在主讲“马来西亚家庭法”时强调，夫妻双方同意离婚与单方面申请离婚的其中一项差异是双方同意离婚的法律程序是不需要把婚姻破裂的原因公诸于世。

李健杰先生在讲解 “ 投资信托 --- 真相、迷思与策略时强调运用公积金（EPF）的好处” 。他解释利用公积金去投资信托基金是利用一笔额外资金去投资而投资的服务费最高仅是3%,远比市场的 5-6%服务费低。此外，运用公积金去投资的数额若在当事人被宣布破产时也会回归公积金局管辖而不会被接管。只要公积金第一户口在30岁时（依照公积金条例） 超过RM23,000.00 ， 40岁时超过 RM49,000 及50岁时超过 RM95,000均可提出所超出的数额去投资。

秉持着分享知识与透明社会的概念，青运总会属下之社会与青年研究组与大国论坛将于每个月举办不同课题的社会论坛并进行交流。主办单位将于10月18日（星期六）晚上8时于雪兰莪蒲种进行第六次社会论坛。罗玉忠先生将主讲“在中国的生意机会 --- 我的经验” 与傅瑞丝小姐将主讲“在印尼的生意机会 --- 我的经验”。大众受邀出席，入场免费。研讨内容将以华语为主并在有必要时使用其他语言为辅。

欲知详情请联络：俊铭 012-356 9168 或游览www.magnificentnationforum.blogspot.com

Forum (5) Part II - Investment In Trust Fund-- The Truth, The Myths and The Strategies

1. What is Unit Trust?

A: A Unit Trust fund is a professionally managed investment fund, which collects the resources from individual investors or corporate investors with similar investment objectives. With the large sum of capital, fund managers can invest the money into stock market, bonds, money market, property or others according to the investment objectives of the fund.

2. Why we invest in Unit Trust? What is the benefit?

A: Unit Trust is one of the investment tools that we can use to achieve our financial goals. The benefit of unit trust includes:
• Low risk as it invests in many different sectors or asset allocations (diversification)
• Managed by professional fund manager
• More liquid than share
• Chance to invest in bond market or foreign stock market, where normal individual investors cannot invest into.
• Advantage of compounding

3. Is there any disadvantage for Unit Trust?
A: Yes, there is disadvantage for Unit Trust as well. Diversification may reduce the returns, as some of the share may perform well, and some of the share may perform poor. Fund Managers have limitation on investment strategies, as they need to follow the investment strategies stated on the prospectus.

4. What is the difference between Unit Trust and Mutual Fund?
A: Theoretically, there is difference between unit trust and mutual fund. There is only unit trust available in Malaysia.

5. Where we can buy Unit Trust?
A: We can buy unit trust at their fund houses respectively. Example, buying Public Mutual fund at Public Mutual office. Another way is, buying through agents or banks.

6. Any requirement or minimum amount to invest in Unit Trust?
A: The minimum initial investment amount is stated in the prospectus. Different funds have different minimum initial investment amount. Normally, the minimum initial investment is RM1000.

7. Is there a variety of Unit Trust in the market?
A: Yes. There are many types of unit trust available in the market now.
Equity Fund:
Higher risk, mainly invest in stock market.
Bond Fund:
Lower risk, mainly invest in bond market.
Income Fund:
Lowest risk, mainly invest in fixed income securities, such as Fixed Deposits.
Dividend Fund:
Moderate risk, mainly invest in high dividend yield stock.
Index Fund:
Invest in all the Composite Index contributing stocks.
Balanced Fund:
Moderate risk, invest in both stock market and bond market.
Besides the type of funds, there are also varieties of region where the fund will invest in. Currently, there are funds investing in Asia region, Europe region, global, Far East region, ASEAN countries and so forth.

8. What is NAV?
A: NAV (Net Asset Value) is the real value of the fund. All the transactions of the fund are based on the NAV.

Example:
If the NAV of the fund is RM0.25:
You buy 10000 units, the total investment is RM0.25x10000=RM2500
You sell 10000 units, the total money you get is RM0.25x10000=RM2500

9. Is there any charge and fee applied?
A: Yes, normally we need to pay service charge, annual management fee and annual trustee fee. The rate of charge and fee is different among different fund. Normally, equity funds charge 5-7% service charge, 1.5% annual management fee and 0.7% annual trustee fee. Bond and income funds charge 0-0.25% service charge, 1.5% annual management fee and 0.7% annual trustee fee.

10. How to choose a fund to invest?
A: Examine the risk level that you can take. Different types of funds have different level of risk. If you are risk taker, you can invest in high risk funds, such as equity funds. After deciding which type of funds to invest, look at the past performance of the fund and the fund houses. Although the past performance cannot guarantee the future performance, we can know the ability of that particular fund manager.

11. What if I do not have much of money? Can I invest as well?

A: Normally, the minimum initial investment amount is minimal, which is RM1000. There are still unit trusts having minimum initial investment RM500.

12. What is the interest rate of Unit Trust?
A: Unit Trust is not a saving tool. Unit Trust is an investment. Hence, there is no fixed interest for Unit Trust. You can get return from Unit Trust when the price increases or dividend distribution.

13. Do I need to top up my investment every month?
A: No, it is not necessary you need to top up your investment every month. Effective 25 June 2007, EPF funds are no longer allowed to be withdrawn to invest in oversea funds.

14. Is the return of Unit Trust guaranteed?
A: No, there is no guaranteed return for unit trust.

15. If the stock market is going down, should I sell all my Unit Trust?
A: Not necessary. As unit trust has diversification in different regions or different sectors, even the stock market is going down, it does not mean all the stocks price will go down and not all the region will face this downtrend.

16. How long should I hold the Unit Trust?
A: Normally, investors are advised to hold the unit trust for 3 to 5 years or longer. Hold the unit trust longer to enjoy the compounded return.

17. What is distribution and unit split?
A: Distribution is similar to dividend. Its purpose is to give back return to investors. Distribution is given in cash or investors can choose to reinvest the distribution. Unit Split is to make the fund size bigger and price lower.
Eg: Unit Split 1:25, if you have 1000 units, you will get 40 units extra after the split.

18. Should we only buy the fund with high historical distribution?
A: No. Distribution is not indicating the performance of the fund. The real value of the investment is still same. After distribution, the fund price will drop as the distribution is from the NAV of the fund.

Eg: Fund with RM0.50 NAV declares distribution of 5 cents. If you have 1000 units, you will get RM50 from the distribution. After the distribution, the NAV will decrease 5 cents, become RM0.45 per unit. So, the value of the 1000 units you are holding is RM450 instead of RM500.

19. How can we know that how much we have earned or lost?
A: From the statement, you can know how many units you have. Multiply the number of units with the NAV of the fund, you can get how much is your fund worth now. Example, you invest RM1000, and the worth of your fund now is RM1200, you earn RM200 or 20% of it. If you are not sure the number of units you have, you can refer to your agent.

20. Can we sell the Unit Trust anytime we want?
A: Yes, you can sell your unit anytime. Get your agent to help on this.

21. What is switching?
A: Switching is one of the strategies in Unit Trust investment. As there is service charge for every investment, switching is used to save the service charge. Normally, switching applies a minimal switching fee, but you do not need to pay the service charge.
Example, you are holding equity fund and have earned money, you foresee the market is unstable and going down, you can switch your equity fund to bond fund to lock your profit. Bond fund is more stable and will not be affected much by share market movement. Once you feel that the share market is stable and going up, you can switch back your bond fund to equity fund. This process includes two times of switching, so the charge is only two times of switching fee. You can save the 0.25% service charge (when switch from equity fund to bond fund), and 5-7% service charge (when switch from bond fund to equity fund).

22. How is the mechanism of switching?
A: Switching is similar to repurchase and buy without paying service charge. The mechanism is as such, for example, you have 4000 unit of an equity fund, you want to switch it into bond fund. These 4000 units will be converted into value by multiplying the NAV. The value is divided with the NAV of the bond fund to get the total unit of bond fund you get. Eg: 4000 units of RM0.25, the value is RM1000. If the bond fund’s NAV is RM0.50. You will get 2000 units of bond fund.

23. Do I need to pay tax for the profit I gain from Unit Trust investment?

A: No, the profit you gain from the capital appreciation is not taxable. However, distribution
is taxable.

