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Wealthy Malaysia Spending Like There's No Tomorrow



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May 21 2007
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Going by the rate and quantum of super-mega-projects initiated by the current Malaysia Prime Minister, Badawi, one must have a perception that this country is indeed a very very rich kingdom with hundreds or trillion of barrels of reserve oil undersea and millions of hectares of gold-deposits yet to be prospected.

You’ve heard the fantasy proposal to turn a section of the Johor into Iskandar Development Region (IDR) which will give Dubai, Shenzhen, Hong Kong and Bangalore a run for their money. It’s indeed one of the best brain-child architected by the premier if it’s able to attract a mind-boggling of over $105 billion dollars over the next 20 years (but who’s there to measure it at the end of 20-years?). Except for the Singapore’s Prime Minister Lee Hsien Loong pledged to support the IDR during his recent visit to Malaysia, it seems the IDR is good on paper only. But Lee stop short of saying how much the rich tiny kingdom is willing to pour into the project. In addition, Robert Kuok, Malaysia’s richest man so far has been very quiet on the whole idea even though he’s one of the advisors on board. Unless Robert Kuok is willing to pour half his fortune or Premier Lee is committed to inject money into this new per project, everyone should take it with a pinch or salt.

Early in May 2007, Badawi approved the US$7 billion 300km Kedah-Kelantan crude oil pipeline project to be undertaken by a non-listed group, Trans-Peninsula Petroleum Sdn Bhd. I’m surprise that Scomi Group (KLSE: SCOMI, stock-code 7158) wasn’t mentioned as some of the beneficiaries from this mega-deal. It could be due to sensitivities or the company could be already working behind-the-scene. And don’t forget the premier’s pledge to build “multiple” bridges connecting Malaysia and Singapore.

Also the Parliament House which was renovated at the whopping $90 million two years ago is now in need of $22 million alone just to “study” other government buildings suspected to be “leaking” as well. Expect nothing less than another $50 million to repair the leaking roofs, going by how the relevant ministry been drumming the seriousness of the leakages. Malaysia is perhaps the most business-friendly as far as construction sector is concern as all the developers are not liable for defect or poor workman-ship.

With such wealth, it only makes sense to approve the request for pay-rise for the government servants. And so, today is perhaps the happiest day in the life of these civil servants with the announcement of pay rises ranging from 7.5 to 35 percent which will costs the country additional RM 6.8 billion ringgit (US$2 billion) a year. Of course you have the Second Finance Minister Mohamed Yakcop’s assurance that the inflation will not be affected with such a move. 2007 is generally a good year with lots of good news and goodies compare to the year before, and you should be able to tell why. General Election is coming dude.

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