----~------~·~------~------~----~--- COVER STORY

ter success rate in the balloting proce . Everyone then focuses on the potential return. Of late, because of the market downturn since the end of March, another question is beginning to resur­ face: what is the risk? Investor~ will have to focus on both these issues - risk and reward - in the forthcoming li-. ting of BHEC. The danger for im es­ tors is in not focu~ing suffi­ ciently on the risks of the new listing creates in­ vesting public. All the better if project, for that can result in terest in the financial it is a large one - with more quite distorted valuations on the community and the in- shares to go around and a bet- company be1ng floated.

Aliran Montlrly 1997: 1714) Pagt 2 Floating The Bakun Sha~

Roller Coa~tcr On The KLSE

US-Aided Tobacco j.)nn~ In Asia Conquest

The Myth~ or 'Constructive Engagement' Independent But Still In Bondage

12 La,)outond G1"8phkbyLtttorSI}~rlmp.-...iuo 61. bl Flwr. \\'bfu Saw Khaw Lean. Current Concerru. 16 I'•~ Wtld, 10300 Pulau Pin•n•, Ma.la.)"io. Thinking Allowed 19 Ttl: 1\0.1·2621377 ··Ax: 1\0.1-262.2376

J]

Subscription 32

Aliran is a Malaysian non-governmental organisation listed on the roster of the Economic and Social Council of the United Nations. Guided by universal spiritual values. Aliran strh!!s for gl!nuine unity by promotmg Published by Aliran Kescdaran Ncgara (ALIRAN) ,odal justice and human dignity Membership is open to 12. Jalan Pantai Aziz Ibrahim, all MaJay:.;ans above 2 1. If you arc interested in joining 11900 J'ulau J>inang, ~lala}~ia. (Postal Addnoss: P 0 Box 1049. Allran, pleao;c contact the Iron Secretary at the address 10830 l'ulau J'inang, '\tata,~iu.) !thown in this page. Tel/ Fax: 604 -64157115

A/iran Mfmthlv 1997: 17(2) Page 3 ------., GREATER RISK the year 2003 and there is much that borne by the contractors. ABB of can go wrong between now and Sweden/Switzerland. If any of the The issue then is: what cost of eq­ then. Hence, its cost of equity is costs for the construction of what is uity should one usc? The basic ap­ necessarily higher than that of specified is higher than e~timated. proach advocated in finance text Tenaga and Malakoff. ABB bears the burden. However. if booh h to look at the stock mar­ during construction it is discovered ket return and then adjust for the What are the major risks for BHEC? that the design has to be changed, riskiness of the particular company These can be defined into three then the cost of the necessary 'varia­ in question. The market return main categories: tion orders· will have to be borne should be over a suitably long pe­ byBHEC. riod to average out short-term • Delays anomalies in market return. Over a • Cost over-runs Nobody really knows whether all 20-year period, the KLSE has re­ • Operational risks the aspects of construction of this turned 13.7 per cent on a com­ ma~sivc dam and connecting trans­ pounded annual b~is, which is a Delays can tum what appears an at­ mission link have been or even can fair estimate of cost of equity for a tractive project into a financial be taken into account in the design company whose shares are neither nightmare. For every year a project plans. This introduces much uncer­ more nor less risky than the aver­ is delayed, a high interest cost has tainty in a'iccrtaining the ultimate age market (or in technical par­ to be paid (which builds up each cost of the project. This is not pecu­ lance, where the beta is one). year with higher debt) and the posi­ liar to Bakun alone. A World Bank tive revenues. necessary to pay stud)' on hydroelectric projects in­ But how risky is a company like those debts. are pushed back. If it is dicated that almost all of them had BHEC? How do you decide given seriously delayed. the banks will be cost over-runs and delays. that it is not yet listed? A tempta­ very reluctant to lend more money tion that promoters of the project to a project that has thus become Operational risks relate to whether will lead you into i!> to look at the riskier. In Malaysia. ~>erious delays the dam will operate as planned. average riskiness of other power have not been a problem for infra­ ABB is providing a performance company shares on the market, i.e. structure projects: but Malaysia ha~ guarantee for the first few years. But Tenaga and Malakoff. The riski­ never undertaken a hydro project as this will not cover the risk of a ma­ ness or these shares, based on their large as Bakun and no country in jor canhquake. The island of Borneo fluctuations relative to the market, the world has installed a 600km is seismologically much more active is comparatively low. Their share underwater se.a cable to connect the than West Malaysia and this risk is prices do not fluctuate as much as source of power supply (Bakun naturally under-estimated from this most of the market. Technically dam) with the consumers of that side of the South China Sea. Also. speaking, they have a low beta electricity (in West Malaysia). if siltation is greater than expected, which reduces the cost of equity for then this IS not a design fauJt and the!>e companies relative to other It is difficult ar the outset to quan­ the nsk of Joy.er than estimated listed companies. tify the risk of cost over-runs. Cer­ water flow will be borne by BHEC tainly, this is a problem that our shareholders. To use the betas of power compa­ projects have faced in the past. The nies that are already operating to North-South Expressway, which Another operational risk can arise estimate rhe cost of equity for initially was estimated to cost RM4 from the vagaries of the weather. BHEC is another mistake to watch billion finally cost RM6 billion in­ The dam will get enough water if out for. The betas (share fluctua­ stead. The cost for the Pergau dam the yearly rainfaU is close to the av­ tions) of these stocks is low because in Kelantan is reported to have erage that has been calculated based I the companies have steady doubled from initial estimates. on past rainfall data. Howe\'er. cash fl ows and earnings that areal­ yearly variations can mess thing~ uu• ready streaming in. The positive With the Bakun project, an element quite a bit. It has been estirn:lled that cashtlows for BHEC only come in of risk of cost over-runs is being if there is lower than a' erage rain------

A/iran Monthly 1997: 17(4) l'agt 4 fall for three years in arow, the dam vesting in companies that are al­ If this is the rate of return that eq­ will be unable to generate the mini­ ready up and mnning, why should uity investors will get from the mum amount of power tharir is sup­ they invest in a start-up company project, it is not surprising that for­ posed to supply Lo Tenaga and with earnings only six years down eign investors are showing only SESCO. Given the bigger varia­ the road (assuming no delays)? lukewarm interest. Plans to offer a tions of weather that we have been That is six years of risk for things portion of the shares to foreign in­ experiencing in the last few years lOgo wrong. vestors are now being scrapped. (perhaps due to the greenhouse ef­ Why should _investors take a return fect?). one should not ignore such There is much potential downside below the market average for a possibilities. but litllepotential upside-at most, project with risks much higher than ifthe work is speeded up, the dam practically all listed companies? If After the initial guarantee period, might be completed slightly ahead this is an issue that cannot be sold any risks of any sort of under-per­ of schedule but that would only to foreign investors, is it one that formance will result in below-ex­ raise concerns over the quality of local investors should be subscrib­ pected retums for investors in the construction. (The Nortb-SouthEx­ ing for? company. There would be greater pressway was completed 14 months assurance that problems will not ahead of schedule, but within three No doubt the proponents of the suddenly crop up after AB B · s guar­ years an embankment holding up a project will want to go ahead be­ antee period is over if the propo­ hillslopc collapsed and the earthfell cause once the project is running, nents of the project had vast expe­ onto the highway, ki11ing a lorry at­ the earnings may be huge and rience in hydro-power operations. tendant.) cashflows strong. Bur to look only ButEk:ran's experience in this area, at potential returns without taking prior to undertaking the BHEC The only reason investors would into account potential risks is to ig­ project, is zero. buy BHEC shares is ifthe projected nore the basic lesson of finance return was substantially higher than theory: high risks require high re­ Here, we must re-emphasise that the average market return. That turns. Low retums can only be jus­ risks for this project come not only would then compensate them for tified by low risks andBakun is not from operating the dam, but also the risks they have to bear. The rate a low-risk project. There is no way from the relatively untried technol­ ofretum for this project must be sig­ a sane investor should buy the ogy in transmitting electricity nificantly higher than 14 per cent shares if the return is not much more through submarine cables over such for it to be an attractive investment than the J 4 per cent expected return Jong distance!.. Investors may not for equity investors. of the market as a whole. have forgotten what happened THE PROBLEM when the cross channel cable un­ How much higher than 14 per cent? OF INDUCTION der the Penang bridge caught fue That is hard to say, but even an ex­ not too long ago. This happened pected return of 15 per cent is not Investing in the stock market will long before the cable's expected materially different from 14 per always mean bearing risks. To in­ useful life ended. cent. A return of something like 17 vest in companies where there are - 20 per cent or above would ap­ no immediate earnings and where HIGHER pear to be the minimum to make this this is a long wait before the project RETURNS NEEDED a project worth considering for eq­ is completed is to take on much Bearing these risks in mind. what uity investors. more risk than normal stock market sort or return should the market investing. The discounted cash flow require of BHEC? On average the Does BHEC provide this sort of re­ (DCF) valuation method has vari­ stock market returns about 14 per rum? lts prospectus is not out yet ous pitfalls.(see attached). cent per annum- should there­ but reports in the Asian Wall Street turn on BHEC be higher or Journal indicate that the internal Many analysts may get it wrong lower? If equity investors can get rate of return (TRR) for the project simply because it is not the method a return of J 4 per cent from in- is about 11 per cent. generally used for valuing Malay-

Aliran Mont/Uy 1997: 17(4) Page 5 r

sian companies -just about all listed Malaysian companies arc al­ ready making profits and are pay­ UNEASE OVER ing dividends. These immediate VALUATION METHOD profits and clividends can be valued to determine the worth of the shares Some common mistak ('S to watch out for using well-defined models and methods. For companies where the For a project like the Bakun dam. Thu.o;, Petronas Gas has fallen earnings are many years ahead, the valuations naturally centre on from RMI2 to RM9, Powertek valuation is more complex and. the discounted cash tlow (OCF) from RM6.50 to RM4.50 and therefore. much more likely to see methodology. There are no earn­ Litrak from RM6 to RM5. errors. This explains the under-per­ ings until the project is up and formance of stocks such as Petmnas running which will only be in the For analysts who have been pro­ Gru,, Powertek and Litmk. full-year 2003. So, the favourite moting these stocks, the weak­ valuation method of our ana­ ness of the general market is Malaysian retail investors seem to lysts, price-earnings ratios. is convenient excuse. And when think that they cannot lose in sub­ thrown out of the window. the market does pick up. they scribing for initial public offerings can elect to choose more aggres­ (!POs). Most shares lhat are listed 1be expected cashflows for the sive stocks for the market re­ arc initially offered at well below Bakun project are fairly well de­ bound. and conveniently forget their market value. Thus, Malay­ fined (even if the risks are not). the more "defensive'' NPV Based on these estimated ones. "Move on from your mis­ sian investors are used to doubling cashflows, the inve.'ltment com­ takes!" sccm.s to be the preva­ or tripling their money when they munity will apply what is con­ lent motto among the invest­ succeed in ballotmg for new shares. sidered an appropriate discount ment analysts in Kuala Lumpur. rate to get the net present value Here the problem of induction ap­ (NPV). or in layperson's tenns: CMIIPI.OWS& plies. As Benr.tnd Rus~IJ once put today's worth) of positive DISCOUIIT M1'8 it in a philosophical context: a ca'>hflows in the future. But Bakon will be alisliag lbat chicken that is fed every morning most analysts and 1mes101'S will will go toilS owner every morning One senses, however, an element have to look aL And tbe key to expecting its feed. even on the day of unease among our analysts in getting the valualioo riP' is (I) when the owner decides it i~> time this valuation method. Only a estimate correctly the to wring ilS neck. handful ofcompanies are valued casbflows. and tbell (2) apply on NPV: Malakoff, Petronas the right diSOOUillrate. Are stock market investors heading Gas, Powertek, Lilrak. Yet, apart for a wringing of their necks with from Malakoff whose ~tuck bas Geltins lbc cashOows correct the flotation of BHEC? When it moved up as it moves past the will be compaalively simple. investment phase and into the Tbe best cstimaft# will be based comes to Bakun. it may be more positive cash flow phase, none on the amount of power to be prudent to be chicken-hearted than of the other companies has been sold to TCD88BNuional Berhad chicken-brained! 0 an outrightly successful invest­ (1N8)81ddlie;Sarawak electric­ ment story. ity~ (SESCO). The selling Dr Subranumillm Pilltly pnc:es bave also been set. Oper­ Analysts have often used too low atilig cost estimates will be pro­ is Aliran Trea..~urer and a discount rate and pushed up die vided by Ekran and will be veri­ head ofthe Finance Sec­ valuations ofthe stocks. Foreign fiable against other r;ucb hydro tion at the School of investors who see that these projects outside the country. As Management in a local valuations are not justifiable would be expected from a plaar university. then sell down on lhese shares. that uses free water to sener-

