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Sat, 21 Jun 2008


TheSUN, WEB EDITION :: Local News

Counting the costs

IN an interview to mark his 100th day at Selangor’s helm, corporate figure turned politician Tan Sri Khalid Ibrahim outlines efforts undertaken by the state government moving towards a new era of governance. LLEW-ANN PHANG has the story.
LLEW-ANN PHANG

IN HIS opening statement, Khalid touched on the management of land, a limited resource over which the state has absolute power, and explained why certain promises made during the general election campaign have yet to be fulfilled.

"I have agreed to set up a Land Taskforce which comprises and is chaired by (Federal Territory Gerakan chief and former deputy land and cooperative development minister Datuk) Dr Tan Kee Kwong and (former Land and Cooperative Development Ministry secretary-general Prof Datuk) Dr Nik Mohd Zain (Nik Yusof).

"We will from time to time monitor the work being done because Selangor is developing rapidly and there is land development which results in land ownership transfers and land transactions that are huge in numbers. Therefore, a smooth land administration is important.

"In the election, we made a few statements on welfare efforts that will be carried out by the state. We have promised the deliverables.

"What is clear is that while we have ideas and wants, the implementation process is important. Therefore, sometimes we cannot say we can give this when we don’t know what the process is like, like where the revenue will come from.

"It takes time and it isn’t easy for me to say today I will give out scholarships to everyone. We want to know where the money is coming from and how we will manage it. All this is part and parcel of the state’s administration. So if we are on the outside, it is okay but we must know till the end, who gets it and what the cost of delivery to them is.

"Sometimes we carry out a project but the cost is more than 20%-30%, which means out of the RM10 used to help the poor, at least RM3-RM4 is lost in administrative costs. This is the rough picture of the 100 days’ efforts and I think it’s quite a task (laughs)."

What major policies and reforms have you initiated to date?

We are moving into a very conceptual issue. First, the most important conceptual issue when we came in (was) that people didn’t see the subtle difference. We say that by electing us, the rakyat has a right over the state’s resources. That is the conceptual issue, but for the Barisan Nasional, BN says the new state government by winning the election, is now in charge of the state. See, that’s the difference – the government is in charge of the state.

But Pakatan Rakyat (PR)’s concept is that the people now have the power over the state. Okay, why is this difference important? Because (in tackling) every policy issue in the future, we will have to discuss it from the PR view, how this action benefits the rakyat.

Of course, the BN point of view is that when we are the government, we own the government, and we will now give to the rakyat. That means, they think they will have to decide for the rakyat, but we say, we will think of how the rakyat wants (things). For example, when you become the government, and then say you donate to the rakyat, you say the rakyat must bersyukur untuk pemberian tersebut (the people must be thankful for what is given). That means you become the boss and you give. But PR cannot say that. We will have to say that I’m giving back to you. That means you are the owner, I’m just the manager. Then being a government, you are more than a manager – you are a shareholder – but PR says when you select us, we are only your managers. We are just the trustees of the rakyat. That means the people entrust the resources to us to manage on their behalf. That’s the difference.

The issue of free water highlights the difference in thinking. A BN government will say privatisation is good for the people. After that they say I will decide how the privatisation works, but for PR, it will have to ask a fundamental question: "How does this privatisation really benefit the people?" That translation will go through the logic of who really benefits – that is how much the entrepreneur benefits from it, how much the state benefits, how much the consumer and the people benefit.

So in redesigning the concept of privatisation, previously you had only two parties – the government, as if representing the people, and the entrepreneur. But to us in PR, there are three parties – the government as the trustee or manager, the entrepreneur and the people.

What we are promoting is merakyatkan ekonomi – to create a people’s economy.

Has the state government faced any problems with the federal government or has it imposed any constraints, if so, how are you overcoming it or coping with it?

I think there is the perception problem as well as the real problem. The perception problem is that since we are not part of the so-called federal government team, the federal government may, in its own way (laughs), make sure you will not be able to manage the state successfully. I’m not sure that is the right attitude. As a state, I am taking a positive attitude because it is in the interest of the federal government to make sure state governments, like Selangor, are successful because the contribution of the state government towards the economy is substantial.