选择基金时，价钱重要吗？是不是低价表示比较便宜划算？

信托基金的价钱并不应该被视为遴选基金的重要因素。基金的价钱并不像股票。一个股票如果价钱比净资产低或本益比低，股价可以说是便宜。但是基金并不能这样评估的。

例子1：
有2个新的基金，一个NAV是RM0.25，一个NAV是RM0.50。是否表示RM0.25的基金比较便宜，比较划算？
当然不是，真正来说，这2个基金都一样，不会一个比另一个便宜，或比另一个贵。想象一下，如果你投资RM1000（舍去服务费不算），一个你能得到4000单位，另一个你得到2000单位。一旦这2个基金都涨了10%，那RM0.25的就变成RM0.275，那RM0.50的就变成RM0.55。
现在来算真正你赚了多少，RM0.25的，你的4000单位乘以RM0.275，你能得到RM1100。RM0.50的，你的2000单位乘以RM0.55，你能得到RM1100。
那不是一样吗？

例子2：
当一个基金的价钱来到RM1.00时，是不是表示该基金已经很贵了，不值得买？
其实也不然。因为基金就是投资在股市的。一个基金能否继续上涨，并不是看基金的价钱，而是看股市的走势。一个低价的基金，如果股市上涨不多，这基金也不会上涨很多的。所以，并不能说RM1.00的基金就是很贵。如果股市还有潜质上涨，那基金就肯定能继续上涨了。

例子3：
一个RM0.30和一个RM1.00的基金，是不是RM0.30比较有潜质上涨呢？
当然也不是。有没有潜质上涨，并不是看基金的价钱，而是看基金的投资策略。如果美国股市疲弱，而亚洲股市强劲，那投资美国的基金就肯定不能上涨很多了。
有很多人以为比较低价的基金，上涨空间比较大，其实也不然。投资回酬是以百分比来衡量的。不应该用钱来衡量。如果2个基金的投资策略一模一样，RM0.30的基金赚了RM0.10，那RM1.00有可能也是赚RM0.10吗？当然不会，因为你投RM0.30就能赚到RM0.10，如果你投RM1.00，当然赚的也比较多。以这个例子，RM0.30的基金赚RM0.10，等于有33%回酬。那RM1.00的基金，应该是赚了RM0.33，也是33%回酬。所以，上涨空间并不能用价钱来衡量。

结论：
我个人觉得基金的价钱并不应该成为我们选基金的考量之一。选基金时，重要的是，清楚自己本身能承担的风险程度，然后选一个适当的基金。除了风险，还要考虑基金的投资策略是否适合你的口味。还有，记得一点，衡量投资回酬一定要以百分比，不能单单看表面的价钱。了解基金的投资策略并考量该基金的投资市场是否有潜质，这样的做法比较妥当。

至于便宜或贵，也得看股市了。如果股市普遍很贵，本益比很高，那RM0.10的基金也是贵的。如果股市普遍很便宜，本益比很低，那RM1.00的基金也不贵。



什么是distribution？Distribution重要吗？
投资股票，其中一个收入来源就是股息，dividend。在信托基金世界里，我们叫这作distribution，而不是dividend。Distribution 就是基金经理把一部分赚到的钱，分发回馈投资者。Distribution是以现金的方式分发的。投资者在投资基金时，会选择再投资这distribution还是把distribution拿出。那distribution重要吗？当然distribution是起着一定的作用的。对投资者而言，distribution的意义不是很大。为什么？比如，一个基金NAV是RM1.00，分distribution 10cent per unit。你持有1000个单位，那你就能得到RM100。那基金在分了distribution后，NAV就会相应的降低，从RM1.00跌到RM0.90。现在算投资者真正持有的单位价值，1000xRM0.90=RM900，然后加上distribution RM100, 一共RM1000。价值还是一样。这里值得一提的是，再投资时，我们是不用付服务费的。Distribution 有一部分是需要抽税的，但是如果你的个人所得税没有公司税般高，你能在填 BE Form 时，claim回你多付的税款。那distribution到底有什么用处呢？其实，它可以降低基金的价钱，看起来比较便宜，比较能吸引更多新的投资者。Distribution对基金公司很有用，但是对投资者并没有什么意义。所以，个人觉得我们在选择基金时，不用看基金过去的distribution纪录。只需要看基金的性质和投资策略是否适合自己。也可以参考过去的回酬表现。




Annual Return 的计算法和复利的奥妙

在这里解释一下如何计算年回酬（annualized return）。
任何投资都有总回酬（total return）和年回酬（annualized return）。总回酬很简单计算也容易了解。只是用回酬除以投资成本的百分比就是了。

例子1：
投资者投资RM1000在某基金，5年后他的基金价值RM2000，赚了RM1000的回酬。总回酬率是100%。
方程式：
% Return = Total Return/Total Investment
总回酬率 = RM1000/RM1000 = 100%

这例子的投资者赚了100%，听起来好像很多，赚了一倍，但是大家没有考虑到他用了5年时间。那他真正一年是赚多少？这个就必须算年回酬率了（annualized return）。

例子2：
就以例子1的情况，现在我们看看这投资者的基金每年的平均年回酬是多少。
方程式：
%Annual Return={(total return % +1)^(1/year of investment)}-1
年回酬率 = {(100%+1)^(1/5)}-1 = (2^0.2)-1 = 0.1487 = 14.87%

我们可以算到平均年回酬率是14.87%。
如果我们不这样计算，只是用100%/5，那我们会得到20%。其实真正的年回酬是14.87%。

从另一个角度来看就是，RM1000投资在每年有14.87%回酬的基金长达5年，我们的RM1000就变成RM2000了，赚了一倍。

这就是复利的奥妙。别小看7.2%年回酬，以为这投资在10年后才赚到72%。其实不然，如果投资RM1000在每年7.2%回酬的基金，在10年后，其实这投资是赚一倍的，既是赚了RM1000。如果你要验证，可以利用上面的方程式算算，顺便可以练习一下。这里也引用klse.8k前辈的开番理论。投资RM10,000在每年有26%回酬的投资，30年后竟然变成RM10,000,000。

说了复利的奥妙，当然也要说通货膨胀率。通膨每天都在发生，如果通膨率每年4%，那你现在的RM1000在5年后变成多少？
方程式：
Future Value = Present Value x (1-inflation rate)^(number of year)
5年后的价值 = RM1000 x (1-0.04)^5 = RM815.37

现在可以看见分别吧。把RM1000用来投资，只要年回酬率比通膨率高，那我们的钱就不会变少了。如果把RM1000收在家里，那5年后就变成RM815.37。

Invest Early or Invest Late?

Assuming that the annual return of the investment is 8%:
Mr. A invests RM1200 every year for 10 years, but Mr. B wants to enjoy life first, so he plans to invest RM1200 every year for 20 years on 11th year onwards. In the 30th year, Mr. A has around 40% more than Mr. B, although Mr. A just invests for 10 years while Mr. B invests for 20 years.

Conclusion:

Time is very valuable and it cannot be bought using money. Time is a very important aspect for the investment to grow. The compounding effect is significant. Invest earlier definitely generate more money for you compared to investing later.

Regular Saving in Unit Trust Fund
Regular saving is same as DCA (Dollar Cost Averaging). This method is to force investors to save money into the funds and let the money grow, and also to average the fund price, so that investors will not buy the fund at the peak.
Let see how much we can get if we invest regularly:
Assume initial investment is RM1000.
Average annual return = 8%

Most of the financial planners will assume unit trust fund can give 8% of average annual return. Assume that you invest RM1000 and top up RM300 every month for 15 years, you can get RM104,000 after 15 years.

Even if you cannot take too high risk, and opt to a combination of moderate and low risk funds,
an average annual return of 6% is reasonable.

Assume that you invest RM1000 and top up RM300 every month for 15 years, you can get RM88,000 after 15 years.

Why Use EPF to Invest in Unit Trust?
Since February 2008, EPF (Employee Provident Fund) has modified their policy and allow more
people to withdraw from their EPF account 1 to invest in unit trust funds.

Advantages of using EPF to invest in unit trust:
1. Lower Service Charge

EPF has set the service charge for EPF investment maximum 3%. Normally equity funds impose 5-6% service charge.

2. Longer Investment Time

We only can withdraw the money from EPF account 1 when we are 55 year old. Since we cannot withdraw the money for the said period, we can put the money into the unit trust fund for long term, like 15 years or 20 years. With the longer time of the investment, the risk is lower.

3. Higher Return

Since year 2001/2002, EPF gives lower interest, which is around 4-5%. Even in the year 2006/2007, with the big bull market, EPF also just announce 5.8% interest in year 2007. For equity funds, the average annual return is always around 8-10% if we invest for more than 10 years.

4. Average Buying Price

We are only allowed to withdraw the money to invest every 3 months. So, we will invest into the funds every 3 months for long term. This definitely will average our buying price, so that we will not buy the funds at peak price.

Disadvantages of using EPF to invest in unit trust:

5. Only pure local funds are allowed
EPF only allows EPF investors to withdraw from EPF to invest in pure local funds. Funds which invest in oversea are not allowed. This may limit the profit of the investment if oversea markets are doing well and the investment is not diversified in terms of region.

