Malaysia Update: November 28, 2018

Malaysia Update | November 28, 2018
Authors: Kim Yaeger, Tina Jamaluddin, Emma Tabatabai and Bryan Yeoh
 
 
THE COUNCIL'S TAKE
 
 

PKR Polls and Possibility of Cabinet Reshuffle

The People’s Justice Party (PKR) held its two-day national congress at the Ideal Convention Center in Shah Alam from November 17 to 18. The start of the party’s national congress officially concluded PKR’s internal elections which began on September 22. Anwar Ibrahim ran uncontested for the party President position and is no longer the appointed de facto leader, a position created for him back in 2007. Minister of Economic Affairs Azmin Ali secured the Deputy President position after a fierce contest against Rafizi Ramli. Minister of Domestic Trade and Consumer Affairs Saifuddin Nasution remained in his position as Secretary-General while the Vice-President positions were filled by Nurul Izzah Anwar, Tian Chua, Zuraida Kamaruddin and Xavier Jayakumar. Outgoing party president Wan Azizah was appointed by party delegates as chairman of the new Advisory Council.

Throughout the polling season, the fierce contest for the Deputy President position between Azmin Ali and Rafizi Ramli highlighted internal rivalries within the party. The Azmin-Rafizi rivalry dates back to 2014 with the botched “Kajang Move”. Rafizi was the architect of the failed political maneuver which attempted to allow Anwar to be elected as Chief Minister of Selangor. Instead, a series of missteps saw Azmin become Chief Minister. His rapid political ascendance since then is seen as a threat to Anwar’s position in the party by pro-Anwar members. Rafizi’s challenge against Azmin was grounded on an attempt to secure Anwar’s position in the party. Allies to Azmin captured a significant number of positions with four vice-president positions, leadership of the Women wing and 15 seats in the Central Leadership Council.

With the conclusion of the elections, Anwar has the task of mending splits within the party while managing the new power dynamics that have emerged. It is expected that Anwar will appoint members loyal to him for the remaining vacant positions. According to PKR’s constitution, the party president is allowed to appoint five Central Leadership Council members, two Vice-Presidents, a Secretary-General, an information chief, a treasurer and 14 state chairmen.

Addressing the rumors of a possible Cabinet reshuffle because of PKR’s elections, Prime Minister Mahathir stated in an interview with the Malay Mail that he has no intention to reshuffle the Cabinet but is open to the idea if component parties of Pakatan Harapan insist on it. While he has in past months stated his dissatisfaction with the performance of his Cabinet, he admitted that six months is too early for any judgement calls. He urged the public to give the Cabinet a chance as many ministers are new to governing at the federal level.

UMNO Losing Members; Disunity Over Direction and Leadership

The post-election months have seen an increasing trend of UMNO members leaving the party as a result of dissatisfaction with the direction of the party. Former party president Najib Razak resigned as party president of UMNO after losing the general elections. As a result, former Deputy Prime Minister Ahmad Zahid was appointed acting President of UMNO and was subsequently elected as President in June. While he promised to lead UMNO’s resurgence, the party is struggling to adjust to the roles of the opposition. Party morale within UMNO has been low especially after Ahmad was charged with corruption, abuse of power and money laundering. Recently, Ahmad called for a merger between UMNO and PAS which was met with opposition from UMNO members and component parties of the National Front (BN). UMNO Secretary-General clarified that Ahmad’s statement was misinterpreted as a merger when it was intended as a statement of cooperation.
In the elections, UMNO won 54 federal seats but currently have 48 seats remaining with rumors of more possible resignations. Some notable resignations from UMNO include:

  • Anifah Aman, former Minister of Foreign Affairs who resigned to support the ruling government’s plan to restore Sabah’s state rights. He is currently an independent representing Kimanis.
  • Mustapa Mohamed, former Minister of International Trade and Industry who resigned because of disagreements with the party’s current direction. Subsequently, he joined the ruling coalition component party, BERSATU.
  • Rozman Isli, representative for the federal territory of Labuan left UMNO to join Warisan.
  • Mas Ermieyati Samsudin, former Deputy Minister of Tourism and Culture who resigned from UMNO and is currently an independent.