There are also provisions in the Constitution that the federal government will have to provide for certain things like road repair and developmental expenditure; so it’s there. Of course, there are real problems which (include) federal ministers who may be reading the Constitution a little less intellectually (laughs), and there’s a big difference.

Therefore, they are more interested in serving the party and members of the party over and above the people. For example, the incident of the tourism minister who awkwardly requested that all state government activities with regard to tourism be handled by appropriate people of the same party, and if not, these activities would not receive the relevant funds. I’m asking a parliamentary question and hopefully it gets answered. Does the tourist discriminate between Umno proposals and the rest, if not when tourists come to Kuala Lumpur or Selangor, (do) they ask who is ruling the state and then decide whether to visit or not. Also the rural development minister who is now, in his own way, trying to say you’re (not) part of the federal system but the state system, and this utilisation of taxpayers’ money by way of discriminatory management is a question for the future.

I think the country will have to grow up and ask itself if this is the right way. Maybe the people may want to challenge it if it is ultra vires the Constitution to discriminate in the use of taxpayers’ money and select-ion of people that creates redundancy that costs the taxpayer.

We also heard that civil servants – senior civil servants – have now become politically affiliated. This is the most dangerous thing to happen. We don’t mind the politicians because maybe they lack a conscience or intellectual abilities, but for civil servants, we should recommend they quit their job if they want to be affiliated with political issues, but this is the next move.

Would you recommend that civil serv-ants involved in political activities quit their jobs, including those from PR?

Ya, ya, this is for everyone. This is what I’m trying to do. Of course, you have political secretaries (but) that is a different thing altogether. I want to later on resolve this through talks with civil servants – how they see themselves in a purist society and purist political activities.

It has been 100 days, what investments are you working on securing?

I went to Dubai because of my previous contacts and the contacts of PKR de facto leader Datuk Seri Anwar Ibrahim. He had a number of prominent investors wanting to come to Selangor. I’m happy to say the investors we met are very knowledgeable. I don’t have to tell them where Selangor is. I’m also glad to say they have already (made) proposals to the state and want to implement these as effectively as possible. I think we are not talking about small sums of money but over US$10 billion (RM32.7 billion) … but the concept we want is basically to create a fund for Selangor and for states interested in doing that, so that we make this an equity fund. Not only does it create the project on the ground but also makes funds available for financing or providing capital for the project. We hope in another 100 days, we will be creating this investment centre, for both local and international investors.

Is it like a mini-Bursa Malaysia?

No, this is not a trading thing. This is like an investment house where you provide facilities for equity investment. You also provide facilities to support investors on their project evaluation, land identification, and also certain areas on tax and such. Most people just have an investment centre, like people come and say I want to invest in Klang, so we have a picture of Klang and all that. We are more than that. Say (someone says) I want to invest in steel manufacturing. We will say these are the conducive areas, inform them of the competitors available in Selangor, in this part of the world.

That means we will provide them the business decision support, the cost of land and such. At the same time, we also have a group of investors – that we can call if the project is viable – to say they can also put in their equity or financial participation, so we have a total package in one state. Last time, if they were to say I want to know whether there is funding opportunity, our people would say: "Here is the list of banks you have to go to." But here, we say: "You stay here, we will call the banks and we also have our own funds." So it is a more integrated approach.

You mean this will be a matchmaking of local business partners?

Locally and internationally. There will be a centre, yes. So if you want to join a club, let’s say the Investor’s Club of Selangor, the prerequisite is that you must have a RM500 million fund, so anyone with less than that is not part of the club. So we already have 10 international groups with more than RM500 million, they can come and approach us and the fund is ready. Then, they also look at the project. They want to make Selangor the centre of this equity and Islamic fund.

Will this investment centre only be in Selangor or also in the other four PR states?

A little bit more Selangor-biased, secondly a little bit Pakatan states-biased and a little bit more Asean-biased. Okay, that’s that (laughs).

You said Selangor’s growth is actually higher than the federal government’s and you’re managing the resources. Would you help the other PR states? Is there any plan to?

We will work together. I don’t think my fellow Pakatan states are seeking help but they want to seek investment opportunities together. I think they are working with us. Of course, if I have a proposal that comes to Selangor that fits Kelantan, I will approach them to say this is an opportunity. Maybe Kelantan also has a proposal that requires funding, they can come to Selangor. But the reason the centre is more Selangor-biased is that it is close to the financial activities of the capital – it is the centre. And also it’s where the gateway of investors is. The moment they reach Subang airport, they are basically in Selangor. So we are fortunate to have this centre. The argument for Selangor is that the infrastructure is already in place here; we just enhance the opportunity.