The content of this post belong solely to Mr. Lee Keng Ket and published with the consent of Mr. Lee Keng Ket.

Prepared by: Mr. Lee Keng Ket

(Should you have any query or requires further details, kindly contact him at: http://leekk8.blogspot.com/.)

Q&A Session:

Q: What is the minimum amount allowed to be withdrawn from EPF at the age of 30, 40 and 50 years old?

A: (After taking into consideration of the minimum amount in the 1st account of EPF according to age and minimum amount allowed to be withdrawn of RM1,000.00 (refer http://www.kwsp.gov.my/ for "simpanan asas") ) At the age of 30, the amount should be more than RM23,000.00, at the age of 40 should be RM49,000.00 and at the age of 50 should be not less than RM95,000.00. But it is advisable to dispose of all the shares between the age of 50-55 as the market of the Trust Fund when you are at the age of 55 years old may not be a good price to sell.

Forum (5) -Family Law [On 28.09.2008 (Part I)]

(A) Relevant Statute

1. Law Reform (Marriage and Divorce) Act 1976 (“The Act”)
2. Divorce and Matrimonial Proceedings Rule 1980 (“The Rules”)

- The Act applies to :
i) All persons in Malaysia*; or
ii) All person domiciled in Malaysia but are resident outside Malaysia

-EXCLUDING
i) Muslims; or
ii) Any native of Sabah & Sarawak; or
iii) Any aborigine of West Malaysia whose marriage is governed by the native customary law or aboriginal custom unless he elects to marry under the Act.

(*please take note that a person who is a citizen of Malaysia shall be deemed, until the contrary is proved to be domiciled in Malaysia.)

(B) Validity on Marriage

Prior to 1.03.1982, those marriages which have not been registered would be recognized under the Law provided if the parties to the marriage able to show the evidence that they had undergone the customary marriage. i.e- wedding invitation cards, photographs etc.

After the 1.03.1982, all the marriage must be registered under the Act and must be monogamous.


(C) Restriction on marriage

(i) Either party is under age of 18
§ If female is above age of 16 but below 18 – license must be obtained from the Chief Minister

(ii) A person who is below 21
§ Must obtain the consent in writing from his/her father or if his/her father is dead or he/s she is illegitimate child- consent must be obtain from his/her mother.
§ If he/she is an adopted child- must obtain from his/her adopted father. If his adopted father is dead, then obtain from his/her mother.
§ Where consent is unreasonably refused or impracticable – may seek consent from the court by way of file in application under s.12 of the Act.

(iii) Both parties are same gender – female & female or male & male

(iv) Either one party is still married – bigamy is an offence under s.494 of penal code

(v) Prohibited relationship – no incest allowed
(* Exception- under Hindu customary law- a Hindu may marry his sister’s daughter (niece) or her mother’s brother (uncle) which is permitted under the Act.)

(D) Divorce
x Jurisdiction of the Court:

(i) Marriage must has been registered; or
(ii) Deem to be registered under this Act; or
(iii) Foreign law which provides for monogamous marriages, and
(iv) Both spouses live in Malaysia or consider Malaysia to be their home.

x Restriction

§ Before expiry of 2 years from the date of marriage- petition cannot be presented to the court.
§ may obtain leave from the court if the marriage is still hasn’t reached 2 years time- the applicant must show the exceptional circumstances or hardship suffered

x Types of Divorce

1. Mutual Divorce

§ The marriage must stand for at least 2 years except for exceptional or hardship cases
§ No need to go through the Marriage Tribunal (conciliatory body), therefore, certificate of Tribunal is not required.
§ must state the reason for divorce but need not state the cause of the breakdown
§ Both parties have consented to the term of the divorce i.e- division of the matrimonial property, custody of the children.
§ Faster than a Single Petition

2. Contested Divorce

§ The marriage must stand for at least 2 years except for exceptional or hardship cases
§ Reconciliation proceeding must be go through before present the petition for divorce, which mean the Certificate of Tribunal is required. ( it takes about 6 months )
§ Must state the reason for break up and specify the cause which shows the marriage has completely broken down and has to prove at least one of the following:-

a) 2 years separation;
b) 2 years desertion ( left for continuous period at least 2 years);
c) Adultery;
* The act permits the alleged adulterer or adulteress (if any) as co-respondent.
* There may be a prayer that the co-respondent be condemned in damages in respect of the alleged adultery
d) Unreasonable to be with the marriage ( cannot expected to live with him/her)

(E) Other grounds for divorce

(a) Presumption of Death

§ If the other party to the marriage has been continuously disappeared for at least 7 years and the petitioner has no reason to believe that party has been living within that time.

(b) Conversion to Islam

§ Such conversion does not cause a marriage dissolved automatically but it provides a ground for the other party who has not converted to petition for divorce.
* take note that the party who has not converted only may petition for divorce 3 months later from the date of conversion
* the petition may be made before the expiration of the 2 years of the marriage

(c) If husband is not living in Malaysia or does not consider Malaysia to be his home
- wife petitioner still may present the petition for divorce if :-
(i) her husband left her or was deported from Malaysia, and he considered Malaysia to be his home before the desertion or deportation; or
(ii) she has lived in Malaysia for 2 years preceding the presentation of the petition.

(F) RIGHTS of the affected parties

(a) Custody of the child :

§ May apply at any time, even no divorce or judicial separation case.
§ Rebuttable presumption – the biological mother will have the custody of the child who are 7 years old and below.
§ Court will take into consideration of the welfare of each child of the marriage, wishes of the parents and whether the child can express independent opinion.
§ All the cases of custody or maintenance of the child the court must have regard to the advice of the welfare office.
§ The order for custody may include the matters relating to the child’s residence, education and religion, temporary guardianship to someone other than the legal guardian and the right to access to the children for parent or relatives not granted custody.
§ The custody of the children shall expire on the attainment of 18 years old, or where the child is under physical or mental disability on the ceasing of such disability, whichever is later.

(*the definition of the “children” is fall under the purview as below:-
i. children of both parties who is under age of 18 years old; or
ii. the children of one party to the marriage accepted by the other party; or
iii. an illegitimate child; or
iv. child legally adopted by either of the parties to the marriage.)


(b) Maintenance ( to wife or/and to child ) :

To Wife and to Children

§ Assessment of maintenance is based on primarily on the living lifestyles that they are used to, the financial affordability of the husband, the needs of the wife, number of children, ages of the spouses, how long the marriage has lasted, who is more at fault for the breakdown of the marriage, contribution made during the marriage.
§ If the husband has another woman, the court might give less maintenance to the wife because the husband has another family to take care of.
§ Maintenance to wife shall cease if the recipient dead, or re-marries or lives in adultery with another person.
§ The maintenance to the children shall expire on the attainment of 18 years old, or until completion of the first degree.

§ Arrears of maintenance for wife as well as children are recoverable for a maximum period of 3 years.
§ Arrears are recoverable if they accrued before a receiving order was made against the defaulter and shall be provable in his bankruptcy.
§ Arrears are recoverable as a debt due from the defaulter’s estate if they accrued before the defaulter’s death.


(c) Division of Matrimonial Property

§ Includes house, car, shares, cash in the bank and any other properties bought after the marriage.
§ The division of the property is usually 2/3 to the husband and 1/3 to the wife where there is no monetary contribution by the wife.
§ If the wife had made monetary contributions to the purchase of an asset, then the division is according to the contribution made.
§ If monetary cannot be ascertained, the an equal division of the assets will be decided by the court.

(d) Injunction

· Injunction to prevent the other parent from removing the child form Malaysia or for the right to remove the child out of Malaysia.
· Reversal of or injuction to prevent a sale transaction or transfer of assets which is intended t reduce the maintenance payments.
· Injuction to prevent the other party to the marriage from disturbing or bothering during or after the court case related to the marriage.


(G) Procedure for divorce

(A) Mutual Divorce

(1) Get a lawyer to file joint petition which state :
- details of marriage and children, if any
- previous court cases relating to marriage
- maintenance
- custody of the children
- right to access of their children
- division of the matrimonial assets

(2) Both parties must appear in court unless dispensation has been given by the court

(3) This process can be taken for 1year to 2 years.

(B) Contested Divorce

(1) Meeting by both spouses with the Marriage Tribunal
- the Tribunal will try to reconcile both of the spouses.
- the reconciliation process will be taken about 6 months.
- if the Tribunal fails to reconcile both of the spouses, a Certificate of Tribunal will be issued.