Alira11 Mmulrlv 1997: 17(41 Pafl,e 6 power, these costs will be low ference in the world: I 5 percent which is somewhat lower than as a percentage of revenue. is 1.5 times I0 per cent . A project the cost ofequity. However, the that is viable at the low erdiscount W ACC one arrives at depends r In calculating casbtlows, there mte may not.be financi ally viable crucially on the estimated aver- I is a mistake often made by ana­ at the higher rate. age debllequity ratio. A mistake 1 lysts not .used to this methodol­ would be to use the dcbllequity ! ogy: adding in the interest in­ The reason is simple. P,or projects ratio when the project is just be- come from projected rising ca.1S 1be next step in cashtlow analy- ca.~h to add interest income to will look for any way t ojustify a sis is to calculate the cashflows the next year's cashflow. To put lower discount rate. And so the available to shareholders each it simply. one can work out what concept of a weighted average year after meeting the debt re- RMlOO income per year for the cost of capital. or the catchy ac- paymenbl and interest expense. next three years is worth today, ronym. WACC for short. is intro- This cashflow, to equity inves- but to calculate that and to add duced.Theideaisthat the cost of tors, must be discounted at the what would be the interest on debt is (funnily enought) lower cost ofequity- quire naturally rising cash if that amount is not than the cost of equiry. To put it as it is the remm to equity .in- taken out is to commit a basic another way, you place les5value vestors. mistake in DCF analysis. on tbe money you bon:Ow from the bank than the 010ney you put To apply the lower W ACC WHAT SHOULD._. in yourself. Since interest cm"t is (rather than cost of equity) on -~RATIIIBI an allowable elq)CDSC mcalculat-· casbflows to equity investon iJ Trickier, however, is the issue ing your tax (it brings down the another basic mistake in DCP of what discount rate to use. tax you pay). debt is an attractive analyses which is oftea Diade •.' Valuations~ notoriously sen­ way to brinJ dowa the average This may lead to high valua- sitive to what may seem a small COSt of capital used for a project. tiona for a company, which ui- change in discount rates. What's timately are not justifiable and the big difference between 10 So, by combining the lower cost may result ia share prices fall- per cent and 1S per cent? For ofdebt withtheccstofequity,one ing after reaching unsustainable DCF analyses-it is all tbe dif- gets a weighted cost of capital bips.Cl

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A/iran MmrtJr/1•1997: 17(4) /'og~ 7 COVER STORY

ROLLER • COASTER

...--- ON THE KLSE ~ ~ Bulls and bears can maul individual speculators .

All th1s changed on 28 March. When Bank Negara relea<>cd its 1996 An­ Why Is die Kuala Lluapur Stock Exrll•nge (I(LSE) iD sudt nual Reporr. it announced restriC­ .,.....meod now? Wby was It, at last tile Seeoad Bc.nt, tions on lending by banks to proper­ Ia such bullish mood UJdll onlyl'eeelltly?ln tbls article, RAM tics and for share financing. leob at recea1 moves to pot the hnkes 011 ~specula­ tive ..,..In die market. Be urges tbe IDdiYidaal bm!stor Bank lending for properties was lun­ to plan eanltdly or to use the senicel oftoad IIUUIIIge1'S to itcd to 20 per cent of their total loans aftld ...... , a Yldba of 'S)'IIdlad.s' aad foreign lave. (although various types of property ten who are ahnly8 oae step ahead. loans, including loans to owner-oc­ cupiers, were exempted from the limits). for share margin accounL'\ including loan~ to stockbroking com­ 111;121911 a ' • panics. the limitlmposed was 15 per cent of the total loans of each hank. 611) MARKiiT TUMBLED QJl The impact on the market came as a !Bl shock. to most. In two week.,. the !D) Composite Tnde\ wa., down 15 per cent and the Second Board Index had 1IIJ fallen 20 per cem. Many counters on 4111 both the Main and Second Board fell

:Bl more than 30 per cent. Some counter~ almost ba)\'ed in \alue Dl within a month. 2!1) What happened" The Bank Ncgara mew.. ures were designed to prevent

UP WE('..() ... fu StconJ Board Jurged itl /996 speculation in the property market (hence the exemption for loans tO ntil the end of March, Making money. it seemed, wall owner-occupiers) and in the srock­ those who were "play­ easy. Just ask your broker or markel. This was to prevent a ing'' the stock market knowledgeable friends \s.hich 'buhble · developing in either mar­ were having a party. ln stocks were going up. Buy the!>e ket and to avoid a dramatic cra..,h in 1996. the KLSE Composite Index counters and they would general!~ property and share prices in the fu­ rose 24 per cenl. That was noth­ give you nice gams. The \\Orst that ture. ing compared to the Second Board could happen is tbat the !>hare which surged 125 per cent be­ price did not move mucb: but if But if the measures introduced by tween early 1996 and february that was tbe case. just s\\ itcb to the Bank Negar.t were pre-cmpthe, as 1997. next touted stock. they were announced to be. then why '------...... ,..------

Alim11 Mtmtlllv IY97: 17(4 ) Page 8 ------did share prices fall so bard and so then join in. The syndicates, how­ [ quickly? ever, start selling the stocks as it comes close to the target price to lock Quite simply, speculation was al­ in their gains. ready rampant rnthe stock-market. FOREIGNERS Hence. the fall in share prices. Prop­ LOOKING FOR GAINS erty prices, so far. have remained stable. A foreign dimension also comes in which exacerbates the volatility of The fervour in the stock market wa'> the market. Foreign investors are approaching the heady days of 1993 continuously on the look-out for 800 1.900 when everyone heard stories of J JASOND J FMAM markets that promise gains greater neighbours making a bundle in the than their home markets. Develop­ market. If your friend Chan was Kuala Lumpur Singapore ing econorrues that are growing by lnde.IC 1,059.51 1,990.20 nm.king easy money from the mar­ 7-1 0 per cent annually provide more ket with no particular financial ex­ AND THEN DOWN AGAJN! opportunities for investors than de­ pertise other than knowing which Tire nurrkn nunbled after Ba11k Negara veloped coumries where economic stoch to buy, then it would seem annotmced rt nrictimtf growth ranges from zero to 4 per quite easy just to follow Chan's lead. cent. Buy what he buys. Why be left out Not only does the system allow in­ of the party? dividuals to take big positions in the For developed economics, the rate market but tb.e larger players, some­ of growth is naturally slower. Thus CONTRA SPECULATORS times known a<; ·syndicates'. sense investors there, through professional The settlement period also encour­ that this is an opportunity to make fund managers, look at vanous ages individual investors to pum. Tf money. emerging markets in Asia, Latin you are imroduced to a broker by America. Eastem Europe, and Africa someone who has good standing and The retail punters will buy stocks for countries where the economic vouches for your credit worthiness, where there is a lot of volume, that situation 1s showing more promise then the broker allows you to trade is, action in tile market indicating and where shares should go up more. without any down-payment. that something is happening. All the better if there is a story on why the Malaysia is always a market that for­ Not only that, you can buy and sell counter should be going up and what eign investors will be interested in. shares within seven working days target level tb.e insiders were look­ This is partly due to our strong eco­ (or. taking into account weekends. ing at. nomic growth and al<;o partly due to nine days) with credit provtded by our Large market. With our utilities the broker. If you clear your posi­ So, the syndicates can quietly accu­ (Telekom, Tennga and Perronas Ga-;) tion within seven working days, then mulate a particular counter. When listed together with a number of you just collect the gain you have they have a sufficient position. they other large companies (such as made in that period or pay your bro­ start buying and selling in greater Maybank. Genting, MAS, MISC. ker for any loss. ln effect, you are volume so that a signal goes out that and UEM), Malaysia is an emerging given tinancing, at the discretion of this stock is in play. market which provides foreign in­ the broker. to easily buy and sell up vestors with the potential to take to RM50.000 worth of shares on Then, price targets get revealed and large positions .in fairly big compa­ "contra", that is, without forking out spread around. Retail investors. who nies. any money. have no clue about what determines the value of stocks, jump in because Most other developing markets have You can do that with one broker, the share price is supposed to go up muchsmallercompanies listed. This and there is no way the system can say from RM4 to RM8 per share and makes the job of foreign investors tell if you are doing it with other the stock c urrently is only at more difficult. To invest the huge brokers as well. Get introduced to RM5.00. amounts at their disposal, a market other brokers. and you could be with only small companies will mean playing contra up to a couple of hun­ Few wi II care to check on what could that the investor will have to study dred thousand ringgit- with little or possibly almost double the value of and monitor many different counters no initial cash payment yourself. a company. JJ the !.hare is going up, to pump in their available funds.

A/iran Mmuhly 1997: 17(4} Page 9 Smaller companies are also riskier thinking this way means a wave of up. Greater participation by local because they are not generally as selling comes through and share funds. rather than the direct partici­ well followed; thus. when an invc!)­ prices in the targeted market usually pation of individual investors. will tor wanL<> to sell, there may not be a fall by more than warranted. al:-.o reduce marlct volatility. ready buyer. For larger companiC!> such as Genting or Telekom, how­ REDUCING MARKET FOREIGNERS NECESSARY ever, there will always be a buyer VOLATIUTY? Restricting foreign investment in the and there j!) very hrlle "exit" risk. Should the authorities seck to reduce market - given the \Oiatility they the volatility in the market? There­ cause - is tempung. but would be bad Although Malaysm ·s market is natu­ cent announcement by the KLSE for the market. Our stock marlet has rally attractive for foreign investor:-., that from July the setllcment period become too large for it to be now their appetite for Malaysian stocks will be shortened by two days is al­ restricted to just local investors. The varies. Sometimes foreign investor:-. ready a step to reduce speculation total market capitalisation (total mar­ go on a buying spree taking the among retail investors. ket value of all listed companies) of prices significantly higher. At other the KLSE stands at RM800 billion - times, when their view on the By reducing the settlement penod to about three times the country· s Gross economy changes, they chuck these five working days. punter'\ have two Dome!>tic Product (total output of the same stocks violently down. days fewer to play ·contra'. Tills country in a year). might di:-.suade some. a:-. there lS a If foreign investors thinl that our shorter pcnod for stocls to go up and The market is simply too large to growth will slow down but growth make the gains necessary to cover move without foreign investment. in another country, say, Hungary. brokerage and other cosL.... Less di­ Restrictions on foreign investment will pick-up, then they will sell their rect retail partictpation in the mar­ will take the market down and then Malaysian portfolio and buy Hun­ ket will curb the sentiment swings make it very difficult for the marlet garian stocks. of non-professional investors from as a whole to rise. Large new Ji,t­ affecting share prices. ings, for instance, that ofBakun H;r ­ And foreign investors generally droelectric Corporation. would then move in herds. They are advised by However, even with just five days be very difficult to carry out success­ large broker companies such as to play the market without putting fully. (Whether the listing of Balam Baring.s. Morgan Stanley, Mcrill any money down, many punters is .financially viable is a wlwlly dif­ Lynch. When these investment ad­ would !)till be tempted to put their ferelll matter. l~'hich our cover ar­ visors put out a 'sell note' on a par­ money on a hot stod. Evenrually, ticle addresses - Ediwr.} ticular country. it vestor thinks it is better to dump first stocks, would generally avoid stocks when the large player:-. Ill the market before others do. But all of them that are simply tipped to be going I have already heard it - that is. \\hen