How would you describe your first 100 days in office? The good times and the most challenging? What future challenges do you expect?

The challenging part was to get a foot in Selangor. We had 36 seats with the three components – Keadilan 15, DAP 13 and PAS eight. At that stage, the parties were identified separately, then we talked about a single packaging and getting the confidence of the Sultan and the government to say "Yes, this is a good combination and we should recognise it". Those weren’t tough moments, they were unnerving. It was not a shotgun marriage. I never would have thought it was a shotgun marriage, but it was still a marriage of groups which understood each other but hadn’t exchanged rings (laughs). We got into the system and selected the team and decided how to mould the people.

Then of course the rings were exchanged and now you have a Pakatan Rakyat. I would give Anwar, (DAP stalwart Lim) Kit Siang and (PAS president Datuk Seri) Ustad Hadi (Awang) some credit for that. I come from the corporate world. I don’t know how they come together and exchange ideologies. But it’s a good thing. It’s tough because I am not trained as a political scientist. I’m more what’s called a bottom line chap who says: "Eh, how much will it cost to adopt it? What are the risks involved to adopt it?" If I continue to ask the costs and risks question, it will never happen (laughs), but they did it. Once it is packed though, I can organise it.


On hindsight, would you say there have been mistakes you have made in these three months?

Ya, I would say the pig farming issue was not really a mistake, but we are transparent, we tell ourselves we are transparent. We adopt the principles of accountability. So when we looked at the Selangor government’s pig farming project, I thought it was a reasonable one after having spent a lot of resources going around the world. Then I thought "Eh, let’s do it. After all, it is necessary because we are not under the threat of diseases like JE (Japanese Encephalitis), and it was settled. The quality of water in Selangor as a result of the management was bad, and then we move to another area where we have this problem of land resource not being utilised, and I thought it was a reasonable thing. Then those who supported this in the previous government, when we opened up, turned around 180° and said "it’s against the religion and all that".

I think I could have delayed the whole thing and created a situation where there is a need and then take advantage of the situation, rather than give them the (rationale) that this was the product of the previous government. But I found out that politics is real, they can change their scheme. It’s fortunate that I read all their papers and I could see their photographs in Germany and all that, and they could not say they had not done it, but we could have done it in a more politically savvy way – meaning taking credit for what you have not done, but blaming the previous government for inefficiency and all that sort of thing, but I didn’t. The backlash was quite big because the Umno group was trying to create a clash between DAP and PAS and that caused a little bit of concern.

You were busy fire-fighting?

Ah, ya, I was fire-fighting ... and then I made a statement on the need to ensure that foreign workers are identified and all that. Wah! I got a backlash from everybody. I don’t know why so many people have a loving attitude towards foreign workers. But in the end, I realised that it is their humane nature. Even water … I have to contend with answering questions in Parliament on why I should give free water to the people because they will keep wasting water. That was one.

Secondly, that it was corrupt to give to the people. You won the election, so you give free water. My answer to this was very clear. I said to the MP from Johor, if Umno has already – the word I used was bertaubat – which means repented, and said they would no longer accept rasuah (bribe), why don’t you give a list, write a letter to the Selangor Umno liaison and give the MB a list of all Selangor Umno (members) who don’t want to get free water, and I will just deduct it from Syabas (Syarikat Bekalan Air Selangor) and that money will go towards the poor.

The levy on foreign workers, will it continue?

Yes, we are looking at some provisions of the Local Government Act. Among these is Section 111, which says the local government has the right to monitor who stays on a premises. So we are going to use the law in that regard to find ways and means to create revenue to finance the expenditure for monitoring foreign labour.

What do you say to the unfavourable response to this from NGOs?

Well, they have their own humane way of doing things. But I also have a balance to keep. The population needs us to take care of their security. It is an issue of the future.

Do you think free water will create an anomaly because it is also going to the very rich in big bungalows and people in low-cost flats who don’t have individual metres and don’t qualify?