While the defections from UMNO are not currently mathematically significant, the lack of a strategic direction from UMNO poses a big question for component parties of the current opposition coalition. The Malaysian Chinese Association (MCA) has threatened to leave BN if UMNO and PAS move forward with a merger stating ideological differences and the need to preserve BN’s focus on representing all communities in Malaysia.

 
ADVOCACY UPDATE
 
 
The Council has continued its advocacy efforts on Bank Negara Malaysia’s Risk Management in Technology (RMiT) Exposure Draft.  This draft sets out extensive rules for financial institutions' technology risk management frameworks, covering topics including cybersecurity management, cryptography, data center management, standards and regulator notification of technology projects. A first draft of the Council’s submission has been circulated based on member input.  Members can submit further comments on the Exposure Draft to Ian Saccomanno at isaccomanno@usasean.org and Tra Nguyen at tnguyen@usasean.org by November 26. A final draft of the Council's letter will then be circulated for further review and edits.
 
IN THIS UPDATE
 
 
Regional Affairs
Mahathir Renews Malaysia’s Love Affair With Japan
Malaysia, Indonesia achieve breakthrough in territorial disputes
Dr M tells Apec leaders to make bloc truly equal
Sta Maria a breath of fresh air

National Affairs
EPF raises minimum basic savings target to RM240k
Dr M hails local academics, higher education institutions
Dr M says damage control report to be released next year
Najib says he’s ‘lucky’ to avoid sodomy rap over 1MDB probes
Malaysia’s Mahathir dumps pledge to ratify UN treaty on racial discrimination
Govt mulling over enacting Parliamentary Services Commission Act
Pakatan to consult public before abolishing draconian laws, PM says
Legal, banking, engineering, tech roles high in demand
Three things we learnt from: PKR’s first congress, polls as ruling party | Malay Mail
Dr M: No plans for Cabinet reshuffle now

ASEAN
Asean will start negotiations on CoC in January 2019, says foreign minister

Customs
Finance Ministry urges owners to claim almost RM10bil in unclaimed monies
Govt incentives for exporters
'Digital tax only on services, not on transactions'

Economics
PH govt could not do much in Budget 2019, lack of revenue sources
Malaysian economy could pick up after 2020: Moody’s Analytics
Cancelled projects may give Malaysia buffer from global risks: UOB economist
Government confident of cutting fiscal deficit
BNM: Malaysia's Q3 grew 4.4pc, on private consumption
PH govt to adopt three thrusts to improve economy, says Guan Eng
Bank Negara confident of 4.8% GDP growth in 2018, economists cautious
‘Circular economy’ can be achieved, says Jeffrey Cheah
Malaysia saw lower exports in 3Q18

Energy
New govt policies to boost affordable solar energy: Minister
Malaysia to fully implement new biodiesel programme from February 2019
Malaysia plans 500-MW solar tender in early 2019 - report
Malaysia's Petronas sets up team for renewable energy push
Government optimistic of meeting 20pc renewable energy target over next seven years | Malay Mail
Ministry to study proposal to standardise electricity tariffs for school and Govt buildings
Good ecosystem crucial to complement electric car initiative : MAA
Clearly on the green track
Amid oil price scare, minister says Malaysia not too dependent on crude revenue

Financial Services
Rules for cryptocurrency exchanges, ICO in force by Q1 of 2019, says Guan Eng
SC to allow more diversified ETFs in 2019
Malaysia: Foreign insurers told to choose and advise
Bank Negara confirms foreign insurers can contribute to B40 health scheme or reduce stake in local players

Food & Agriculture
Govt in midst of drafting national agro-food policy - Dr Mahathir
Malaysia bets on durian as China goes bananas over it
Dr M says agriculture can evolve with technology, despite limited government funds

Health & Life Sciences
IHH Healthcare slips into the red in Q3

ICT
Malaysia's ride-hailing drivers must register for PSV licence from January
MCMC: Putrajaya looking to boost country’s digital infrastructure

Infrastructure
One-way trip on Skypark Link to cost RM11 starting Jan 2019
Langkawi to get new water treatment plant next year, minister says
What Malaysia’s MRT has to learn from Indonesia’s BRT
Malaysia's AirAsia X reports wider Q3 loss on higher fuel cost

Travel & Tourism
Malaysia's air passenger traffic to hit 100 million despite slower growth
‘Departure levy negative for aviation sector’
AirAsia to service KK-Sibu and KK-Bintulu routes, beginning Jan 2019
Malaysia Airports' Q3 net profit doubles to RM168m
 
ARTICLE CLIPS
 
 
Regional Affairs

Mahathir Renews Malaysia’s Love Affair With Japan The Diplomat 27th Nov 2018
Samurai bonds are yen-denominated bonds that foreign entities can issue in Japan to raise capital. The Japanese government has pledged to guarantee $1.8 billion worth of 10-year Malaysia-issued bonds at an indicative coupon rate of 0.65 percent.