Aliran Momhly 1997: 17(.1) I'Me 10 it is already old news. Those who Shrewd investor:; buy when the mar­ unit trusts. however. Not all have still buy the Mock at the late stage ket is offering stocks at a discount. experienced fund managers.lt is thu.., of its rally will often find that they They sell some or their holdtogs crucial to choose a fund management are buying when others are selling. when the market is hot and prices company thal has a proven track high. These ·contrarion • investors, record and continues to keep its top Tn a bull market when most stocks in the style of Warren Buffet. are the fund managers. are rising. this may not matter much ooe..c; that make huge gains over the as individual investors can always long haul. Those that follow the For many, the stock market is like a switch and try their luck with some crowd eventually get trampled on. casino. Too many people ::.ee it as other counters. Markets, however. ~;omething to play for quick gains. are inherently cyclical. and if inves­ CAREFUL PLANNING For them. the market correction will tors are always fishing for some Not all investors have the pauence come as a painful lesson. stock that will make a big move. or the time to invest in the manner then they will be exposed to the required to make money in the long­ Investing in the market i.s an in­ market when it ultimately turns run. This IS where unit trust<, and herently nsky business. Stocks down. fund management companies have provide a higher rerum than flxed a role. These companies pool the deposits. but that is because of the At that potnt, just about all stoch funds of various investors and higher risk involved- share prices punters hold wlll fall. Their losses spread lt over a range of stocks seen can come down and stay down for wi II get compounded and there is no as having good prospects. a while. telling when. if ever, they will re­ cover their losses. Individual investor::. who pul'i their The market provides gains only for funds with professional fund man­ those who are pauem and know what But there are other styles of invest­ agers thus gets the benefits of risk they are doing. Those who arc im­ ing. Warren Buffet, the second rich­ diversificution (their funds are patient and ignoram but want to est man in the world after Bill Gates. pooled to buy a range of stocks) and "play" the market are providing capi­ advises investors to look at invest­ the ability of a professional to pick tal and potential prorits to others. ing in the market as if one were buy­ good stocks. Bull markets are great while they ing into a business. One should be last, but when the bear sets in these looking for companies that have an There are a number of newly listed players will get mauled. 0 advantage in thetr business. that have good management and strong growth prospects in their industry. Unit Trust Funds In Malaysia (Summary ot Slalill(ks as at April30 1996) And one should buy when the price ExCluding PNB Including PNB No. of,_.,...... ~ l9 30 is low. Determining whether the NQ. of Appcoved Pamela• 71 73 price is low takes effort - learning Tolal Aprovcd Fund Size• 16.665 billion UDiiJ 40.985 billioa unib valuation techniques and studying Units in~ 9.921 biRion allks 34.241 billion umts me record of a company. Those who No. of AciJelda 1.319.&39 6.984-12:7 believe there arc short-cuts to wealth Total Net ASfiCt Value (JIIAV} of'Punds RMI0.459 billion RMS3.18S billiOn are either fooling themselves or KLS& Mubt ClpilaliSation RM731.370 billioa RM13U70 biDioa breaking the law. C.. ef NAV 10 KI..SE Mdel CapitiJkarion Ul1ft 1.21CJ.

A general point can be made on buy­ GOwf..,.,.S,oaarllf PriMt" ing when prices are low. This is .No. of App8Yecl PUDds 44 26 ~ ia Cin:uJadoo 3.617 bi.llioa uaill 27.9371!iPiao .... when share prices have fallen and NAV JtM4.193 biUion RM46.9JB bilfioa others arc generally not interested in stocks nny more. The market l'rlwllil ,,.. should be c;ecn as a potential busi­ No. of App:oved FI!Dds 47 ness negotiator: at certain times it is Unit in Cin:ulalioo 6.304 billioa IIDib NAV RM6.267 biDioa willing to pay you a very high price for your stocks, at other times it is willing to offer you the same stocks at bargain discount prices. DON'T GAMJJLI:i: : It~~ safer to pill your money in unit tntst funds

A/iran Monthly 1997: 17(4) Pagl! II always had special admiration and love for each other. At the TTERi) funeral of Karam Singh in 1994. --The Editot -~ Hamid Tuah. with tears in his 'ALlRAN MON'T~\..'i eyes. lifted Karam Singh and P.O. BOX 10&\9 kissed him on the forehead.

Both Hamid Tuah and Karam Singh did not compromise their principles and beliefs. but stood for the people's causes We welcome letters from readers. These moy be edited lor purposes ol space ond firmly clarity. The v1ews may not be those of AURAN MONTHLY Pseudonyms ore until the very end. We salute accepted but oil letters should include the writer's name ond address. letters these giants who led the people· s should preferably be typewritten with double spocing; II handwritten they should movements for justice. be legible letters should be addressed to the Editor, ALIRAN MONTHLY. Ong Siew Latzg of Hamid Tuah's arrest in both Petaling Jaya the Selangor State Legislative IIIIIIDTUM Assembly and Parliament. He also managed to get Hamid Tuah LISIIN TO,_ VICI .. Siti Nor Hamid's article on her released from prison on this oc­ -IIOT,.._ FEANiiiATOIIS late father Hamid Tuah (A/iran casion. Monthly 1997: 17(1) was an in­ teresting account of the peasant At the Lime, Dr Tan Chee Kboon According to a Bemama report leader's life and struggle. had not yet been elected to Par­ on 31 March 1997. Foreign Min­ liament and me Selangor State ister Abdullah Ahmad Badawi Hamid Tuab stood out as an Assembly: he was elected to said that Burma's Foreign Min­ examplary figure of peasant re­ them onJy in 1964. ister Ohn Gyaw had given an as­ volt against the forces of feudal­ surancethat~u slirns,especially ism and capitalism. He fought May 1 also point out that the next the minority Rohingya, will not without personal interest, and did meeting between Hamid Tuah be oppressed. not sell his integrity for position, and Karam Singh took place at title or wealth as some politicians the General Hospital in Kuala Badawi said that this ao;surance and a few social activists have Lumpur in 1967. This time they was given to the Malaysian am­ done. met as fellow political detainees bassador Lo Burma, Abdul Wahab under the Internal Security Act Harun, in Yangon the day before. I would like to point out an error (TSA), and not as client and law­ in Siti Nor Hamid's otherwise yer. Karam Singh was detained Tt appears that both Badawi and excellent article. The opening up for the Asahan Long March and our ambassador in Yangon have of land in Sungai Sireh by Hamid Hamid Tuah for opening up land accepted Ohn Gya\\ · s empty and Tuab in J960 was actually in Telok Gong. This was the time hypocritical ·a~surance'. It is ut­ brought to the limelight by the when Dr Tan Chee Khoon terly amazing that both our For­ late Karam Singh, a lawyer as brought up their detentions in eign Minister and our ambassa- 11 as a Socialist Front MP bothParliamentandtheSelangor dor in Yangon are so naive and amansam) and Selangor State State Assembly and not in 1960. gullible. Their acceptance of the e mblyman for Serdaog. SLORC rnilital') junta's worth- am Singh raised the nla__u_er_ _ H_am_ id Tuah and Karam Sing~ss 'assurclflce' il-l like accepting I

A/iran Montlrlr 1997: 17(4} Paf!.e 12 1 HiLler's and Stalin's 'assurances' Rohingya-Muslims out of before long we will see cracks on that they were not oppressing Burma. Youths were herded into the walls of our beautiful new minorities and dissident<> in their warehouses where reports of700 homes built in 1991. If work con­ respective countries. Muslim youth suffocated. During tinues at the present pace and pit- prayer, SLORC troops shot down ing starts so close to our homes, It is indeed a shame that our dip­ a mosque manyring 200 Mus- we may be in danger of another lomats arc pretending to be ig­ lims. The number of Muslims Prangin Mall fiasco or even an­ norant of the atrocities perpe­ women and girls raped during other Highland Towers collapse. trated by the Burmese military 1992 was higher than any other against ordinary Burmese minority group in Burma. A survey of the terrain here will people, including the Muslims, Mosques were destroyed, looted show that high rise condomini­ for at least 35 years. and burned. Over 225,000 ums on such a steep slope may Rohingyas that year fled to face the risk of collapse. Have the As Mwilimedia Internet Edition Bangladesh." people concerned carried out se­ has recently pointed out suc­ rious soil studies to fmd out the cinct! y, in 1982, General Ne Win Instead of listening solely to the suitability of the soil for this mas­ redefined citizenship so that the SLORC military junta, our dip­ sive project? The project has led Rohingya-Muslims who had in­ lomats should spend some time to the cutting down of hundreds habited northern Burma for hun­ and make some effort to listen to of trees with much loss of wild­ dreds of years were considered their victims, including the Mus­ life. Residents now face a poten­ illegal aliens. How can the Ma­ lim-Rohingyas. tial health ha1ard. laysian Foreign Ministry be un­ aware of this? Fan Yew Teng We would like to highlight this Kuala Lumpur ro the Department of Environ­ It continues: ..... what was once ment and the Ministry of Health. the richest nation in Southeast ln December 1996, at least one Asia. since 1988 Burma has been person in this housing estate suf­ declared by the UN as one of the fered from dengue fever. The world's least developed coun­ place was then fogged. The cul­ tries. Likewise, while SLORC Prime land and undulating hills prit, we believe, is the construc­ claims of its ' restoration· of used to cover the lush grounds­ tion site of the proposed Fettes Burma. SLORC spends 40 per now scarred with brown earth, Villa. cent of the national budget on the dust, tractors, lorries. concrete military aimed to combat its own slabs. Fettes Villa, a group of We urge the DOE to study people. Its claim to 'law and or­ high-rise condominiums is being whether there has been any der' forces nearly a million built in the area behind Persiaran breach of the Environmental Im­ people to slave labour. 40.000 Halia I, 10470 Penang. Heavy pact Assessment (ElA) condi­ women and girls to prostitution, lonies ply this route laden with tions in this case. We hope that 300.000 people to flee to to earth and other material for con­ the president of the Penang Island neighbouring countries, and 1.5 struction and create a persistent Municipal Council had carefully million to be displaced froms noise. All the birds, squirrels and studied this project before ap­ their homes within Burma." other wildlife have long since left proving it as there seem to be this scenic place for a quieter many questions left unanswered lt adds: "SLORC has shown no haven elsewhere. We, the resi­ here. tolerance of Muslims either. In dents, alas, have to stay here and 1992, SLORC went on a ram­ put up with the noise, the dust, Dr Margaret A Femandez page to force, or ki II, the the blasting of rocks. No doubt, Penang

Aliran Monthly 1997: 17{4) Pagt /3 pleads guilty, he or she shall be believe that the protesters have allowed to make a plea for le­ a legitimate right to assemble niency. lf he or she does not and to peacefully express their plead guilty, the disciplinary solidarity with the Palestinian authority shall call witnesses struggle. The subsequent arrest I am extremely surprised that and examine relevant docu­ and detention of about 250 calls have been made to expel mems (Article 50). and then demonstrators was heavy­ students who participated in "the student shall be invited to handed and unjustified. the demonstration at the give his/her evidence. call any mosque in front of the Univer­ witness or produce any docu­ Despite the UN peace process, sity of Malaya. Certain proce­ ment'' (Article 51). lhe Israel Zionist government dures have been laid for disci­ ha" not shown any sincerity in plinary action against students. These procedures are spelt out a just and peaceful settlement very clearly in the case of Uni­ with the Palestinian people. According to the Disciplinary versity of Malaya. and I believe Until today, Israel still refuses Procedure. Part V. Article 45: they exist for the other univer­ to recognise the righi:J) of the sities too. I hope they wilJ be Palestinians to their homeland. "A student who is found guilty adhered too closely .1 am of the Meanwhile the killing. tortur­ of a disciplinary offence shall opinion that expulsion should ing and detention of Palestin­ be liable to any one or any ap­ be the last resort and will not ian people continue under Is­ propriate combination of two be found necessary in this case. raeli occupation. or more of the following pun­ T think there is a need to allow ishments: peaceful demonstrations to be The Malaysian government has held in order to express genu­ a formal position of opposition (a) reprimand; ine grievances. to Zionism and support for the (b) a fine not exceeding two self-determination of the Pales­ hundred ringgit; Dr Syed Busin Ali tinian people. By allowing the (c) suspension from any or all President, PRM entry of the Israel cricket team, of the facilities of the Uni­ the Malaysian government is versity for a specified pe­ weakening its position and may riod; be seen to be implicitly endors­ (d) exclusion from any part of ing the continuous violation of the University for a speci­ human ri ghts by the Israeli gov­ fied period; SUARAM is appalled by there­ ernment. As long as the (c) expulsionfrom the Univer­ cent police action in violently Netanyahu government contin­ sity." dispersing a peaceful demon­ ues to sabotage the Palestinian stration in Universiti Malaya peace process. the international Article 46 requires a student against the visiting Israeli community and the Islamic who appears to have commit­ cricket team. world should not lift their dip­ ted a disciplinary offence to lomatic sanctions on Israel. We appear before a disciplinary SUARAM expresses its full cal1 on Prime \linister authority, which. according to support for the demonstrators, Mahathir, who ha" previously Article 48 will explain ''the whose intentions were to shown principled suppon for facts of the disciplinary of­ peacefuJiy express their oppo­ the people's struggle in Pales­ fence alleged". sition to Israel's participation tine, South Afnca and Bosnia. in the Carlsberg-ICC Tourna­ to maintain a firm and consis­ Under Article49, ifthestudent ment hosted by Malaysia. We tent stand against Zionist ag-