We appreciate that situation and in fact, even Cuba now has moved out of the egalitarian concept, but what we are providing is basic-ally the base. For example, if we have free education for all, that means you are non-discriminatory. It’s a base, but not a luxury base. For those who have swimming pools, they pay much more. Twenty cubic metres is not the total consumption of households. It’s 30cu m. So 20cu m is the lowest base in terms of consumption. Normally people use up to 30cu m, but for the rich, we’re talking about multiples of that. So it’s better to give all than to carry out discriminatory exercises ... except for scholarships – those who are rich will not get it.

On the water issue, now that you’re giving back to the people, the state’s revenue is going to be affected.

Now, that’s the trick. It is not from the state government’s resources, it’s from the government’s investment wing because the state government is not involved in the funding of the project. It is KDEB (Kumpulan Darul Ehsan Bhd) – you look at the accounts. That means we are saying it is now time for the private sector – part of the government – to provide for this situation. If they make a lot of profit, not only do they translate this in terms of dividends which go back to the state government, but they give dividends to the people. That’s how it is done.

Later you will see the way it is being done. I will not tell you because I am told to make sure I don’t reveal the restructuring mechanisms as other states (may) have to pay Selangor for the … consultancy (laughs). I think other states would have loved to do it. Even though it looks simple, they would have loved to do it. Can you imagine? At a time when the government is pushing petrol prices over 40%, this small gift of water is a reality. We are doing it in a way that will not hurt people immediately.

Do you see a need for a common policy for the PR states? For instance right now, people say there is inconsistency because you say there is free water in Selangor but there isn’t in Penang?

The PR states are going to the second platform where there will be a conference or a meeting of the PR MBs and chief ministers and we work out the policy parameters. But for Selangor, we could not not do it because it was part of the manifesto.

The federal government has announced cost saving measures like reducing ministers’ entertainment allowances by 10%, will Selangor follow suit?

I think we will look at a lot more than that. The way we’re doing it is not just cutting. We want to create value for money situations. That’s why we didn’t come out and say we were cutting everyone’s allowance. If you do this, the sum is minimal compared to the RM46 million, and then you subsidise transport. Our view is, don’t create the mistake of a big picture by painting a small dot of sunshine somewhere (laughs). We don’t come from that school. We work on the basic structures and improve on it.

What will your cost saving measures be?

We will decide how to ensure the rakyat has adequate food and resources. It’s more than cutting costs. Cutting costs for people who earn RM800? They’ll look at us as if we came from another planet. We’ll take time, look at the situation and adopt different strategies.

What about the PM’s challenge to PR states to provide a subsidy for oil?

I will be quite happy if they change the government and we go into the federal government, you will see how marvellously it can be done. In making that statement, if he says he will retire and let Pakatan take over, I’m quite sure the rakyat will have a choice. We are the better choice.

How much of your manifesto have you covered?

We’re going to announce our management and welfare activities of the state. Then, we would have done about 60-70%, but there are issues we are worried (about). There are areas that we have declared we may have to have a second or third look at. It’s the reduction of assessment. The reason for this is that we have a tactical problem. We didn’t realise that contracts of the previous government are negotiable. In a negotiated contract, profitability is in-built in the contract. In most cases, those who get the contract like to be nice to the MB, sometimes kiss his hand, because it’s over a 30% reward. So you need to take some time to reduce the reward to about 7%. And advertising revenue is sometimes not calculated, so we have to bring in as much revenue, as much cost control to really say there are more than enough funds for maintenance of local authorities. Only then can we declare the reduction.

You said 70% of your pledges will be fulfilled, but when your term is up, four or five years down the road?

By then we would have more than 130%. There will be extra but we have to be real-istic. What we can deliver we have to say we can deliver. BN delivered what? They said prices would rise, they did. They delivered. No one went to the police to make a report.

What is the state doing to address the crime situation in Selangor?

We have got the commissioner of police to brief the exco on the problems. You must remember this – Klang’s economy is equivalent to that of the whole of Negri Sembilan, but the number of police personnel in Negri is three or four times that in Klang. Now, what are our options? To create another force? That’s unconstitutional. So we are working with police to create a community-based vigilante effort, but that needs to go through the process. So I’m hoping we will come up with a budget next year on how to help in terms of security for families and community. We haven’t got the answers, but there is discussion. It’s not easy. It requires at least six months to train a policeman.