Exemption:-
a) The other spouse cannot be found (deserted); or
b) The other spouse refuses to attend the meeting; or
c) The other spouse has been imprisoned for 5 years or more; or
d) The other spouse is suffering from an incurable mental illness; or
e) The other spouse resides abroad and it is unlikely to come back to Malaysia within the next 6 months; or
f) Court is satisfied that the meetings are not practical.


(2) Get a lawyer to file petition which state:
- details of marriage and children, if any
- previous court cases relating to marriage
- proof of complete breakdown of marriage
- maintenance
- custody of the children
- right to access of their children
- division of the matrimonial assets


(3) The petitioner must appear in court but the other spouse (respondent) can choose not to appear


(4) This process can be taken more than 2 years subject to the complication of the case.


(C) Where DECREE to divorce has granted

x Once the court is satisfied that there should be a divorce, Decree Nisi shall be granted
x Decree Nisi will be made absolute after a stipulated period ( usually is 3 months )
x During the stipulated period, other spouse can be allowed to show why the marriage should not be dissolved (which mean if they are intend to get together)
x As long as the Decree Nisi has yet to be made absolute, the spouses may get together and thereafter apply for the Decree to be cancelled
x They also cannot re-marry to anyone within the stipulated period
x After the stipulated period expired, the court will make the Decree absolute
x once the Decree Nisi is made absolute – both parties can be re-marry

(H) OTHER RELIEFS

(a) Judicial Separation
§ This can be opted if one party does not want to divorce but refuse to live together
§ Do not require to attend the reconciliation meeting
§ Grounds are exactly the same as per the grounds for single divorce petition
§ This may be apply within 2 years of the marriage
§ The applicant may pray for maintenance and custody of the children
§ The parties cannot be re-marry
§ Can still petition for divorce


(b) Annulment of marriage (cancellation of the marriage)
§ Application can be made when the marriage is void or voidable

(bi) VOID marriage

(i) Either one party is still married with someone (former marriage was then in force) at the time of the marriage; or
(ii) a male person marries under 18 years old or a female who is above 16 years old but under 18 years marries without obtain license from Chief Minister; or
(iii) Both parties are under prohibited relationship; or
(iv) Both parties are not respectively male and female (same gender).


(bii) VOIDABLE marriage

(i) The marriage has not been consummated owing to the incapacity of either party to consummate it; or
(ii) The marriage has not been consummated owing to the willful refusal of the respondent to consummate it; or
(iii) Either party to the marriage did not validly consent to it - duress, mistake, unsoundness of mind;or
(iv) At the time of the marriage, either party, though capable of giving a valid consent, was a mentally disordered person within the meaning of the Mental Disorders Ordinance 1952 of such a kind or to such an extent as to be unfit for marriage; or
(v) At the time of the marriage, the respondent was suffering from venereal disease in a communicable form;
(vi) At the time of the marriage the respondent was pregnant by some person other than the petitioner.

(I) ADDITIONAL

Marriage outside Malaysia

Marriage outside Malaysia other than one solemnized in Malaysian Embassy is recognized as long as the following requirements are fulfilled:-
I. Legally married in that country; and
II. Each spouse would have been qualified to be married under his/her home country law; and
III. Either party is a citizen of Malaysia or considers Malaysia to be his/her home and both are qualified under Malaysian law to be married.

Presented By: Mr. Barry Tan Cheng Ho

No deadline no numbers?

Today, on 24 September 2008-- after the hearing of DSAI's sodomy charge in Court, the star online (ref: http://www.thestar.com.my/news/story.asp%20file=/2008/9/24/nation/20080924143912&sec=nation), DSAI was quoted as saying

“It is not an issue of deadlines anymore. Who could have anticipated that the Prime Minister would refuse to hold an emergency Parliament session when we already have the numbers?” he told reporters at the Jalan Duta court complex on Wednesday after the hearing of his sodomy case.

After half a year of declaration, the 916 declaration of takeover of government by DSAI has now come to an end. The plot- which DSAI claimed had more than 31 members of parliament defecting from BN government can be considered as one of the longest political saga in the history of Malaysia. Finally, the matter is coming to an end and BN government (previously known as "Pakatan") after reigning for 51 years, will continue to reign at least until the end of this term.

What say you?

Is this a good time to invest?

The year 2008 is certainly not good for the market.

Beginning of the year 2008, we have inflations, global fuel hike, the spreading of the "Sub-Prime" effect and the sudden increase of prices for all raw materials.

During the second quarter of the year, we have the "Political Tsunami" which hit the market at the heart and destroyed the confident of foreign investors in regards to Malaysia's political stability. Then, we have the disasters including earthquake, hurricane and cyclone etc all over the world which destroyed assets and reduce the liquidity of the market. We also saw the increase of petrol price of RM0.78 from the original RM1.92 to RM2.70 and most of the government's mega projects were put on hold.

During the 3rd quarter of the year, Datuk Seri Anwar Ibrahim makes his way back to Parliament and the rumours of whether the Barisan National Government will be replaced by the Pakatan Rakyat had put all the foreign investors on hold.

Now, we are at the 4th and final quarter of the year, is this a good time to invest?

If we analyze from the market, the petrol price hike seems to come to an end where the price dropped from the historical high of more than USD 140 per barrel to the current less than USD 100 per barrel. The drop seem to mark the end the mother of all inflations (petrol and transportation costs). We also see that the much publicised September 16 change government political strategy came to an end as nothing materialized. The festival seasons are coming and people seems to be more incline to spend.

We also see that share markets are going down to a point which doesn't reflect the true performance and potential of most of the public listed companies.

If we look at real estate, most of the projects are still on-going and there is still no sign of any abandoning of projects in the market unlike the 1997 crisis.

However, if we look at the political scenario, the dominant UMNO party will be holding their election end of this year and whether there will be political changes therein will affect the country tremendously.

We also have to look at the judicial system which remains unchange after the infamous "Lingam video clips" that may affect the confident on the legal system of Malaysia. This may not be good to encourage public confident to throw their money in the market especially the minority share holders.

We must also be aware that the unnecessary arrests made under ISA do have negative effect on people dumping money into the market.

Whereas in America, the "Sub-Prime" effect is still expanding. The forth biggest investment bank in America, the Lechman Brothers is currently in the midst of applying to the Bankruptcy Court in respect of its financial crisis whereas AIG, the well known international insurance companies are currently facing deep financial problems.

Until the end of this year, there are still a lot of risks which at the moment seems to be quite apparent but in the long run, this may be the drop that all investors are looking for -- before the market starts to bounce up again. This may be the golden opportunity that we are looking for.

Investment in the market involved risks, but if we have the extra cash that we can spare on assets that we can hold for a long period of time, this may be a good time to invest before your cash starts to devalue.

Press Freedom- is our government promoting it or otherwise?

In the dramatic incidents happened on 12.09.2008, 3 individuals unrelated with each other were arrested under the draconian law- Internal Security Act 1960 (better known as "ISA").

Raja Petra Kamaruddin, the editor of Malaysia Today (online news web) and well known "deep throat" in the Malaysia political arena was arrested in his house in Sungai Buloh, Selangor at approximately 1:50pm.

Tan Hoon Cheng, the reporter of Sin Chew Daily News (a famous local newspaper in Malaysia) was arrested at her house in Bukit Mertajam at approximately 8.40pm on 12.09.2008.

Teresa Kok, the Selangor Senior Executive Councillor, State Assemblyman of Kinrara, Selangor and Member of Parliament of Seputeh (Federal Territory of Kuala Lumpur) was arrested at 11:20pm during her journey home from a function.

These arrests were made after three local newspapers (namely Sin Chew Daily, The Sun and Suara Keadilan) were issued with show cause letter by the Home Ministry on why their publishing license should not be suspended/revoked.

All the 3 individuals were arrested under section 73(1) of the ISA which reads as follows:

"73. Power to detain suspected persons.

(1) Any police officer may without warrant arrest and detain pending enquiries any person in respect of whom he has reason to believe -

(a) that there are grounds which would justify his detention under section 8; and

(b) that he has acted or is about to act or is likely to act in any manner prejudicial to the security of Malaysia or any part thereof or to the maintenance of essential services therein or to the economic life thereof.

(2) Any police officer may without warrant arrest and detain pending enquiries any person, who upon being questioned by the officer fails to satisfy the officer as to his identity or as to the purposes for which he is in the place where he is found, and who the officer suspects has acted or is about to act in any manner prejudicial to the security of Malaysia or any part thereof or to the maintenance of essential services therein or to the economic life thereof.

(3) Any person arrested under this section may be detained for a period not exceeding sixty days without an order of detention having been made in respect of him under section 8:
Provided that -

(a) he shall not be detained for more than twenty-four hours except with the authority of a police officer of or above the rank of Inspector;

(b) he shall not be detained for more than forty-eight hours except with the authority of a police officer of or above the rank of Assistant Superintendent; and

(c) he shall not be detained for more than thirty days unless a police officer of or above the rank of Deputy Superintendent has reported the circumstances of the arrest and detention to the Inspector General or to a police officer designated by the Inspector General in that behalf, who shall forthwith report the same to the Minister.