A/iran Monlhl)' 1997: 17(4)Pagl' /4 r;ession. in this country, PRM is not sur­ prised that Lim Guan Eng has We believe that the violent dis­ been found guilty~ but we are JUNAID REFUSES persal and arrest of protesters in rather surprised at the severity THE GOLD COINS the University of Malaya has tar­ of the sentence. The outcome nished Malaysia's standing. The of this case has very serious im­ government has nor only com­ plications, because it will make One ofJunaid's follow­ promised its stand on Palestine, it very difficult in future for ers came to him with a it has also actively suppressed members of parliament and the people's voice of solidarity leaders of political parties to purse fuD of gold coins. with the Palestine struggle. make what they consider to be I Therefore. any further action to fair comments on matters be­ "Have you any more punish the protesters is unwar­ lieved to be of public concern. gold coins?" asked ranted. Junaid. I Justice must not only be done We also strongly disapprove of but must be seen to be done. In the proposed use of the Univer­ this particular case it might not "Yes, many more." sities and University Colleges be seen to be done because Act (UUCA) against student pro­ whereas Guan Eng bas been testers. This clearly shows that charged. tried and fined, an­ "And you are attached the UUCA is an instrumenL tore­ other party allegedly involved to them?" press the bac;ic rights of students. with it has not been charged - ln light of this, SUARAM reit­ in fact the charges against him "I am." erates its previous call to abol­ have been withdrawn. Of ish the UUCA. course the Malaysian Constitu­ tion tells us that everyone must "Then you must keep In conclusion, SUARAM de­ be treated equally before the ~istoo,foryourneed mands the following: law. is greater than mine. Since I have nothing 1. The immediate release of all On behalf of PRM, I wish to ex­ detainees from the demon­ press our sympathy to Guan and desire nothing I am stration; Eng. I am confident he will re­ much wealthier than 2. That charges against the pro­ main steadfast. We know he you are. you see." testers be dropped; can still appeal, and we hope 3. An inquiry into the use of that he will succeed. But, what­ harmful chemicals and vio­ ever the outcome of this appeal The heart of the en­ lence in the dispersal of dem­ later, we believe the present lightened onstration; setback will not discourage him is like a mirror: 4. The abolition of the UUCA. from serving the people in a h grasps ttothing. re­ more determined manner Elizabeth Wong through other ways open to fuses nothing: Coordinator him. 1 am sure when circum­ it receives but does not SUARAM stances change, he will be re­ keep. deemed or absolved.

Dr Syed Husin Ali LKnowing how justice- op_e_r_a_te_s ___ ~__ _P_r_es_i _dent P_RM______

Aliran Momhly 1997: 17(4) l'agt> 15 11 ~ .:-c::~ Aliran supports Gerak. the Malay­ sian Academic Movement's view that the huge gap in salaries between lecturers and professors in the new scale upon corporatisation of univer­ sities should be narrowed.

Such a huge disparity is not only unjust but will abo trigger an exo­ dus of young and energetic lecturers - whose expertise and contribution arc sorely needed - out of public uni­ versities into the private sector. Ir will stance, not so long ago a group of abo deter intelligent young Malay­ [I Malaysians demonstrated against the siam, from entering the univer:.ity lr United States' punitive action profession. against post-Gulf War Iraq. And Aliran is concerned by Prime when South Africa was still &rripped This apparent pampering of a small Minister Dr Mathathir by the apartheid system. Malaysia group ofpeople is elitist in approach. Mohamad's reprimand against was involved in the campaign to bar It may also demoralise younger lec­ more than 200 PAS members and that country from participating in turers - something which the local university students who staged an international sporting competitions. universities can do without. anti-Israel demonstration re­ Were we also stupid then? cently, which he catcguru~d a:. a Young lecrurers !-.hould be offered a 'stupid act". To punish those. particularly the starttng salary that is attractive and university students. who had commensurate with the additional We fail to understand how such a bravely come forward to show year:. spem in acquiring higher de­ gathering of concerned Malaysians, their displeasure- in a manner grees and adequate to meet today's whose primary purpose was to reg­ that conforms to the dictates of a high cost ofliving. Subsequently. the ister publicly its indignation over the democracy - against Israel's salaries should increase substan­ belligerence of the Nctanyahu re­ militancy is to give a wrong sig­ tially. gime, could be easily mi<;construed nal to the international community by the Prime Minister as evidence and also to fellow Malaysians who As for professors. most arc likely to of Muslims' irrationality. arc equally concerned about jus­ stay in the universities as the present tice, peace and democracy. sa lanes enjoyed b) them are already The staging of the public demonstra­ very high. tion, which is in itself a legitimate But more than that, hauling up these act in a thriving democracy. would demonstrator~-., who are actually Apart from offering better salaries, have been regarded by the civilised against the presence of the Israeli local universities can also amact world as a show of solidarit)' with cricket team in Malaysia. could be more young people to work for them the besieged Palestinians and a con­ misread by the international commu­ if the intenecrual environment as a cern for justice. nity a-; a whole that Malaysia appear~> whole is improved. ror instance. to have shifted slightly in its policy some professors could provide in­ This is not the ftrst time that Malay­ on the Israeli-Palestinian conflieL spiring leadership and an intellectual sians have staged demonstrations booM by activcl) participating in re­ over international issues which Ma­ Executive Committee search and b) publi,hing their work laysia feel~-. strongly about. For in- 10 April/997 - instead of merely holdmg on to ad-

Aliran Mtmlhl\· 1997: 17(4) PuKe 16 I ministrative posts for year.. on end. have also risen. The poor are fllld­ Such unscrupulou'> officials and ing it increasingly harder to make organisations should be exposed But more than that, the government ends meet. They cannot afford the and seriously dealt with. has a social responsibility to play a exorbitant rates charged by private bigger role in providing good ter­ hospitals. The deputy prime minister seemed tiary education instead of leaving tt to be familiar with the modus to the whims and fancies of market We resent the implication that the operandi of these people when he forces. Such positive action will government is providing charity by disclosed details of Lheir abuses. ensure that our universities will con­ providing "more than 90 per cent tribute meaningfully to the chal­ subsidy." Where does the Govern­ According to him. donations re­ lenges ahead. ment get tlle money for lhe hospi­ ceived for specific purposes bad tals? lt is from the taxes we pay as been diverted to finance the over­ Dr Wong Soak Koon citizens. If all public amenities are seas tours of their officials. to buy ExcoMember to be privatiscd and if we have to expensive clothing for themselves lOApri/1997 pay higher 'tolls' for everything, to acquire new furniture for the1r what arc we paying income tax for? offices. To ftnance the perks for our minis­ ters? What we fail to understand is why did be refrain from naming and Instead of raising outpatient fees. the shaming them publicly'! ln not do­ government should reduce its waste­ ing so. he has been unfair to the Aliran is deeply concerned over the ful expenditure on grandiose many who conduct themselves proposal to review the outpatient fee projects. What is more important, it with integrity. He has unwillingly at government hospitals and eli nics. should increase its allocation for tainted their reputation as well. healthcare, which is less than 2 per When officials talk about a 'review', cent of GNP. This is pathetically low Don't these welfare, sporting and it usually means they are looking for compared with the hcalthcare spend­ non-governmental organisations some excuse to raise fees. We have ing of more developed countries. function as registered bodies, re­ to look at this proposal in light of quiring annual submission of re­ moves to privatise or corporatise Ani/ Netto ports and statements of accounts general hospitals- for the Malaysian E:rco Member to the registrar? experience has shown that rates in­ 12 Apri/1997 variably rise just before a body is Why weren't the fraudulent activi­ privaused. Such a fee hike will make ties of these organisations detected it more lucrative for the new own­ and action taken? ers to opcMe the privatised body as a 'business'. If with the existing rules and regu­ lations, registry officials are un­ Health Minister Chua Jui Meng Aliran is shocked to learn from in­ able Lo act, it is doubtful that they claims that the ··more than 90 per formation disclosed by deputy prime will be any more effective in the cent subsidy" on outpatient treat­ minister, Anwar lbmhim that there furure with "stringent and proper ment and medic111es is no longer have been abuses of public dona­ guidelines, which is suggested as applicable because the people's in­ tions by welfare foundations, spans a means to check these abuses. come has increased. He said that the association~ and NGOs. fee increase would enable the Gov­ More rules do not produce greater ernment to provide higher salaries It is morally reprehensible if funds accountabi I i ty or ensure proper in­ for medJcal personnel to curb their solicited and procured for welfare tegrity. Crooks always have a way exodus to private hospitals. purposes have been used for un­ of getting around rules. related activities. We would like to remind the minis­ With so many details of abuses ter that prices of essential goods This is clearly fraudulent conduct. available and disclosed to the pub-

Aliran Momhh 1997: 17(4) Page 17 ~hat is it that prevents the the Prime Minister that in Malay­ Member of Parliament, which re­ I ~~t·h~rities from prosecuting these sia there are a number of newspa­ quires him to comment on issues of nefarious characters'? pers, particularly lhe so-called public and national concern and to \ ernacular ones. which report represent the interesl'> of his constiru­ P Ramakrislma11 criticism of the government. How­ ents in KotaMelaka.l.im, one might President ever, lhesc are by and large not the have thought, was merely perform­ 12 April 1997 mainstream press unlike the news­ ing his duty. papers that have a bigger reader­ ship and influence. which are pri­ Moreover. Article 10 of the Feder.tl marily read by political leaders, Constitution explicitly guarantees intellectuals and professionals. this fundamental right of freedom of Aliran shares Prime Minister Or expression. Mahalhir Mohamad's view that In addition, lhe prevailing pattern certain media organisations that of ownership and comrol in Ma­ h was for these reasons that Alinm publish untruths are committing a laysian media ao; a whole 1s a cause had called upon the government to form of corruption- a malpractice for concern. It can give rise to con­ drop all charges against the Kou1 that certainly should earn the flict of interests, particularly Mclaka MP when the trial began in wralh of concerned ciliLens living where media concerns have direct January 1996. in a democracy. or indirect links to lhe ruling parry. Such links pose a monumental Under the circumstances. Aliran Such media outfits are not only obstacle to those who are striving deeply regrets that the Malacca High doing a disservice to their sub­ to achieve editorial fairness and Court has found him guilty of of­ scribers but, in many cases, arc accurac)', and justice. fence:, under the Printing Presses and also depriving the people of vHal Publications Act and the Sediuons and relevant information lhatthey Unless these and other related Act. require to make informed choices problems are tackled, untruths as in their daily lives. a form of corruption may prove to Many Malaysians are perturbed to be as difficult a social ill to over­ note that there have been olher cases This aside. certain media focus too come as money politics. where charges against cenain impor­ much on the ruling elite and/or the tant government personalities have business sector to the point of Dr Mustafa K A nuar been either amended or dropped al­ marginalising alternative views Exco Member together. whereas in Lim's case. the and certain groups, such as the 19 April 1997 charges were pursued to their ulti­ dispo~sessed. in society. This is mate end. indeed unjust, undemocratic and uncaring. Such biased reporting is Even after lhc court verdict, and as reprehensible as being 'eco­ ...... however the government or the AG's nomical with the truth .. II chambers might rationalise iL many Malaysians from all walks of life re­ In a thriving democracy and in a Ever since the Rahim Tam by Cbik main disturbed by the outcome - civil society. the views of various case hit the headlines in I 994, a~ lhe government should be aware groups and individuals need to be various critical views have been of by now. presented by lhe media. In concrete expressed over lhe way it was terms. this means lhat in most issues handled. There \>vas a perception Ultimately. this is what malleT!>: de­ confronting society. the press Will among the public, rightly or spite lhe Kota Mclaka MP'!. convic­ have to report praise for as well as wrongly, that it was not a run-of­ tion, there is no moral victory for criticism against the government in the-mill case. tire government ifjustice is not see11 order to fuJiy inform the citizenry to be done. I on •ssues thai concern them. One of the most vocal critics of this maner was Lim GuanEng '"ho high­ Executi•·e Committee e to a certain extent with lighted the ca.'ie. Given his role as a 30 Apri/1997

Aliran Month/\ 1997: 17(41 l'aRr- Ill I I' m most concerned that Abu Hassan I might not be able to put together a team that can help him run a clean I government capably, as he has prom­ I ised he will do. lmagine, not a single I one of the 30 Selangor UMNO Exco I or Assembly members was "clean and capable" enough to be appointed I ISelangor MB.