Malaysia, Indonesia achieve breakthrough in territorial disputes Free Malaysia Today 22nd Nov 2018
After 13 years of negotiations, Malaysia and Indonesia have finally achieved a breakthrough with regard to the two maritime territorial disputes in the Sulawesi Sea and the southern part of the Melaka Straits.

Dr M tells Apec leaders to make bloc truly equal Malay Mail 18th Nov 2018
Tun Dr Mahathir Mohamad said today that he told leaders of the Asia Pacific Economic Cooperation (Apec) bloc to raise up developing nations, citing fears of worsening inequalities caused by technological advances. The Malaysian prime minister said information technology in less developed countries must be improved.

Sta Maria a breath of fresh air NST 16th Nov 2018
Tan Sri Rebecca Fatima Sta Maria, the incoming executive director of Apec Secretariat, will be a "breath of fresh air" for the Singapore-based body, Malaysian officials said.

National Affairs

EPF raises minimum basic savings target to RM240k The Star Online 28th Nov 2018
The Employees Provident Fund has revised higher the minimum basic savings target for retirement at age 55 to RM240,000. The basic savings target, which represents the amount considered sufficient to support EPF members' basic needs for 20 years upon retirement, was previously set at RM228,000.

Dr M hails local academics, higher education institutions Malay Mail 27th Nov 2018
The achievements of staff at higher education institutions in meeting the country’s aspirations are encouraging, Prime Minister Tun Dr Mahathir Mohamad said today. He said although there was still plenty of room for improvement, the institutes and academics had charted numerous achievements recognised internationally.

Dr M says damage control report to be released next year Malay Mail 26th Nov 2018
A full report on damage control measures implemented by Pakatan Harapan government after taking over the country’s administration will be released next year, Prime Minister Tun Dr Mahathir Mohamad said. He said the report would include details on results of actions taken by the current government in tackling problems left by the previous government.

Najib says he’s ‘lucky’ to avoid sodomy rap over 1MDB probes South China Morning Post 26th Nov 2018
Former Malaysian prime minister Najib Razak’s trial for his alleged links to the 1MDB financial scandal is just over two months away, but he is facing a painful crawl towards his day in court as authorities continue to open fresh probes to find out the full extent of his involvement in the case.

Malaysia’s Mahathir dumps pledge to ratify UN treaty on racial discrimination South China Morning Post 23rd Nov 2018
Malaysian Prime Minister Mahathir Mohamad has dumped a pledge to ratify a UN treaty against racial discrimination amid intense pressure from Malays, who claim it would jeopardise controversial race-based affirmative action policies that benefit them.

Govt mulling over enacting Parliamentary Services Commission Act NST 22nd Nov 2018
The government is studying enacting the Parliamentary Services Commission Act to ensure Parliament is free from influence by the executive branch of government.

Pakatan to consult public before abolishing draconian laws, PM says Malay Mail 22nd Nov 2018
Putrajaya fully intends to abolish the country’s draconian laws but will consult the public first over the matter, Prime Minister Tun Dr Mahathir Mohamad said today. The Langkawi MP said some in the public still feel that repealing the laws may open up the floodgates for criminal activities.

Legal, banking, engineering, tech roles high in demand News Straight Times 21st Nov 2018
Legal, banking, engineering and technology roles will be in high demand in the Central and Greater Klang Valley regions, according to Robert Walters, a specialist professional recruitment consultancy company. This is due to the implementation of new government policies, coupled with increased adoption of digitalisation in business processes, the company added.