(4) -(5)(Repealed).

(6) The powers conferred upon a police officer by subsections (1) and (2) may be exercised by any member of the security forces, any person performing the duties of guard or watchman in a protected place and by any other person generally authorized in that behalf by a Chief Police Officer.

(7) Any person detained under the powers conferred by this section shall be deemed to be in lawful custody, and may be detained in any prison, or in any police station, or in any other similar place authorized generally or specially by the Minister."

Raja Petra Kamaruddin (or better known by referring as "RPK") was arrested for suspected posting of seditious statements in his post regarding religion and in particular Islam.

Ms. Tan was arrested for reporting the statements of UMNO (the dominant political party in Malaysia") Bukit Bendera division chief Datuk Ahmad Ismail's statements and caused racial sentiments in the country.

Teresa Kok was arrested for allegedly involved in a dispute pertaining to a petiton to one Mosque in her constituency (which she denied involvement).

With Datuk Seri Anwar Ibrahim ("DSAI") announcement of political power swifting on 16 September 2008, these untimely arrests under ISA had caused stir in the now instable community and to which the public are shocked by rational of such actions taken.

On 13.09.2008, after almost 16 hours in arrest, Ms. Tan was released and the Home Minister had in a press conference said that she was arrested for ensuring her safety and to assist on certain investigation.

Leaving other issues aside, the arrest of Ms. Tan had raised public outcry on why the person suspected to make racial remarks was not arrested but instead it was the reporter reporting the statements which was arrrested.

The arrest of Ms. Tan really doesn't look good on the government or help our country in any way. The press freedom is currently under tremendous pressure and the public is not at all happy to it.

The thing is, what political wisdom would be exercised by the Government to help restore the image of Government which had said that they would be more democratic and allow criticism prior to this incident.

Press Freedom, is our government doing enough? Is our government promoting it or otherwise?

Are Malaysians ready to take the challenge?

After the 308 political tsunami, malaysia has had a new political landscape. People had made their choice to deliver the clear message : they want a change, they want a new malaysia!

Though the current political landscape's changes might have been creating a certain level of social instability and insecurity, due to the political power hunting game among the two political partisan, there were mix cum complicated feelings and the divided opinion among the 'rakyat'.

The ordinary street man may seek of stability whereby the country's economy keep on growing robustly and they have their current jobs secured; while those affluent groups may hope to see the stock market stop to go south and the foreign investors still continue to invest in Malaysia. Those businessmen may wish to see the current political conflicts ending faster because they are seeking for certainty of the future economic outlook. While there are a group of 'New Malaysians', mostly consist of young people who only have one thing in their minds, that is "the urgency of change" .

The emergence of the internet and its constant, revolutionary cum disruptive transformation have played a critical role to portrait the current political scenario in the country. The people ever since have a better insights towards democracy, they have higher quality of expectation towards their Parliament Members, and more importantly they want to say "enough, enough, enough" towards the corruption among the politicians, burgeoning criminal cases, higher inflation, limited employment opportunities and diversity.

On the issue of whether Malaysia is heading onto the right track given the current development, there were pro and cons among the 'Rakyat'.

Are people of Malaysia have the enough wisdom and ready to take the risk to create a new chapter for the history of Malaysia?

LO YU CHONG

Stability -vs- Instability

During the era of Tun Dr. Mahathir, the machinary of the government controlled media have alway propagate stability.

The stability that most of us would not treasure on the sole reason that we felt oppressed by the system then practise. We want freedom and we want democracy.

Under the leadership of our current Prime Minister, with all due respect, yes, freedom and democracy have larger space and boundaries, but cans of worms were openned up and the content of the pandora box starts to haunt us.

Freedom and democracy has a price-- the instability of the country. Do we want it? Will we be another Indonesia or Thailand or Philipines. I do not know.

What I do know is we chosen a path never taken before by Malaysian after the May 13 incident. Will it be for a better or worse future? We do not know. Will the instability be temporary or permanent? I do not know.

But there will always be risk in life, where are you now in the midst of nowhere -- oh my beloved Malaysia.

Tan Chun Ming

Forum (4) "Law on Corporate Tax Avoidance"

A. Introduction

1. Relevant Legislations (Revenue Law)

a) Income Tax Act 1967; and

b) Public Rulings issued by Inland Revenue Board (“IRB”) from time to time.

2. Self Assessment for Companies

a) Prior year 2001 – Official assessment system
Year 2001 onwards – Self assessment system (“SAS”)

b) Burden of computing the taxpayer’s liability shifted from IRB to the taxpayers

c) Form CP204 – estimate tax payable for a year of assessment and to be submitted to IRB within 30 days before the beginning of the new financial year of the Companies

d) Tax Audits by the auditor from IRB
- Via Street survey - to educate the public
- Purpose:
i) To make sure submission of income tax returns
ii) Payment of income tax



B. Judicial Attitudes Towards Tax Avoidance

1. Duty of the directors and those in charge of the affairs of corporations e.g. management of the Company to minimize tax by legitimate means. (as per the English case of Inland Revenue Commissioners v. Burmah Oil Co Ltd [1982] Simon's Tax Commissions 30)

2. Engaging the services of professional tax consultants.

3. Nothing wrong at all for a company to organize their affairs in a way as to minimize tax (as per the Malaysian Federal Court case of DGIR v. Rakyat Berjaya Sdn Bhd [1984] 1 MLJ 248)

C. Judicial Attitudes Towards Tax Evasion

1. It’s an offence under S. 114 Income Tax Act 1967 (please refer to the print-out)

2. Principles applicable by the Malaysia court to decide whether a tax scheme is illegal:-

2.1 If it is a sham or involves an artificial transaction designed to evade tax;

2.2 Sham / Artificial transaction – defined as something not natural / in the course of trade it is “not motivated by economic considerations (as per the Malaysian Federal Court case of CIT v. AB Estates Ltd [1967] 1 MLJ 89);

2.3 Understatement or omission or misstatement of facts – devise in the negative sense.

2.4 The taxpayer is not entitled to place himself outside the taxing statute by a devise.

C. Difference between Tax Avoidance/Mitigation v. Tax Evasion

Tax Avoidance / Mitigation =Legal Tax scheme/planning under the Malaysian revenue law
Take advantage of tax relief

Tax Evasion= Illegal tax scheme
Devise a scheme to exclude the taxpayers outside the taxing statute

Speaker: Soh Ghee Kian

For further and better particulars of the issue, kindly contact the moderator of the blog to get in touch with the Speaker.

The Dilemma of Gerakan

After the much surprised Political Tsunami in 308, Gerakan has been facing grave threats from all rounds.

After Tan Sri Koh Tsu Koon reigned the party, Gerakan after its establishment, had 1st time in the history lost the State Government of Penang.

To add salt to injuries, the heavyweight leaders of Gerakan such as Lee Kah Choon, Rhina Bhar, Tan Kee Kwong and the latest, Toh Kin Woon had decided to resign from the party.

No doubt as a party, Gerakan is one of the few parties which carries the noble ideologies of equality and nationalisms without looking at the race, religion and gender. However, the reality is that Gerakan has over the years, failed to champion the noble goals of we are the descesdants of Malaysia or Kita Anak Malaysia. In fact, Gerakan had shown itself to be a party which was based on professionals and non-bumiputras. In addition, it now can't even give the community a choice of non-chinese candidates in the General Election. Is it that the Chinese candidates of the party are much better than the non-Chinese in merits and securing the seat? This may not be the intention but creates unnecessary perspective in the Community.

Now, the grassroot of the party have even had the dilemma of whether to leave the Barisan Nasional for better future or not.

As a political party, Gerakan no doubt failed in its quest for political equality as it never succeeded in expanding the influence of the party or play a vital role in the formation of education or major policies of the Country.

If the party leaves Barisan National, it will have nothing left but to squeeze between Barisan National and Pakatan Rakyat in the next election. By doing so, it will prove itself to be irrelevant and replaceable.

Without a strong leadership and without proper strategies to woo over the support of Malays, Gerakan has no chance to survive in its own feet and this is a fact.

Forum (3) "Policies To Cope Economic Crisis, What can we as Malaysia Prime Minister do?"

INTRODUCTION

Before we go into the scenario of Malaysia, let us first look at the crisis that first haunted the capatalist economy in the Modern World. An economy crisis which was later known as the Great Depression which caused millions of people went bankrupt and many government fall as a result thereof.