Apparently. some were "clean but not capable". A second group was I·•capable but not clean" (including you know who), and a third group I {the majority) rumours say, was "neither clean nor capable'·. Like I said, the MB-designare is in for a rough ride. Be Me'. I r.iiiiiii;;;;:;;:;;;;;;iiiiiiiiil ' As for the Aliran president, why he·sl 11 Have you heard this joke about just singing the blues! • !!!!!:!~~~~:=!!!!!!LI I Malaysian cabinet ministers and Remember our prime minister re­ others by a local stand-up comic? marking a few years ago that he was There is a karaoke singing contest against public litigation claimants I at Dataran Merdeka involving some demanding exorbitant amounts in I YIPs. Tt looks like a rough ride ahead for damages when suing others? He Selangor MB-designateAbu Hassan warned then against an "American What is their choice of songs? Omar, if you ask me. situation" developing in our country I that would result in a loss for all I Mahathir - 'My Way' (no other First, he has to contest the Perroatang Malaysians since the costs incurred way). Anwar Ibrahim - 'I'll Be by-election. He will win, of course. would only be passed on to consum­ There'. Ghafar Baba - ·ru Never But imagine the ceramah (talks), the I ers. Forget'. Rahim Tamby Cllik - 'I hand-shakes, the endless smile!>. His Don't Like To Sleep Alone'. campaign must also be squeaky­ It appears that some people have for­ Muhammad Taib- 'For A Few Dol­ clean. Does that mean the usual not- I gotten his wise counsel. It was bad lars More'. ue Kua11 Yew- 'Bridge so-clean electoral tactics must be put enough when a prominent biJlion- Over Troubled Waters' on hold? aire-businessman first sued a busi­ 1 ness magazine and several journal­ Here are some of our own requests: Second, he might not find much sup­ ists for libel and damages totalling I port from his own UMNO col­ RMl 0 million some three years ago, Samy Vellu - 'You're So Vain'. leagues in the Selangor State Assem- and won. Muhammad Taib - ·one Way bly. No, T'm not referring to the Ticker'. Ling Liong Sik- 'We've 1 point that Sujak (apparently a favou­ That case is still pending. Having Only Just Begun· (to tackle KL's rite ofthe Sultan's), who was antici- lost hls appeal at the Court of Ap­ tr-affic woes). Rafidah A.ziz - 'Yes­ pating the MB job for himself, might peal, the 'accused' then went to the terday'. Siti Zaharah - 'Love Will 1 not render his full support. Nor am Federal Court. The hearing origi­ Keep Us Together'. Razaleigh - I referring to any suggestion that a nally scheduled for January 1997 '(Take Me Home) Country Roads'. disappointed Zainal Dahalan, who was subsequently postponed. Kit SU:mg - 'Do You Know (Where rushed back from his Mecca pilgrim- You 're Going To)? Nik Aziz - 'The age to be on call, might not be as But now there's another wealthy Impossible Dream'. Pairin - '1 Who ! forthcoming as Abu Hassan might businessman, the Ekran chairman . Have Nothing'. Pandithan - 'Let It want. ling Pek Kbiing, suing journalist M

A/iran Monthly 1997: 17(4) Page 19 would be ab­ I Can the Pnme Minister clarify who sorbed by the will absorb any losses incurred by government. Bak:un, given the confusion he has created over national and pnvatised The government projects? Going by the PerwaJa wa\ absorbing the logic. if the government regards loss because ··in Bakun as a nat1onal project 11 should those days. Eric absorb any losses the dam incurs, the Chia was running way it ab:-.orbcd Perwaja's losses. the plant for the government. He But will the government actually was not a share­ absorb any losses from Bakun? 'Cos holder". Presum­ if it won't. then the dam is really a Bakun Oam : Pri1·ari1ed pmjt•cr or IUI/ional project ... ably, this means or pm·arise1f. nariona! pmjecr? pri\'atised project. not a national one. that PerwaJa Steel G G Pillay for libel and RM 100 mil­ ~ was then a ··national project". so the By the way. has anybody seen Eric lion m damages. No\\. th1s close govemmenL would absorb the loss. Chi a recently'? friend of the Prime Minister's if. not So far. very clear. being very friendly to the PM. Ei­ ther that, or there's one set of ad­ Speaking about the Perwaja situation 'I PENANG, OH PENANG! vice for business tycoons and an­ afterprivatisation, he then declared, I other set for ordinary folk; in fash­ '·Maju is a majority shareholder. If ionable parlance this is cal led Ithey wam ro lose money, it is up to Now that the Pet rona.'> Twin-Towers 'double standards'. them··. Crystal clear. have dwarfed Komtar. and the MSC will simply outctu.... ~ aD) combination And did you notice how the enraged So here we have the Prime Mini~ter of Pcnang Net. disk-dri\'e and disk­ Ekran boss was tailing of the Bakun implying that a privati\Cd proJect is related production. promises of wa­ Dam project as a "national" project'? different from a national project. fer production and more localised And then Mahath1r h1mselt smd, ..It Well and good. .R&lJ work on the bland. some Pen­ f is very much a national project." ang government leaders are thinking But. strangely, for the Bakun Dam, hard. and apparently not-so-bard too, Presumably, "national" include!. you IMahathir seems to blur that distinc- on how to maintain some edge over and me. But how can it be. in this 1 lion. Ting himself doesn't under- KL and the other states. case, when the project was awarded stand the difference, or, he knows the in toto, without an open tender, and differe~c~ all. too well. and i_s si~- I This is allth~ more necessary since without our involvement, to a com­ ply ant1C1paung the future, JUSt ill l Georgetown s reputauon as "the pany with no experience 111 build­ case. dirtiest city in the country.. (you first ing darns. Wtll lhe profit<; that ac­ beard it from the P~t. remember?) crue be national too - to be -,hared still holds. Add to this Its confusing by you and me? Surely not. road syMem and a growing reputa­ tion for traffic jams, and ... surely Again, the PM has some wise words Penang does nm lead anymore. So on this. ln discussing the pending new ideas are wanting. privatisation of Perwaja Steel Sdn Bhd to a consortium comprising Thus one Penang government leader Maju Holdings Sdn Bhd (the major­ proposed that "state-of-the arC toi­ ity shareholder), the federal and let\ be introduced in Penang. Will Tcrcngganu governments (the mi­ they be electronically run? neon-lit? nority shareholders), and perhaps, with piped-in-music') the Lion Group a<, well, the PM re­ called that his deputy, as Finance Really, all Penangite.., \\ant. so I un­ Minister, had earlier announced that derstand, are clean toilet:>. Throw in Finance Minister Anwar lire Go~·enune111 the steel group's RM2.9 billion debt would absorb PenwJja 's RM2.9 h11/o.u. clean air, clean .,eas. clean road'>, and

A/iran Ma111hl} 1997: 17(4) Page 20 what-not in our toilets (in shops. res­ all. they are the ones who promote taurants, toumts spot~. etc.) should smoking as a glan1orous pastinle for be less pamful, right? No. It seems the impressionable young.(Sec ar­ we have to carry out research into ticle on US-aided tobacco fim1S in Ijambans (toilets) all over the world: this issue). the self-flush kind. the "talking.. kind (where a VOICe warns you not to aim IAnd our TV stations which adver­ wildJy. or. sit in a tidak apa, cincai lise cigareuc brands during sports bohcai (couldn't care less. slipshod) events when millions of young Imanner. I can sec many academics people tune in. Shouldn't senior of­ doing R&D on toilets under lRPA ficials at these statiom. be caned too? (top national importance projects). Or do we onJy whack the defenceless Penang Chief Minister Dr. Kob : About 'Guest Rooms·. it seems our young \\ ho are at the mercy of the Penang L<·cuil "? hotels are not providing enough I pnncipal and the discipline teachers. J really. you would have an edge OH!r lcomfort or enough exotic appeal to some of whom. ironically. may be • the rest of the country. tourists. So. one of our ministers smokers themselves? Young pupils • came up with thecleverideaoftum- who smoke may come from broken InsteadofU1b, thesameleaderwho I ing rooms in the fonner Pudu Jail homes. broken families, etc. and proposed these futuristic loileb had (now a crowd-drawmg attraction) could have turned to smoking as a earlier proposed the promotion of into guest rooms- whatever that may fonn of escap1sm Penang as a centre of dental tour- f mean. l ism and wa~ abo responsible for Doesn't it strike you that something organising the longest beach ban- What an original idea! Other coun- IS very wrong with our system? We quet with an eye on getting 11 mto tries may offer you their wide open have 400.000 drug addicts in the the Guinness Book ofRecords. Like spaces, we offer you our narrow. shut country. Are we also going to cane 1 said. some leaders have not been in, but intensely private, spaces (pri- all of them too? thinking so hard. 1vate. that is. if you don't mind ~har- 1 • ing your cell-. wtth the likes of the This painful proposal is typical of the Really, it's not enough that our poli- notorious gang~ter ·Botak Chin' not Malaysian approach to dealing with ticians should be clean and capable. in the flesh but in spirit form!). the victim!> of social ills: lecture They should also be clear-minded. them, cane them, expel them, lock them up. You may deal with the r ~ I ~ ~ ~ ! symptoms of the problems. but the I root causes will still be there and the l I. . II j problems wtll JX!r,tsl. Dirt IS on all our ministers· minds D1d you bear about the new rules to these days from the PM downwards. cane pupils who smoke and to expel Whatever happened to all the coun­ lt seems our toilets are a disgrace to repeated otl'endcrs? It seems to me sellors in our schools'? Don't they a nation aspiring to developed na- that these rules are unfair lo the have an important role to play in lion status. young: One set of rules for the young dealing with pupils who smoke? Or and another for adults. are they only sent to the 'best' We just don't seem to know ho\\ to schools where smoking is not a real deal with "dm" - natural. organic What about caning teachers and problem. and otherwise (i.e. "dirt" in the cor­ principals who are caught smoking? ridors of power. It would be good 1f and sacking ministers and dvil ser­ As a parting shot. may we recom­ we could sweep that kind of "dirt" vants who smoke? and parents who mend that the party whips in Parlia­ under the mat but recently it over­ set a bad example by smoking? Do ment be equipped with canes too. nowed resulting m some important they all get off scot free? That way they can whack offending people being nushed out from the MPs who 'hang out' in the canteen corridor!> of power). I What about caning the real culprits to steal a puff when they should be - the directors and marketing execu­ inside the House taking part in the Now to tackle the dirt. stench and tives of cigarcllc companies? After proceedings.

A/iran Mnnt/r/1 /9Y7: 17(4) Page 21 HOUSING

sation and alternative housing? TERMINATION BENEFITS -INADEQUATE AND t INAPPROPRIATE When plantation workers lose their jobs as a result of a sale or acquisi­ I tion of an estate. they are legally on Iy entitled to receive tcnrunation ben­ efits as provided in the Employment (Termination and Lay-off Benefits) Regulations 1980.

Regulation 6 spec1fie~ a limit of 20 days wages per year of sen-icc for those who have been in continuous I employment for five years or more. Hence. a plantation \\ orker who has worked for 20 years in the e<,tatc Iwould only receive some RM6,000 when the estate is sold and his or her service is terminated.

I It appears that the initial intention of this 1980 Regulation was to protect Planunion 1.-ult, numer- the number of estates has dwindled I ous estates have been sold or ac­ I from 21 to 11, over the last four The situation of plammion workers, quired to make way for elite hous­ years. In Johor. the recent sale of however, differs great!) from that of ing projects, golf courses, indus­ some I 0 estates has meant that es- factory workers. Plantation workers trial parks and new townships. Ex­ tates have practically ceased to ex- not only work on the e., tate but live amples of such projects arc ist near Johor Baru. there as well. They li\e in houses Putrajaya and Lembah Beringin in 1 provided by the estate management, Selangor, the Nilai township in What does the law say about the and their children mo~t often study Negri Sembilan, and Diamond plantation workers· right to compcn- in a nearb) estate school. Plantation

A/iran Momhly 1997: 17(4) Page 22 wori

Estates. however, are sold under vastly different circumstances. Es­ tate employers terminate the ser­ vices of their workers not because they are facing great financial difli­ cullies but because they can make exorbitant profits. For example. Bukit Rajah estate in Sclangor cov­ eringsomc 5,385 acrcli wall recently sold by Consolidated Plantations for RM380 million.