Three things we learnt from: PKR’s first congress, polls as ruling party  The Malay Mail 19th Nov 2018
Forget the annual Umno General Assembly. With Pakatan Harapan (PH) in power, PKR’s National Congress seems to be where all the drama and excitement was. The PKR three-day congress over the weekend signaled the end of a fairly dramatic party election that spanned weeks, impacting the nation in more ways than one.

Dr M: No plans for Cabinet reshuffle now The Star Online 16th Nov 2018
Prime Minister Tun Dr Mahathir Mohamad said there are no plans of a Cabinet reshuffle unless other members in the Pakatan Harapan coalition want it. “I am not going to but they might want. They might insist so I will have to consider. “For my part, I have not decided about reshuffling,” he told the media at the end of the 33rd Asean summit here yesterday.

ASEAN

Asean will start negotiations on CoC in January 2019, says foreign minister Malay Mail 26th Nov 2018
Asean will start negotiations on the Code of Conduct (CoC) in the South China Sea with China in January 2019, said Foreign Minister  Datuk Saifuddin Abdullah.

Customs

Finance Ministry urges owners to claim almost RM10bil in unclaimed monies The Star Online 27th Nov 2018
Unclaimed monies amounting to RM9.974bil from various entities had been submitted to the Accountant-General's Department as of Oct 31 this year, said Finance Minister Lim Guan Eng.

Govt incentives for exporters The Star Online 23rd Nov 2018
Exporting companies have been urged to explore government incentives and financial assistance provided via the Malaysia External Trade Development Corp (Matrade).

'Digital tax only on services, not on transactions' New Straits Times 22nd Nov 2018
The recently announced digital tax will only apply on services offered online that requires a payment to the company, not on transactions made, said tax advisory firm Axcelasia Taxand Sdn Bhd.

Economics

PH govt could not do much in Budget 2019, lack of revenue sources News Straight Times 26th Nov 2018
The first national budget unveiled by the Pakatan Harapan (PH) government recently received mixed reactions from the public, particularly the T20 and M40 income groups that live in major cities.

Malaysian economy could pick up after 2020: Moody’s Analytics theSundaily 25th Nov 2018
Malaysia’s economic growth could accelerate beyond 2020 if commodity prices were to pick up on the back of a recovery in global economic expansion.

Cancelled projects may give Malaysia buffer from global risks: UOB economist News Straight Times 22nd Nov 2018
The government’s deferment and cancellation of some infrastructure projects is not necessarily a bad move, UOB Malaysia senior economist Julia Goh said. It could provide Malaysia with some buffers from global risks, she added.

Government confident of cutting fiscal deficit The Star Online 19th Nov 2018
Systemic reforms will require time to implement and some parts of the economy may be in for a rough ride but with strong fiscal management and institutional reforms, Malaysia will continue to be on a stronger and more sustainable growth path, Finance Minister Lim Guan Eng says.

BNM: Malaysia's Q3 grew 4.4pc, on private consumption New Straight Times 18th Nov 2018
The Malaysian economy grew by 4.4 percent in the third quarter of 2018 with private sector activity continued to be the primary driver of growth.

PH govt to adopt three thrusts to improve economy, says Guan Eng Malay Mail 18th Nov 2018
The Pakatan Harapan (PH) government will be adopting the approach of three thrusts in the effort to improve the country’s economy to give confidence to investors and to raise the quality of life of the people.

Bank Negara confident of 4.8% GDP growth in 2018, economists cautious theSundaily 18th Nov 2018
Economists have mixed views on Malaysia's full-year gross domestic product (GDP) growth despite the central bank's confidence the economy will expand 4.8% this year.

‘Circular economy’ can be achieved, says Jeffrey Cheah The Star Online 16th Nov 2018
The circular economy in Asia, which is the best chance in reversing the causes of climate change and achieving environment-focused goals, is achievable with the right innovation and invention, said Sunway University chancellor and Sunway Group founder and chairman Tan Sri Jeffrey Cheah.

Malaysia saw lower exports in 3Q18 New Strait Times 16th Nov 2018
The country's exports grew 5.2 per cent to RM251 billion in the third quarter of 2018 as compared to 8.2 per cent with a value of RM245 billion in the previous quarter.