We will first analyst the circumstances and policies of the Countries during the Great Depression era and see if what was the most effective way to overcome depression during that period of time.

Causes of the Great Depression

Recession cycles for those who believe in a large role for governments in the economy believe it was mostly a failure of the free markets and those who believe in free markets believe it was mostly a failure of government that caused the problem.

Currently there are 3 theories on the cause. First, there is orthodox classical economics: monetarist, Austrian Economics and neoclassical economic theory, all of which focus on the macroeconomic effects of money supply and the supply of gold which backed many currencies before the Great Depression, including production and consumption.

Debt

Debt is seen as one of the causes of the Great Depression.

In the 1920s, American consumers and businesses relied on cheap credit, the former to purchase consumer goods such as automobiles and furniture, and the latter for capital investment to increase production. This fueled strong short-term growth but created consumer and commercial debt. People and businesses who were deeply in debt when price deflation occurred or demand for their product decreased often risked default. Many drastically cut current spending to keep up time payments, thus lowering demand for new products. Businesses began to fail as construction work and factory orders plunged.

World comparisons during the Great Depression

Europe

The United Kingdom was unable to adopt major programs to stop its depression. That led to collapse of Labour and replacement in 1931 by a National Coalition (predominantly Conservative).

Canada & the Caribbean

In Canada, Prime Minister R. B. Bennett had increased tariffs on non-British Empire goods. This exacerbated the Depression and contributed to the growth of Hooverville-like camps of the unemployed in Canada. Belatedly, he came around to a Rooseveltian-Keynesian approach which met with the disfavor of both the courts and the populace, leading to his defeat in the elections of 1935.

The Caribbean saw greatest unemployment during the 1930s because of a reduction of consumption in the U.S. and Canada as well as in Europe.

Australia & Pacific

In Australia, James Scullin applied orthodox economic principles during the 1930s and cut government spending, which proved ineffective. During the 1940s, John Curtin and Ben Chifley were influenced by Keynesian economics and introduced policies with a New Deal flavour such as: increasing government taxation and spending; imposing economic regulation; and petrol rationing. Along with the stimulus of World War II, these measure proved productive and similar measures remained in place after the war. In Malaysia, during the global fuel-hike in the early Hanuary to August 2008, our government also did the same by cutting off the mega projects such as the 2nd Penang Bridge and so on. Which in my opinion is also inefficient.

In New Zealand, policies similar to the New Deal were adopted after the election of the first Labour Government in 1935.

Nazi economic policy

Policies

Nazi economic practice concerned itself with immediate domestic issues and separately with ideological conceptions of international economics.

Domestic economic policy was narrowly concerned with four major goals to eliminate Germany’s issues:

1.Elimination of unemployment.

2.Rapid and substantial rearmament.

3.Protection against the resurgence of hyper-inflation

4.Expansion of production of consumer goods to improve middle and lower-class living standards.

Outcome:

Between 1933 and 1936 the German Gross National Product (GNP) increased by an average annual rate of 9.5%, and the rate for industry alone rose by 17.2%.

This expansion propelled the German economy out of a deep depression and into full employment in less than four years. Public consumption during the same period increased by 18.7%, while private consumption increased by 3.6% annually. According to the historian Richard Evans, prior to the outbreak of war the German “economy had recovered from the Depression faster than its counterparts in other countries. Germany’s foreign debt had been stabilized, interest rates had fallen to half their 1932 level, the stock exchange had recovered from the Depression, the gross national product had risen by 81 per cent over the same period…. Inflation and unemployment had been conquered.”

German marriages increased from about 511,000 in 1932 to 611,000 in 1936, while births rose from 921,000 births in 1932 to 1,280,000 in 1936. Suicides committed by young people under 20 dropped by 80% between 1933 and 1939. Internationally, the Nazi Party believed that an international banking cabal was behind the global depression of the 1930s. Control of this cabal, which had grown to a position where it controlled both Europe and the United States, was identified with an elite and powerful group of Jews.

Practise:

The Nazis viewed private property rights as conditional upon the mode of use. If the property was not being used to further Nazi goals, it could be nationalized. Government takeovers and threats of takeovers were used to encourage complance with government production plans, even if following these plans cost profits for companies. For example, the owner of the Junkers (aircraft) factory refused to follow the government’s directives, whereupon the Nazis took over the plant, placed the owner Hugo Junkers under house arrest, then compensated him for his loss.

Central planning of agriculture was a prominent feature. the selling of agricultural land was prohibited. Farm ownership was nominally private, but ownership in the sense of having discretion over operations and claims on residual income were taken away. In Malaysia, most agricultural lands are owned by Bumiputeras, which consists mostly of Muslim. In accordance with Syariah law, distribution of estates are to be divided in formula provided and no will can give more than 1/3 of the estate to a particular person. As a result, the lands owned by poor families were distributed to smaller and smaller portion by the generations until the land no longer viable to conduct agricultural works as each own only a small portion which is not cost effective.

Going back to German, central planning was achieved by granting monopoly rights to marketing boards to control production and prices through a quota system. In Malaysia, we too have the corporation which control this monolopy is Bernas but complaints were made by certain quarters which challenge the effective of the organization. The partice in German was that quotas were set for industrial goods, including pig iron, steel, aluminum, magnesium, gunpowder, explosives, synthetic rubber, all kinds of fuel, and electricity. A compulsory cartel law was enacted in 1936 which allowed the Minister of Economics to make existing cartels compulsory and permanent and to force industries to form cartels where none existed, though these were eventually decreed out of existence by 1943 with the objective being to replace them with more authoritarian bodies. Some of these laws were also similar to the ones we have in Malaysia nowadays.

In place of ordinary profit incentive to guide the economy, investment was guided through regulation to accord to the needs of the State. The profit incentive for business owners was retained, though greatly modified through various profit-fixing schemes: “Fixing of profits, not their suppression, was the official policy of the Nazi party.” However the function of profit in automatically guiding allocation of investment and unconsciously directing the course of the economy was replaced with economic planning by Nazi government agencies.

the proportion of private securities issued falling from over half of the total in 1933 and 1934 to approximately 10 percent in 1935–1938. Heavy taxes on business profits limited self-financing of firms. The largest firms were mostly exempt from taxes on profits, however government control of these were extensive enough to leave “only the shell of private ownership.”

Many companies dealt with the Third Reich: Volkswagen was created by the German state and was heavily supported by the Nazis; Daimler-Benz used prisoners of war as slaves to run their industrial plants. There has been some disagreement about whether IBM had dealt with the Nazis to create a cataloguing system, the Hollerith punch-card machines, which the Nazis used to file information on those who they killed.

Summary:

In Nazi Germany, economic recovery was pursued through wage controls, price controls, and spending programs such as public works.

America’s New Deal

Background:

The New Deal represented a significant shift in political and domestic policy in the U.S., with its more lasting changes being increased federal government control over the economy and money supply, intervention to control prices and agricultural production. This was the beginning of complex social programs and wider acceptance of trade unions. The success and effects of the New Deal still remain a source of controversy and debate amongst economists and historians.

The initial crash of the U.S. stock market occurred on Thursday October 24, 1929; then, on "Black Tuesday" October 29, the stock market fell even more than it had the week before. These events were the catalyst of a worldwide economic depression.

From 1929–1933, unemployment in the U.S. increased from 4% to 25%, manufacturing output reduced by approximately a third. Prices fell causing a deflation of currency values, which made the repayments of debts much harder. The mining, lumber, and agriculture industries were hit especially hard by the drop in values. The impact was much less severe in white collar and service sectors.

What Was the New Deal?

The New Deal was a comprehensive series of social and economic programs enacted during the Great Depression (1933-1941) by the Franklin D. Roosevelt Administration in order to solve the nation's economic crisis. Many of those programs are still part of our everyday lives today. It included a vast array of public works with which the Roosevelt administration fought the stagnation of the Depression.

President Roosevelt’s role:

Roosevelt entered office with no single ideology or plan for dealing with the depression. In the "First New Deal" (1933-34) many organized liberal groups (except the Socialist Party, which was virtually destroyed) gained much of what they had demanded. This "First New Deal" was thus a blend of self-contradiction, pragmatism, and experiment. The economy eventually recovered from the low point of 1932, with sustained improvement until 1937, when the Recession of 1937 brought back 1934 levels of unemployment. Whether the New Deal was responsible for the recovery, or whether it slowed the recovery, has been disputed.

Roosevelt formed what he called the Brain Trust, a group of academic advisers to assist in his recovery efforts. They sought to introduce extensive government intervention in the economy instead of allowing laissez-faire to run its course. Donald Richberg, the replacement head of the NRA, said "A nationally planned economy is the only salvation of our present situation and the only hope for the future."