The total amount that plantation On lwusing ••hen u11 estule is sold for det•eltJpmllnl : employers pay in termination ben­ efits when as estate is sold is minus­ • ... STATE GOVERNMENTS AND PLANTAnON cule when compared to the vast OWNERS IIUST WORK TOGETHER TO profits that they reap from the sale PROVIDE ESTATE WORKERS WITH of an estate (see Box L). REASONABLE HOUSING WHEN ESTATE LAND IS CONVERTED TO INDUSTRIAL LOTS ... • Irrespective of this vast imbalance between the employers' profits and Lim All Lek, Human Resources Minister: (The .Star. 6 June 1995)

Aliran Monthly 1997: 17(4) P(1ge 23 the termination benefits paid to workers, most estate employers make use of the minimum require­ Box2 ments of the law and refuse to budge from tills minimum payment when an estate is sold and the workers arc THI! SALE OF ESTATE terminated. AND THE RIGHT TO HOUSING

Workers in Ladang Prang Besar and On I June 1996. some 700 plantation workers from 23 es­ Ladang Gallowa> who were termi­ tates in Selangor, Perak and Pahang gathered in Kuala Lum­ nated by Golden Hope Plantations pur to participate in a forum on "Sale of Estates and the Berhad faced tills predicament when Right to Housing". their estates were acquired for the prestigious Purrajaya project. Golden Hope refused to pay any­ Papers and ca~ studies of various estates that had been sold thing more than the statutory termi­ were presented. The Forum concluded with the adoption of nation benefits of 20 days· "'ages several resolutions by the workers. These resolutio~s were per year of service. subsequently forwarded to the Prime Minister, the Deput) Prime Minister, and relevam Cahinet Ministers and gov­ Since plantation workers' lose more ernment departments. thana job \\hen an estate is sold and since plantation employers reap tre­ It is the hope of the workers that these persons and depart­ mendous profits as a result or the ments will undertake a studyufthe problems faced l;ly plan­ sale of an estate, the minimum statu­ tation workers when estates are sold for development and tory protection afforded plantation initiate and fonnulate the necessary legislation requued to workers by the 1980 Regulations LS adequately protect plantation workers. thus both inadequate and inappro­ priate! 1. Estate Workers' House Ownership Scheme THE QUESTION Preamble: The Estate Workers' House 0\\ nership OF HOUSING Scheme initiated in 1973 has had limited success. These 23 years, the scheme has Frequent statements by politicians been introduce-d in a mere 33 estates na­ assuring estate workers of alterna­ tionwide. The prim31) cau.~ of the failure tive housing, when an estate is sold of this scheme is the uncooperative atti­ or acquired, are very misleading. tude of estate employers. Despite the fact that the sale of an estate will result in plantation work­ Resolution: The concept of the Estate Workers' House ers loosing their homes- mere IS no legal requirement for estate em­ Ownership Scheme should be made into a ployers to provide their workers law. Such a law would make it a legal re­ with alternative housing or land. quirement for all estate employers to in­ troduce a house ownership scheme for The vast majority of plantation their workers. workers do not own the houses in which they live. The reason for thi'> 2. A One-Stop Agency lS me failure of the Estate Workers Preamble: As workers we recognize the fat;t that ex­ House Ownership Scheme intro­ isting bureaucratic procedures at the state duced by the late Tun Abdul Ra7ak level may act as a hindrance to estate em­ in 1973. ployers who intend to initiate a house own­ ership scheme for their workers. Under mis scheme, estate employ-

Abron Month/) 1997: 17NJ Pag~ 24 ~posed to construct and sell I ~~~;u~~ their workers. rr the scheme was introduced in a partiCu­ lar estate, it would mean that the plantation workers in tba estate Resolution: Individual state governments should stream­ would be working and living in a line existing bureaucratic procedures, that act house that they would ullimf!tely a.'i a hindrance to estate employers intending own. Housing would then not be an to initiate a house ownership scheme for their issue if the estate was sold. workers, by e.'itabHshing a one-stop agency at It is sad to note that, to date, the the state level to expedite the entire process. scheme has on1y been introduced in some 33 estates. Of these 33 3. When An Estate Is Sold schemes. a total of 17 have been For The Purpose Of Developmeat completed, while a further 16 arc Preamble: When an estate is sold for development and being constructed. the workers terminated, there is no law requireing an estate employer to provide these Politicians and minister~ have ac­ workers with alternative housing. knowledged the failure of rh1s scheme, and in the process laid the Resolution: Legislation to protect estate workers in such blame on the uncooperative attin1de a ~ituation is urgently required. When an es­ of estate employers. tate is sold for development, the estate em­ ployer should be legally required to either We however expect politicians to do alienate a portion of the e.c;tate land to the state more than lament the .. uncoopera­ govemmeot in order that the state government tive" and ·unresponsive" attitude of be able to construct houses for the displaced plantation employers. Plantation workers or the estate employer should employers will continue to display sprovide free lots to the affected workers. such an attitude unless legally com­ pelled to do something. Tf the State 4. Compensadon When Workers Are Terminated is genuninely interested in this Preamble: When an estate is sold and workers tcnninated, scheme and the problem of housmg, are then estate employers should be le­ such workers only entitled to tennination gally compelled to implement the benefits under the Employment (Termination Scheme. and Lay-OffBeneftis) Regulations 1980. Such benefits amount to at the most 20 days wages THE SELAJIQOR STATE pa- year of service. This benefit is most inap­ EXCO POLICY ON propriate in light of the fact that while estate ESTATE HOUSING employers reap vast profits as a result of such Although there is no legal require­ sales. the workers lose their jobs, their houses, ment for estate employers to imple­ face displacement and numerous other prob­ ment the Workers' House Owner­ lems. ship Scheme or to provide their workers with alternattve housing Resollnion: The Employment (Termination and Lay-Off when estates are sold. there exists Benefits) Regulations 1980 must be amended in Sclangor some policy statements in order to make provision for better tennina­ on housing. tion benefits to be paid to plantation workers when an estate is being sold for development. Sclangor is the only state that has formulated such a policy on estate housing. Kedah, Negri Sembilan,

A/iran Monthly 1997: 17(-1) Page 25 to build houses for workers. if es­ Many plantation companies have tate managements failed to imple­ also diversified into property devel­ ment the Workers· House Owner­ opment - for example. Golden ship Scheme. Yet, desptte the fact Hope and it~ subsidiary. Ncgara )that only II OUI of Lhe 180 e!ool.ales in Propenics. Selangor have implemented the Scheme. the Sclangor State Govern­ Plantation worker.... on the other ment has yet to acquire land in even hand. are faced with numcrou.' prob­ a single estate to implement the lems: they have to find nc.... jobs, Scheme. acquire new skills. find a place to live. earn more money to meet addi­ As for alternative housing when an tional expenses. enrol their children estate is sold, there are several es­ in new schools. and cope with Lhe tates in Selangor in which workers fears and insecurities of being di­ Muhammad Taib: Powfr to build ho11.1t:s have nor been offered any alterna­ for ~··orkers? vorced from a self-contained com­ tive housing. For example. when munity. Malacca andJohor where many es­ LadangBan Chin Hin nearTanjong tates are bieng sold. have yet to for­ Malim was acqtJired by Lhe Selangor To remedy this imbalance. it is only mulate any policy of thts nature. State government on 24 October logical that more ellective legislation 1995, 44 worker\ were terminated. be devised to protect planrauon The Selangor State Exco Policy on These workers were not offered al­ workers when an estate is sold or ac­ Estate Housing wm. fonnulutcd in ternative housing and today reside quired. August 1991 and consists of two in various kampung\ in the Tanjong parts. Malim area. Plantation workers should not be treated as bouncing balls between the A CARING SOCIETY? The first states that all e!>tatc em­ vendor and the purchaser. between ployers must implement the Work­ Rapid devclopmcm i\ fa!>! altering staLe and federal c.Jeparunems. with ers· House Ownership Scheme for our way of life. For '><>me it creates all these parties trying to evade their thir workers. failtng which. the new and wonderful opportunities for respon~ibtlihes and obligaliom.. Selangor State Government will ac­ making money. while for others it Plantation worke~ ha\'e worked in quire the estate land and build leads to additional tinancial burdens estates for three gener.uion.... and have houses forthe workers. The second and an uncertain future. contributed much to the ''ealth of states that when an estate is sold for this nation; they deserve to be treated development. !he estate owrcr mu~t Estate employer~ have always been justly. [.J provide his workers with alternative blessed with profits from the sale of housing or land. agricultural crops. The present great demand for land ha~ rc~ultcd in the This Policy on Estate Housing. how­ sale or acquisition of estates at enor­ ever, is not law. There ts no leqal mous profits. In addition. estate em­ requirement compelling estate em­ ployers very often have a percent­ ployers to implement this policy. age of equity holdings in the project Consequently, plantation workers that is to be developed on the estate are not assured of a legal right to land, thus securing continued prof­ housing. and the implementation of its. the policy leaves a lotto be desired. Having reaped the benefits of cheap For example. the former Selangor land and labur for many years, plan­ Mentri Besar Muhammad tation companies are now selling Muhammad Taib stated that be bad estates in West Malaysia and pur­ the power-and that he would not chasing plantation land in East Ma­ 1'/anratitm ll'orkl.'r.\ han• cantribured muC'Ir hesitate to use it- to acquire land laysia and Indonesia at low prices. to the ll'eulth of tlus muion.

Alirw1 Monthly 1997: 17(4) Page 26 r ------~ --- --, HEALTH

US-AIDED TOBACCO FIRMS .----- IN ASIA CONQUEST 1,-:;..=.:::.- ' The most shameful thing this country did was to export disease, disability and death by selling cigarettes to the world.

its campaign for new overseas markets alone. The Reagan and GLENN .FRANKEL reports on how America'slewtiug Bu!.h administrations used their cigarette companies used trade laws to prise open a lo­ economic and political clout to aative new market pry open markets in Japan. South Korea, Taiwan, Thailand and China for American cigarettes. n the streets of Manila. gest tobacco companies are com­ ''jump boys" as young peting for the right to launch co­ To this day, many US officials as 10 bop in and out of operative projects with the state­ see cigarette exports as strictly an traffic selling Malboros and run tobacco monopoly in hopes issue of free trade and economic Lucky Strikes to passing motor­ of capturing a share of the big­ fairness, while tobacco industry ists. gest potential market in the critics and public health advo­ world. cates consider ita moral question. Tn the discos and coffee shops of Seoul, young Koreans light up Throughout the bustling cities of Even the Clinton admmistration foreign brands that a decade ago a newly prosperous Asia and the finds itself torn: ll is the most were illegal to possess. ruined economies of the former vocally anti-smoking adminis­ Soviet Bloc, the American ciga­ tration in US history, yet it has Downtown Kiev has become the rette is king. At home, cigarette been in the uncomfortable role Ukranian version of Marlboro consumption has undergone a of challenging or delaying some Country. with the gray socialist I 5-year decline. Thanks to for­ anti-smoking efforts overseas. cityscape punctuated with eign sales, however. the compa­ colourful billboards of cowboy nies arc making larger profits At the same time. fledgling anti­ sunset'i and chiseled faces. than ever before. smoking movements are rising up with support from American ac- 1 And in Beijing, America's big- _ B_u_t~ tb_e _i_nd_u_s_try_d_i_d_n_o_t_l_au_n_c_h__ ti_v'_· s_ ts_. _pa_s_s_in_g_~"'_e._st-ri-ct-io_ns_th~

Allran MonJhly 1997: 17(4) Page 27 suggested another motive when he told a North Carolina farming audience in 1990 that the govern­ ment was seeking to help the to­ bacco industry compensate for shrinking markets at home. "We ought to think about the exports." he said. "We ought to think about opening up markets, breaking down the barriers.··

A handful of American health of­ ficials vigorously oppO!o>ed the government's campaign. but were stymied or ignored. "f feel Souru : ThL' Washington Pmt the most shameful thing this some cases are tougher than spins itself out." George Grif­ country did was to export disease, those in the United States. fin, commercial counselor at disability and death by selling our the US Embassy in Seoul, told cigareltes to the world.'' said Tnternational epidemiologist the public affairs manager of former surgeon general C Everett Richard Peto of Oxford Uni­ Philip Morris Asia in January Koop. "What the companies did versity estimates that smoking 1986. "1 want to emphasize that was shocking, but even more ap­ is responsible for 3 million the embassy and the various palling was the fact that our own deaths per year worldwide: he government agencies in Wash­ government helped make it pos­ projects that 30 years from now ington will keep the interests of sible." the number will have reached Philip Morris and the other 10 million, most of them in de­ American cigarette manufac­ Clayton Yeuucr, high-octane Ne­ veloping nations. In China turers in the forefront of our braska Republican with serious alone, Peto says 50 million daily concerns.'' political aspirations, came to the people who are currently 18 or Office of the US Trade Represen­ younger eventually will die US officials not only insisted that tative (USTR) in 1985 with a from smoking-related di~eases. Asian countries allow American mission: to put a dent in the companies to sell cigarettes. but record US trade deficit by forc­ ASIA- NEW HORIZON FOR TOBACCO INDUSTRY also demanded that the compa­ ing foreign countries to lower nies be allowed to advertise. hold their barriers against American Asia is where tobacco's search give-away promotions and spon­ products. for new horizons began and sor concerts and sports events. where the industry came to rely They regularly consulted with He took office when Washington most on Washington's help. US company representatives andre­ was on the verge of declaring a officials in effect became the lied on the industry's arguments trade war against some of its industry's lawyers. agents and and research. And they ignored staunchest allies in the Far East. collaborators. Prominent politi­ the protests of public health offi­ Asian tigers such as Japan, South cians such as Robert Dole, Jesse cials in the United Slates and Korea, Taiwan and Thailand Helms, Dan Quayle and AI Gore Asia. This was. they insisted, were running up huge trade sur­ played a role. solely an issue of free trade. pluses with the United States on goods ranging from T -shirts to "No matter how this process But then Vice-President Quayle computer chips Lo luxury sedans.

A/iran Mo11111/y 1997: 17(4) Page 18 The US annual trade deticit in ment on Tariffs and Trade sports gear. 1984 totaled a record $123 bil­ (GATT), and Taipei hoped to lion. violate free-trade principles. The companies produced stud­ ies showing that aside from Yeutter knew that USTR bad a When Ycutter and his staff heavy aviation parts, cigarettes powerful weapon on its arse­ looked at the cigarette business were America's most success­ nal. Section 301 of the 197 4 in these countries, they saw hy­ ful manufactured export in Trade Act empowered USTR pocrisy. Each Asian govern­ terms of the net balance of to launch a fu11-scale investi­ ment sought to justify its ban trade. They estimated that ciga­ gation of unfair trading prac­ on imported cigarettes in the rette exports - largely to West­ tices and required that Wash­ name of public health, yet each ern Europe and Latin America ington invoke retaliatory sanc­ had its own protected, state­ -accounted for 250,000 full­ tions within a year if a targeted controlled tobacco monopoly time jobs in the United States government did not agree to that manufactured and sold and contributed more than $4 change its ways. Yeutter per­ cigarettes. billion to lhe positive side of the suaded the admini!)tration to al­ trade ledger. low him to use Section 301 ag­ But the very flaw of the state­ gressively. run monopolies were exactly ln a January 1984 letter to an what a doctor might have or­ official in the Commerce De­ The US tobacco industry had dered: Their high price and partment, Robert Bockman, been trying for years to get a poor quality had helped limit then director of corporate af­ foothold in these promising smoking mostly to older men fairs for Philip Morris Asia, de­ new Asian markets. In 1981 the who had the money and taste scribed trade barriers against big three- Philip Morris Inc. for harsh, tar-heavy local his company's products in RJ Reynolds Tobacco Co. and brands. The monopolies sel­ South Korea. He then went on Brown & Williamson - had dom, if ever, advertised and did to discuss what he called "the formed a trade group called the not target the great untapped politics of tobacco in this elec­ US Cigarette Export Associa­ markets of women and young tion year. Attached please find tion to pursue industry-wide people. Per capita -;ales re­ a listing of the 1980 election policy on the issue. But the mained low in every country results in the major tobacco - companies had felt frustrated except Japan. growing areas in the United during the first term of the STRATI!QIU OF States. You will note that the Reagan administration. TOBACCO COMPANIES margin of victory for the presi­ dent [Ronald Reagan] was nar­ Japan. the West's second larg­ Gregory Connolly, an anti­ row in some key areas." est market for cigarettes, re­ smoking activist who heads the mained virtually closed to Massachusetts Tobacco Con- Jesse Helms, R-North Carolina, American brands because of trol Program has travelled who at the time chaired the Sen­ high tariffs and discriminatory widely through Asia anddocu- ate Agriculture Committee, distribution. South Korean law mented how American compa- also intervened. In July 1986 effectively made it a crime to nics skirted advertising restric- Helms wrote to Japanese Prime buy or sen a pack of foreign tions by sponsoring televised Minister Yasuhiro Nakasone cigarettes. And Taiwan and rock concerts and sporting congratulating him on his re­ Thailand remained tightly shut. events, placing cigarette brands cent election victory and point­ in movies and lending their ingoutlhatAmericancigarettes All except Taiwan were signa­ brand names to non-tobacco accounted for less than 2 per tories to the General Agree- products such as clothing and cent of the Japanese market.

AlircUI Mrmtll{v /997: /7(4) Page 29 "Your friends in Congress will mestic tobacco market. The US US officials threatened to op­ have a beter chance to stem the tobacco industry filed a 301 com­ pose Taiwan's application for tide of anti-Japanese trade senti­ plaint against Seoul in January membership to GATT. Six ment if and when they can cite 1988. USTR initiated an investi­ weeks after Reagan's order, tangible examples of your doors gation a month later. Taiwan folded. being opened to American prod­ ucL<;," Helms wrote. ·1 urge that South Korea's slate cigarette mo­ Following the agreemcnL con­ you make a commitment to es­ nopoly had done little advertis­ sumption of imported cigarettes tablish a timetable for allowing ing over the years, and a few in Taiwan soared. According to US cigarelles a specific share of months before the 301 case, the one industry trade journal. for­ your market. May I suggest a Seoul government had formally eign brands went from 1 per cent goal of 20 per cent within the outlawed cigarette ads. But the of annual cigarette sales to more next 18 months." United States insisted on defin­ than 20 per cent in less than two ing "fair access'' as including the years. while state manufactured At Yeutter's urging, Reagan de­ right to advertise. brands declined accordingly. cided not to wait for a formal fil­ OPENING ing from the industry against Ja­ ASIAN MARKETS RJR spm1sored a dance at a pan. The White House filed three Taipei disco popular with teen­ 301 complaints with USTR in In May 1988 Seoul formally agers and offered free admission September 1985, one of them agreed to open its doors to for five empty pack.'i ofWinstons. against Japanese restrictions on American brands. The deil. al­ Studies by Taiwane::.e public the sale of US cigarettes. Other lowed cigarette signs and promo­ health specialist Ted Chen. now US bureaucrats began drawing tions at shops. 120 pages of ad­ a professor at Tulane University up lists of products for possible vertisements in magazines and Medical Center. tracked a retaliation. cigarette company sponsorship steadily rising rate of smoking of social, cultural and sporting among high scboolers. ln subsequent trade ralks, Japa­ events. nese negotiators hung tough The 30 I cases were a boon to the through 14 sessions. Finally, a Cigarette quickly became one industry. The Boston-ba'-ed Na­ year after Lhe 301 complaint was of the most heavily advertised tional Bureau of Economic Re­ filed, the Japanese capitulated, products in South Korea; from search estimated that sales of signing an agreement allowing in no advertising in 1986. Ameri­ American cigarettes were 600 per American-made dgarcttes. can tobacco companies spent cent higher in the targeted coun­ $25 million in 1988. Within a tries in 1991 than the) would Cigarettes became the second year, American companies had have been without US interven­ most-advertised product on tele­ captured 6 per cent of Lhe mar­ tion. visions in Tokyo-up from 40th ket just a year earlier. Today. im­ In 1990, after he became secre­ ported brands control 21 per cent On the heels of the Japanese tary of agriculture. Yeutter said of the Japanese market and earn agreement. Taiwan had agreed at a news conference: "I just saw more than $7 billion in annual in October 1985 to liberalize the figures on tobacco exports sales. Female smoking is at an barriers to wine. beer and ciga­ here a few days ago and. my, have all-time high, according to Japan rettes. But a year passed and the they turned out to be a marvel­ Tobacco's surveys. market remained effectively ous success story." 0 closed. Reagan then ordered The next target was South Ko­ Yeutter to propose "propor­ Source: Guardian Weekly, rea, which had a $1.7 billion do- tional countermeasures," wb.ile 1 December 1996.

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Aliran Montlzly 1997: 17(4} Paw! 32 IINDEPENDENT BUT STILL IN BONDAGE Continued from page 40

These words were wrillcn in 1925, reach a fullllowering. Self-govern­ choose to gratify narrow, selfish in­ yet could well be applied to the state ment is only meaningful if il gives terests or to expand our hearts and of present day Burma, although it the people greater confidence in their minds to encompass the needs and might be questioned whether 'pu­ own worth. Self-government that re­ aspirations of others. pilage' is not too tender a word to sults in a crushed, intimidated people describe the abject situation in who have no control over their own We are about to embark on a cen­ which my country finds itself today destiny constitutes a betrayal of the tury which will surely bring devel­ under a military administration that struggle for independence. a struggle opments that will change our world leaves the people with no role to during which so much was sacrificed radically. The 21st century could of­ play in their own government. We by so many. fer exceptional opportunities for cre­ remain a nation in bondage after 49 ating an environment that provides years of independence. n is often the privilege as well a_o.; the greater security and happiness for all duty of succeeding generations to peoples. n could be an era when REAL FREEDOM realize the dreams of those who sac­ gross materialism is let loose to There can be no real freedom un­ rificed their well-being and their trample on the forces of justice and less the mind and spirit are free. lt lives for the freedom of t11eir coun­ compassion. TL is for us to choose is the dury of responsible leaders to try. It could be said that· the youfu of which path to follow. nurture conditions under which the today have a more difficult task than minds and spirits of the people-can those who conducted the fight Once again, to quote Gandhi on the against colonialism. best kind of self-government 'Real When a struggle is di­ swaraj (freedom) will come not by rected against an alien the acquisition of authority by a few people, the issues are but by the acquisition of the capac­ clear-cut. When the ity by all to resist authority when it struggle is directed against is abused. In other words. swaraj is negative elements within to be allained by educating the our own society, doubts masses to a sense of their capacity and confusion creep in. to regulate and control aufuority.'

Therefore young people Education is therefore the key to cre­ working for a beuer world ating a nation worthy of the heirs of need constantly to assess men and women who dedicated and reassess ilie values of themselves to the cause ofjustice and tlJeir own society, as well freedom with the unstained passion as their own motives. It is of children and the fierce determi­ through a continuous re­ nation of spiriLUal giants. assessment mat we learn how to protect our free­ By education I do not mean just for­ dom and bow to make fue mal schooling but the cultivation of best use of it. the mental strength and courage to cope with both the known and the Freedom means choice. unknown. lt is through an abiliry to Young people of today evaluate the past correctly and to face have a far wider range of the present braveI y that we can build choice than those who a future fit not just for ourselves but Having tricked the people ifllo closing their eyes. lived half a century ago. for generations to come. llwse in p()wer deprive 1hem ofwhrrt should £t is of the utmost impor­ rightfully be theirs. ENDURING VALUES tance to make the right Source : Index on Censorship : July I August 1994 choice. We can either There are enduring vallles that tran-

Alirlllt Monthly 1997: 17(4 ) Page 33 scend national borders and centuries. buiild better lives not just for them­ There are also values that have to be selves or their own people but for all discovered for our own limes. The humanity. The future belongs to the process of discovering is a challenge young and it is wonderful that it to young people who wish to mould should be so. How fortunate to be the world into a pattern that reflects on the threshold of life when the the morning freshness of their lives. world ls on the threshold of a new They have a unique opportunity to century.Q leave their impress on their society. I would like to urge them to seize This orlide is based emu mes· Lhis opportunity with gratitude and suge sent by BurmRse demo· enthusiasm; missed opportunities crllfic campaigner Almg San could set back individuals and na­ Suu Kyi to an MRA COI({erence tions by decades. in India marking 50 year.\ of India's indt>pendence. As young people look forward to the new century with receptive minds FOR A CHANGE: Vol 10 and open hearts they can strive to No. 2, April/May 1997

On~ that gm lltrough. Publlshtd ilt 1991). wht!n SWRC were refusinf( ro luuul Q~"J!r ptw.•er. TilL lllltbrt!Uo iJ t#IP symbol af TO)W power.