The First Hundred Days

Having won a decisive victory in the United States presidential election of 1932, and with his party having decisively swept Congressional elections across the nation, Roosevelt entered office with unprecedented political capital. Americans of all political persuasions were demanding immediate action, and Roosevelt responded with a remarkable series of new programs in the “first hundred days” of the administration, in which he met with congress for 100 days. During those 100 days of lawmaking, Congress granted every "request" Roosevelt asked.

This first hundred days are now used internationally to judge the capability and the political will of elected government including Malaysia, Australia, South Korea and Taiwan recently after the election year. Many may know about the summary of 100 days in office done by the press but not many knows that this evaluation of 100 days in office actually started by Roosevelt in his New Deal.

Policies:

During the famous "First Hundred Days" that followed Roosevelt's inaugural between March and June 1933, Congress passed 15 major pieces of legislation. Among the major New Deal initiatives were the:

• Agricultural Adjustment Act (AAA), which provided funding to farmers to curtail their production to stabilize prices.

Agricultural Adjustment Administration (AAA)

The first hundred days produced a federal program to protect commercial farmers from the uncertainties of the depression through subsidies and production controls. This program began with the Agricultural Adjustment Act, creating the, which Congress passed in May 1933. The act reflected the demands of leaders of major farm organizations, especially the Farm Bureau, and reflected debates among Roosevelt's farm advisers such as Henry A. Wallace, Rexford Tugwell, and George Peek.

The AAA implemented a provision for crop reductions known as the "domestic allotment" system of the act. Under this system, producers of corn, cotton, dairy products, hogs, rice, tobacco, and wheat would decide on production limits for their crops. The AAA would then pay land owners subsidies for leaving some of their land idle with funds provided by a new tax on food processing. Farm prices were to be subsidized up to the point of parity. Some crops were ordered to be destroyed and some livestock slaughtered to maintain prices. The idea was that the less produced, the higher the price, and the farmer would benefit. Farm incomes increased significantly in the first three years of the New Deal. Food prices hardly rose at all, the rise in farm incomes was the result of the subsidies.

The AAA established an important and long-lasting federal role in the planning on the entire agricultural sector of the economy. The original AAA did not provide for any sharecroppers or tenants or farm laborers who might become unemployed, but there were other New Deal programs especially for them.

• National Industrial Recovery Act (NRA), which provided for codes of fair competition to regulate industry and for the first time in American history guaranteed the rights of labor to bargain collectively

The Administration insisted that business would have to ensure that the incomes of workers would rise along with their prices. The product of all these impulses and pressures was the National Industrial Recovery Act (NIRA) which was passed by Congress in June 1933. The NIRA established the National Planning Board, also called the National Resources Planning Board (NRPB), to assist in planning the economy by providing recommendations and information. Fredric A. Delano, the president's uncle, was appointed head of the NRPB.

The NIRA guaranteed to workers the right of collective bargaining and helped spur some union organizing activity, but much faster growth of union membership came before the 1935 Wagner Act. The NIRA established the National Recovery Administration (NRA), which attempted to stabilize prices and wages through cooperative "code authorities" involving government, business, and labor. The NRA included a multitude of regulations imposing the pricing and production standards for all sorts of goods and services. Most economists were dubious because it was based on fixing prices to reduce competition.

• Public Works Administration (PWA), which constructed roads, dams, and public buildings

From 1933 to 1935 Public Works Administration spent $3.3 billion with private companies to build 34,599 projects, many of them quite large. In Malaysia, the same was done by our Jabatan Kerja Raya (JKR).

• Federal Deposit Insurance Corporation (FDIC), which served to insure deposits in banks. In Malaysia, we now have the PIAM o insure deposits in banks.

• Tennessee Valley Authority (TVA), which provided for navigation, flood control, electricity generation, and economic development in the Tennessee River Valley, at that time one of the poorest and least developed regions of America. This is similar practise followed by Malaysia in the FELDA development area.

• Resettlement Administration (later the Farm Security Administration) and the Division of Homestead Subsistence created relocation opportunities for families. Other programs provided for the creation of three complete new towns and supported other struggling villages.

Many people lived in severe poverty, especially in the South. Major programs addressed to their needs included the Resettlement Administration (RA), the Farm Security Administration (FSA), the Rural Electrification Administration (REA), the Tennessee Valley Authority (TVA) and rural welfare projects sponsored by the WPA, NYA, Forest Service and CCC, including school lunches, building new schools, opening roads in remote areas, reforestation, and purchase of marginal lands to enlarge national forests.

The AAA was later been replaced by a similar program after been declared unconstitutional by the USA COurt. Instead of paying farmers for letting fields lie barren, this program instead subsidized them for planting soil enriching crops such as alfalfa that would not be sold on the market. Federal regulation of agricultural production has been modified many times since then, but together with large subsidies it is still in effect in 2008.

• Rural Electrification Administration (REA) –the development of a system to provide electricity to rural America.

• Social Security Administration

Two of the most recognizable/remembered programs of Roosevelt's administration were the Civilian Conservation Corps (CCC) and the Works Progress Administration (WPA) later known as the Works Projects Administration. The CCC was a special work program for unemployed young men whose enrollees planted trees and fought forest fires, built public parks, drained swamps to fight malaria, restocked rivers with fish, worked on flood control projects, and engaged in many other initiatives that

helped to conserve the nation's environment and make it available for recreation for millions of Americans. The WPA was a compilation of varied work projects that provided employment for artists, musicians, actors, authors, and laborers which helped to put millions of men, women and youth back to work. Through these and other programs, the New Deal began a vast documentation and transformation of the United States.

Today, the New Deal legacy still supports USA. Much of America's infrastructure was built by New Deal programs from 1933 to 1941, including roads, electrical systems, municipal power plants, water and sewage systems, and schools. Many government social programs have their roots in the New Deal, including major support for public education, public health and public recreation. Economic policies that were established include banking regulations, Social Security, and collective bargaining. People working in New Deal programs constructed many public buildings, public sites, parks, and public art including murals, sculptures and paintings. Programs promoted contributions to literature, music and theater and oral histories of the period. Most of all, the New Deal restored faith in the America's republic and its institutions.

Bank and monetary reforms

On March 9, Roosevelt sent to Congress the Emergency Banking Act, drafted in large part by Hoover's Administration; the act was passed and signed into law the same day. It provided for a system of reopening sound banks under Treasury supervision, with federal loans available if needed. Three-quarters of the banks in the Federal Reserve System reopened within the next three days. Billions of dollars in "hoarded" currency and gold flowed back into them within a month, thus stabilizing the banking system. During all of 1933, 4,004 small local banks were permanently closed and were merged into larger banks. (Their depositors eventually received 85 cents on the dollar of their deposits.) In Malaysia, for the reason of competitiveness, as at 2008, the banks in Malaysia have merged to ensure growth and financial stability in the local banks. In America, to avoid future "cures" the Congress created the Federal Deposit Insurance Corporation (FDIC) in June, which insured deposits for up to $5,000. The establishment of the FDIC virtually ended the era of "runs" on banks.

In March and April in a series of Acts of Congress and executive orders Roosevelt and Congress suspended the gold standard for United States currency. Under the gold standard, the Federal Reserve was prevented from lowering interest rates and was instead forced to raise rates to protect the dollar. Actions to suspend the gold standard included Executive Order 6073, the Emergency Banking Act, Executive Order 6102, Executive Order 6111, the 1933 Banking Act and House Joint Resolution 192. Anyone holding significant amounts of gold coinage was mandated to exchange it for the existing fixed price of US dollars, after which the US would no longer pay gold on demand for the dollar, and gold would no longer be considered valid legal tender for debts in private and public contracts. The dollar was allowed to float freely on foreign exchange markets with no guaranteed price in gold, only to be fixed again at a significantly lower level a year later with the passage of the Gold Reserve Act in 1934. Markets immediately responded well to the suspension, although it was assumed to be temporary. In Malaysia, during th 1997 Financial Crisis, our country under the leadership of Tun Dr. Mahathir, the then Prime Minister, had done similar actions. Malaysia have unpegged with the US Dollar and that any money taken out of Malaysia or above RM50 in currency value no longer be acceptable after a period of time. As a result of this, the liquidation of Malaysia economic remain solid and Malaysia survived the financial crisis without major restructuring and unemployment unlike Indonesia and South Korea during that period of time when IMF intervened into these companies.

In January 1934, Roosevelt raised the official price of gold to $35 per ounce, thereby devaluing the U.S. dollar by 41%.

Private gold reserves held outside the country (for instance in Swiss banks) were largely undetected and thus unaffected. Rich people who knew or suspected the move was coming or simply did not trust FDR's government therefore made large profits.