'Ati.~hoo', 'Coughs'. 'Hen .vou Qrf!. YoJU lllltbrliJa. ·

Sourt·e : Index on Censorship : JMJy I August 1994

A/iran Monthly !997: 17(4) Page 34 HUMAN RIGHTS

THE MYTHS OF 'CONSTRUCTIVE ENGAGEMENT'

Why Burma's military dictators should not be admitted to ASEAN

hat T am here to repre­ sent a network of over ASEAN governments are poised to admit Bunna into g 200 ASEAN-based the regional grouping even as the country's military dic­ organisations and individuals in­ tators refuse to recognise the legitimately el~ted gov­ dicates the growing concern and, ernment there. DEBBIE STOTHARD asserts that indeed, outrage at our govern­ ASEAN's unrondltlonal support for Bunna's illegitimate ments' apparent acceptance of regime - under the guise of ~constnJctive engagement' - Burma's worsening human rights will hurt not only the people of Bunna but the region as situation. a whole. For many years now. a significant number of citizens from this re­ gion have opposed the policy adopted by member governments of the Association of South-East Asian Nations (ASEAN). This policy, known as 'constructive engagement', has been opposed because it has proven to be the exact opposite of its title.

Under the guise of 'constructive engagement', ASEAN and its member states have established their position a..~ one of the few public aBies ofBurma's military regime, the State Law and Order Constructive engagement? : Indonesia's Suharto with Burma's dictator. Gen. Tm1 Slnve (centre) Restoration Council (SLORC).

Aliran Monrhly 1997: 17(4) !'age 35 The rapid increase of business The opening up of Burma's ASEAN member states were ventures involving organisations economy has not improved the truly concerned with 'opening with Jinks to ASEAN govern­ well-being of the majority of its up' the country, they would be ments would imply that our lead­ citizens. Hunger and deprivation building hospitals and schools in­ ers seem to have mistaken 'con­ continue to exist on a large scale. stead of hotels and shopping structi vc · for 'construction'. malls. They would not be in­ Perhaps we should be more hon­ Amnesty International reported volved in projects which result in est and acknowledge that 'con­ that 1996 was the worst year on forced relocation and the use of structive engagement' does not record for human rights abuses slave labour. exist; 'business engagement' in Burma. Detentions, arrests, docs. and violence by SLORC have es­ MYTH I 2: THOSE OBSTRUCTING calated. SLORC seems to have THE ENTRY OF BURMA Jn July, Burma's military regime been encouraged by its closer re­ ARE FOREIGN NATIONS gained observer status with lationship with ASEAN to in­ NOTINASEAN ASEAN and was assured that crease itc; oppression against the SLORC membership in A SEAN people of Burma. Absolutely not. The Alternative would be imminent. This, and ASEAN Declaration on Burma, other developments indicate that SLORC continues to divert most which wa<> finalised in October the only party dictating the con­ of the country's earnings to the bas been endorsed by 227 ditions of 'engagement' is military and to other structures organisations and indh iduals SLORC. that help the military survive. As from existing ASEAN member a result, even the most basic states, including 16 Members of 'Constructive engagement' has needs of civilians are not being Parliament and several former helped worsen the crisis in met. The healthcare system or the Members of Parliament. Burma and, from the behaviour lack of a public heallhcare sys­ of some governments in this re­ tem has allowed Lhe H1 VI AIDS The Alternative ASEAN Decla­ gion, has caused a 'SLORC­ epidemic to continue unabated. ration on Burma opposes isation' of ASEAN. Thus, the Literacy rates have plummeted as ASEAN membership for SLORC claims and pronouncements increasing numbers of children because: made by the proponents of 'con­ are deprived of access to educa­ structive engagement' are sound­ tion. • SLORC is not the legitimate ing increasingly hollow: government of that country; SLORC continues its attacks - • ASEAN membership would MYTH f 1: military and otherwise - on sup­ provide the SLORC with a de 'CONSTRUCTIVE porters of democracy and ethnic facto license to continue its at­ ENGAGEMENT' nationality groups. The current tacks on the people of Burma: HAS WORKED TO offensive against the Karen and ONN UP THE COUNTRY people is one of Lhe worst in re­ • SLORC's activities directly 'Constructive engagement' bas cent years, and the objective contradict the aims and objec­ only helped SLORC to indis­ seems to be to wipe out the Karen tives of ASEAN. criminately exploit Lhe country's people, not just the Karen Na­ resources in the same way it ha<> tional Union. The Alternative ASEAN Decla­ attacked the people of Burma. It ration on Burma also calls upon ha<; helped in the creation of jobs ASEAN cannot claim ignorance ASEAN member governments that pay wages in the way of dis­ of this ongoing crises; yet, it has and the international community placement, misery, death, and persisted in giving tacit endorse­ to discard 'constructive engage­ fear. ment to SLORC all this while. If ment', which has brought untold

A/iran Month/\• 1997: 17(4} Page 36 injustice and suffering upon the matter. of 'divide and rule'. people of Bunna. MYTH 14: The attacks on ethnic nationality IT IS IN THE INTERESTS It is extremely ironic that groups, including the current of­ OF REGIONAL SECURITY ASEAN activists are being fensive against the Karen people, lumped in with 'western govern­ lt would appear that the threat ·are not being perpetuated by the ments' onlheissue ofSLORC's to regional security and stabil­ NLD. It is SLORC that is com­ membership of ASEAN. It is a ity is SLORC itself. It has per­ mitting murder, rape, looting, ab­ poor reflection on ASEAN mem­ sisted in violating tbe borders duction and torture against eth­ ber states that they have failed of its neighbours and. on sev­ nic groups. lt is SLORC that is to take the initiative on Burma eral documented instances, denying ethnic people their civil, and instead resort to irrational crossed borders to pursue and political. economic. social, and and sometimes contradictory auack the security forces of cultural rights. statements to justify their lack of another country. The SLORC vision. military bas committed murder, The hope for harmony lies in a abduction, robbery, assault and government committed to justice. MYTH f 3: property damage in neigh­ human rights, and democracy. IT IS AN bouring countries. It has shown This is why ethnic groups are in­ INTERNAL AFFAIR a blatant disregard for their creasingly making known their The usual line trundled out when sovereignty and security. supportfor the democracy move­ all else fails. Sometimes used in ment led by Aung San Suu Kyi. tandem with ''it is up to the The unabated HIVI A IDS epi­ The Mae Tha Raw Hta State­ people to decide their fate.'' This demic in Burma, helped by ment, made by ethnic nationality is a pronounceme!Jl verging on SLORC's irresponsibility in not leaders at a conference in Janu­ the obscene. when it is obvious providing adequate public ary, calls for lripartile dialogue that the people of Burma DID healtbcare services (awareness, and expresses support for the de­ decide their fate in May 1990. prevention and care program­ mocracy movement led by Aung mes), and SLORC' s apparenl in­ SanSuu Kyi. Despite pressure and obstruc­ volvement in the production of tions by SLORC, they voted drugs poses a long-term security The 'stabil ity' molded by overwhelming!y for the National threat to this region. The human SLORC's military force and co­ League for Democracy (NLD), and economic cost to Burma and ercion is one that will continual Iy led by under Aung San Suu Kyi, the rest of the region should be a result in armed conllicts, deaths who was under house arrest at cause for great concern to us all. and refugees. The growing co­ the time. The NLD won 82 per operation between Suu Kyi and MYTH f 5: cent of the seats and more sig­ ethnic nationality leaders offers IF NOT FOR SLORC, nificantly, over 90 per cent of the BURMA WOULD the only peaceful alternative to vote - a fantasy for most politi­ COLLAPSE INTO this situation. ci

A/iran Momhly 1997: 17(4) Page 37 or the conflict in Mindanao. The MYTH f 8: MYTH f 9: ASEAN charter does refer to the BURMA IS .A SANCTIONS HURT well-being of the people of the 'WESTERN' AGENDA THE WRONG PEOPLE region, as well as the matter of This was recently stated by Ma­ regional stability. This implies that Asians or 'East­ laysian Prime Minister Dr erners' somehow endorse mur­ Mahathir Mohamad. He asserted ASEAN does involve it~elf in der, assassination. rape, child that sanctions did not work and matters 'political' because it abuse, slave labour, violence and hurt the wrong people. realises that trade and inve~tment war. is dependent on political stabil­ Why then did Malaysia, under Dr ity. What it needs to recognise is I do not view the so-called West­ Mahathir's leadership, stand so that political stability is based on em approach as being entirely strong on sanctions against the justice and respect for human altruistic. Frivolous and insulting apartheid regime in South Af­ rights. Political stability is not a statements, however, such as rica? Why didn't Malaysia 'con­ matter of forceful containment of those made by the Singapore For­ structively engage' with israel to dissent. eign Minister about the 'Asian support Palestinian self-determi­ way', do nothing to improve the nation? IIYTH 17: situation. The Foreign Minister SLORC WILL BE MYTH I 10: concerned said at the ASEAN­ POSITIVELY INFLUENCED 'CONSTRUCTIVE THROUGH ITS EXPOSURE EU Meeting in Singapore that I!NGAGEMENT' IS TO ASEAN STATES ASEAN would not require THE ONLY ALTERNATIVE SLORC to meet certain condi­ TO ISOLAnONISM The growing links between tions before gaining member­ SLORC and ASEAN have only ship. It has been i. n the interests of brought about a SLORC-isation ASEAN member states to push of ASEAN. The strategies and He said that no ~uch negotiations the line of 'either/or'. Many ac­ rhetoric used in recent times by were needed - according to the tivists do not oppose 'construc­ some member states of ASEAN 'Asian way', the bride is ex­ tive engagement', if only it was to suppress open dialogue in pected to adjust to the groom af­ just that. Engaging and, in this their own countries seem to echo ter marriage. This statement is case, complicity with the perpe­ tho~e used by SLORC- rhetoric both offensive to Asian women trator of widespread violations such as 'destructive clements', and misleading - it is doubtful and brutality. is far from con­ 'puppets of Western ma~ters', that SLORC sees itself as the ste­ structive. Neither is isolating the and 'communist threat'. reotypical 'blushing bride'. legitimately elected government of a country. There have also been instances One of the characteri sties of the where government-organised so-called 'Asian' way is the The term 'constructive engage­ groups have been used to com­ emphasis on dialogue and ne­ ment' has to be discarded because mit violence in the style of the gotiation. This is precisely it has been so abused and per­ Union Solidarity and Develop­ what Burma's democracy verted from its original intent. ment Association. ln addition, movement and the ethnic na­ ASEAN needs to have the cour­ government responses to the rjonality groups are calling for, age to replace it with a policy that consequences of SLORC ag­ and this is what the Alternative will contribute to positive change gression in their countries ASEAN Network on Burma in Burma. seem to imply an active co-op­ supports. Why then, is ASEAN eration to stamp out political being an obstacle to this ur­ ASEAN has, so far, failed to use diversity. gently needed process? its influence gained through en-

Aliran Momhly 1997: 17(4) Page 38 gaging with SLORC to effect any significant advances for the 1

people of Burma. It has instead 1 gained international and domes- I tic embarrassment for its mem­ ber states. One would conclude, from the rampant abuses by SLORC in the past year that even that regime views 'constructive engagement' with contempt.

I The first step in this process is to facilitate tripartite dialogue be­ tween SLORC. the democracy forces led by Suu Kyi. and the ethnic groups. ASEAN should be taking the lead in strongly en­ couraging SLORC to agree to this process.

The National Convention is an inadequate arena for such a dia­ logue, particularly since the key non~SLORC players have been manoeuvred out of the process. IfASEAN fails to take this up, it is conceding international lead­ ership on this issue to its North­ em (or Western) counterparts.

It is up tO A SEAN's leadership Business as usual : Mahalhir with Burma's military dicuuor, Tan Shwe to realise that unconditional sup­ port for SLORC, motivated by investment interests, will not hurt just the people of Burma - the long-term costs will hurt us and our governments. 0

Aliran Monthly 1997: 17(4) Page 39 REFLECTIONS

Self-government that results in a crushed intimidated people ... constitutes a betrayal ofthe struggle for. independence

necessarily entail good gov­ ernment.

Good government is not sim­ ply the result of a political sys­ tem. lt is indissolubly linked to the values that prevail within a society. Unless a na­ tion can be reconstructed to en­ hance human values, indepen­ dence will not mean a more fulfilling existence for its citi­ zens. In Burma, despite half a century of self-government, good government is still some­ where in the nebulous future. ountries which without which a nation cannot achieved indepen­ take its rightful place in a free As Gandhi wrote, 'In truth the dence after World progressive world. Many government that is ideal gov­ War II are approaching the countries have achieved self- erns the least. It is not govern­ 50th year of their nationhood government only to find that ment that leaves nothing for as the 20th century draws to a the rights and freedoms of the people to do. That is pu­ close. their people have come under pilage, our present stage.' greater restraint than in the It is time to consider how far days when they were mled by Continued we have come along the road an al ien power. It is a sad truth to genuine good government that self-government does not on page..•