Recovery was steady and strong until 1937. Except for unemployment, the economy by 1937 surpassed the levels of the late 1920s. The Recession of 1937 was a temporary downturn. Private sector employment, especially in manufacturing, recovered to the level of the 1920s but failed to advance further until the war.

The Economy Act, drafted by Budget Director Lewis Douglas was passed on March 14, 1933. The act proposed to balance the "regular" (non-emergency) federal budget by cutting the salaries of government employees and cutting pensions to veterans by forty percent. It saved $500 million per year and reassured deficit hawks such as Douglas that the new President was fiscally conservative. Roosevelt argued there were two budgets: the "regular" federal budget, which he balanced, and the "emergency budget," which was needed to defeat the depression; it was imbalanced on a temporary basis.

Repeal of Prohibition

In a measure that garnered substantial popular support for his New Deal, Roosevelt, on March 13, 1933, moved to put to rest one of the most divisive cultural issues of the 1920s. Just nine days later he signed the bill to legalize the manufacture and sale of alcohol, an interim measure pending the repeal of Prohibition, for which a constitutional amendment (the Twenty-first) was already in process. The amendment was ratified later in 1933. States and cities gained additional new revenue, and Roosevelt secured his popularity in the cities, which were overwhelmingly well.

Outcome- Employment

Employment in private sector factories recovered to the level of the late 1920s by 1937 but did not grow much bigger until the war came and manufacturing employment leaped from 11 million in 1940 to 18 million in 1943.

Roosevelt nationalized unemployment relief through the Works Progress Administration (WPA), headed by close friend Harry Hopkins. It created hundreds of thousands of low-skilled blue collar jobs for unemployed men (and some for unemployed women and white collar workers). The National Youth Administration was the semi-autonomous WPA program for youth.

The most important program of 1935 was the Social Security Act, which established a system of universal retirement pensions, unemployment insurance, and welfare benefits for poor families and the handicapped. It established the framework for the U.S. welfare system. Roosevelt insisted that it should be funded by payroll taxes rather than from the general fund; he said, "We put those payroll contributions there so as to give the contributors a legal, moral, and political right to collect their pensions and unemployment benefits. With those taxes in there, no damn politician can ever scrap my social security program." One of the last New Deal agencies was the United States Housing Authority, created in 1937.

Defeat: court packing and executive reorganization

Roosevelt, however, emboldened by the triumphs of his first term, set out in 1937 to consolidate authority within the government in ways that provoked powerful opposition. Early in the year, he asked Congress to expand the number of justices on the Supreme Court so as to allow him to appoint members sympathetic to his ideas and hence tip the ideological balance of the Court. This proposal provoked a storm of protest.

In one sense, however, it succeeded; Justice Owen Roberts, switched positions and began voting to uphold New Deal measures, effectively creating a liberal majority in West Coast Hotel Co. v. Parrish and National Labor Relations Board v. Jones & Laughlin Steel Corporation thus departing from the Lochner v. New York era and giving the government more power in questions of economic policies. Journalists called this change "the switch in time that saved nine." Recent scholars have noted that since the vote in Parrish took place several months before the court-packing plan was announced, other factors, like evolving jurisprudence, must have contributed to the Court's swing. The opinions handed down in the spring of 1937, favorable to the government, also contributed to the downfall of the plan. In any case, the "court packing plan," as it was known, did lasting political damage to Roosevelt and was finally rejected by Congress in July.

As a result of the New Deal, political and economic life became politically more competitive than before, with workers, farmers, consumers, and others now able to press their demands upon the government in ways that in the past had been available only to the corporate world. Hence the frequent description of the government the New Deal created as the "broker state," To the New Dealers, the free market meant "cut-throat competition" and they considered that evil. It was not until the 1970s and 1980s that most of the New Deal regulations were relaxed.

The Roosevelt Administration was under assault during FDR's second term, which presided over a new dip in the Great Depression in the fall of 1937 that continued through most of 1938. Production declined sharply, as did profits and employment. Unemployment jumped from 14.3% in 1937 to 19.0% in 1938. Keynesian economists speculated that this was a result of a premature effort to curb government spending and balance the budget, while conservatives said it was caused by attacks on business and by the huge strikes caused by the organizing activities of the CIO and the American Federation of Labor (AFL).

But the Administration's other response to the 1937 deepening of the Great Depression had more tangible results. Ignoring the requests of the Treasury Department and responding to the urgings of the converts to Keynesian economics and others in his Administration, Roosevelt embarked on an antidote to the depression, reluctantly abandoning his efforts to balance the budget and launching a $5 billion spending program in the spring of 1938, an effort to increase mass purchasing power. The New Deal had in fact engaged in deficit spending since 1933, but it was apologetic about it, because a rise in the national debt was opposite of typical Democratic party policy. Now they had a theory to justify what they were doing. Roosevelt explained his program in a fireside chat in which he finally acknowledged that it was therefore up to the government to "create an economic upturn" by making "additions to the purchasing power of the nation."

In 1929, federal expenditures accounted for only 3% of GNP. Between 1933 and 1939, federal expenditure tripled, but the national debt as percent of GNP has hardly changed. However, spending on the New Deal was far smaller than spending on the war effort, which passed 40% of GNP in 1944. The war economy grew so fast after deemphasizing free enterprise and imposing strict controls on prices and wages, as a result of government/business cooperation, with government subsidizing business, directly and indirectly.

A major result of the full employment at high wages was a sharp, permanent decrease in the level of income inequality. The gap between rich and poor narrowed dramatically in the area of nutrition, because food rationing and price controls provided a reasonably priced diet to everyone. White collar workers did not typically receive overtime thus the gap between white collar and blue collar income narrowed. Large families that had been poor during the 1930s had four or more wage earners, and these families shot to the top one-third income bracket. Overtime provided large paychecks in war industries.

CONCLUSION

(I) Reasonable Usage of Manpower of the Illegal Immigrant

In Malaysia, I suggest that our country first dealt with the illegal immigrants in Malaysia. There are millions of illegal immigrants in Malaysia which eat out the lifestocks in Malaysia and at the same time evade taxes thus causing holes that reduce the money cycle in Malaysia.

We should first take stern actions to catch all the illegal immigrants in the Country and put them in concerntration camp whereby the labour forces will be used to support the plantation industries and construction industries and where they will be pay decently and welfare taken care of during the period of time where they are waiting for trial or deliver back to they home country.

To allow these work forces to lurk around in our country is not an option as it created more social problems and put pressure to the livestocks in our country.

As such, I propose that illegal immigrants must be dealt with in the most economic ways but of course their rights should be observed with dignity.

(II) CREATE NEW MARKET FORCE

I also proposed that we scraped the National Service (NS) which is viewed as no more than summer camp for the unemployed and business opportunities for the related fields.

I suggest that we replace National Service to National Youth Movement, to replace the plan of allowing 18 years old to join in and have fun (whilst the government suffered financially) to a new formula-- to drive them into the market on a compulsory basis and ensure that the strength of the youths are put into full use.

On rotation basis, they will be put into a 2 years programme whereby in every 3 months they will be move from agriculture, to manufacturing, then ICT and BioTechnology etc. The youths must understand the foundation of the national economy and treasure the technic use by the Country (at the same time explore their interest) then they must be expose to the latest technology whereby they will have hands on experience and learn how to shape the Country's future. Youths should not be just about exploring and having fun, it should also a market force to ease the Country's burden and not to be a burden to the Country.

I also proposed that military personnel should be made part time ie- half in labour forces and half training, this will prevent wastage of good manpower in the military in the time of peace. At the world of technology, numbers no longer counts. We need the military personnel to be in the modern technology world.

With the continuous labour force in Malaysia, we do not need illegal immigrant in our country to share a cake that they will save to bring back to their homeland.

(III) REDUCE INVOLVEMENT OF GOVERNMENT IN MARKET FORCE

The Government should only intervene in the case of economy crisis and not the everyday project. The Government will suffer a lot financially if it doesn't stop the financial support to Government Link Company. Should the Government continues to intervene with the free market, the Government will be bankrupt and the market force will be destroyed by the political will of the government.

I propose that the Government should be market neutral and withdraw its interest in the market and take back what has been given especially to the GLC (ie toll companies and plantation business) and be like a parent who stand back and watch his children fall and grow. Too much pamper and we kill our future.

These are my proposal if I am the Prime Minister to deal with the Economy Crisis. Labour forces creates market and market generates money, money attract investors and investors attracts opportunities. With opportunities we can spearhead new projects for the Companies.

Prepared by Tan Chun Ming

Sources Edited From Wikipedia

Forum (3) "Policies To Cope Economic Crisis, What can we as Malaysia Prime Minister do?"

Date : 26 July 2008

Time : 9.00 pm - 10.45pm

Venue : Puchong, Selangor