Energy

New govt policies to boost affordable solar energy: Minister www.thesundaily.my 28th Nov 2018
The government intends to provide sustainable, reliable and affordable solar energy for Malaysians through new policies beginning Jan 1, 2019, such as the New Net Energy Metering (NEM) Scheme and Supply Agreement for Renewable Energy (SARE), says Energy, Science, Technology, Environment and Climate Change Minister Yeo Bee Yin.

Malaysia to fully implement new biodiesel programme from February 2019 The Business Times 28th Nov 2018
Malaysia on Monday said it will start to phase in a higher biodiesel mandate from next month, with the new rule coming into full force from February in an effort to bolster the palm oil industry.

Malaysia plans 500-MW solar tender in early 2019 - report Renewablesnow.com 28th Nov 2018
Malaysia is expected to launch a 500-MW solar power tender in January, The Start reports, citing a government official.

Malaysia's Petronas sets up team for renewable energy push Reuters 27th Nov 2018
Malaysian state-owned oil and gas firm Petroliam Nasional Berhad, or Petronas, has set up a new business within the group to make a push into renewable energy, the head of the new venture said on Tuesday.

Government optimistic of meeting 20pc renewable energy target over next seven years | Malay Mail The Malay Mail 27th Nov 2018
The government is optimistic of achieving its target of 20 per cent electricity generation from renewable energy (RE) sources, equivalent to 3,991 megawatt (MW), over the next seven years via various initiatives, programmes and policies.

Ministry to study proposal to standardise electricity tariffs for school and Govt buildings The Edge Markets 22nd Nov 2018
The Government will study proposals to standardise the electricity tariffs for school and Government buildings, said Energy, Science, Technology, Environment and Climate Change Minister Yeo Bee Yin.

Good ecosystem crucial to complement electric car initiative : MAA The Edge Market MY 21st Nov 2018
The Malaysian Automotive Association (MAA) hopes the government will give more focus on developing an environmentally-friendly ecosystem for electric car vehicles, which is one of the focal points of the automotive industry moving forward.

Clearly on the green track Star Online 17th Nov 2018
Some RM2bil worth of projects will be up for bidding in January next year to produce 500MW of electricity via solar power.

Amid oil price scare, minister says Malaysia not too dependent on crude revenue Malay Mail 16th Nov 2018
Minister of Finance Lim Guan Eng insisted today that Putrajaya’s finances will not be affected if oil prices drop.

Financial Services

Rules for cryptocurrency exchanges, ICO in force by Q1 of 2019, says Guan Eng The Star Online 28th Nov 2018
The regulations for digital asset or cryptocurrency exchanges and initial coin offerings (ICOs) will also come into force by first quarter of 2019, says Finance Minister Lim Guan Eng. He said on Wednesday the Securities Commission (SC) had given him an update that the regulations would be part of the regulator's efforts to facilitate alternative fundraising avenues and new investment asset classes.

SC to allow more diversified ETFs in 2019 The Star Online 26th Nov 2018
The Securities Commission Malaysia (SC) will allow the issuance of more diversified range of Exchange Traded Funds (ETFs) in the market with effect for Jan 2, 2019.

Malaysia: Foreign insurers told to choose and advise Asia Insurance Review 19th Nov 2018
Bank Negara Malaysia (BNM) Governor, Ms Nor Shamsiah Mohd Yunus, has said that foreign insurers, that have yet to comply with the central bank's requirement to trim their holdings in Malaysian insurance companies, have to advise whether they choose to contribute to a proposed national health insurance fund for the less affluent in the country.

Bank Negara confirms foreign insurers can contribute to B40 health scheme or reduce stake in local players theSundaily 18th Nov 2018
Bank Negara Malaysia (BNM) has confirmed that foreign insurers may now opt to contribute to the B40 Health Protection Fund instead of reducing their stakes in Malaysian insurance firms.

Food & Agriculture

Govt in midst of drafting national agro-food policy - Dr Mahathir Bernama.com 28th Nov 2018
Prime Minister Tun Dr Mahathir Mohamad said the government is in the process of drafting the National Agro-Food Policy 2021-2030, the objective of which is to spur the modernisation of the agro-food sector.

Malaysia bets on durian as China goes bananas over it The Star Online 27th Nov 2018
The spiky durian is set to become Malaysia's next major export as the Southeast Asian nation rushes to develop thousands of acres to cash in on unprecedented demand for the fruit from China.

Dr M says agriculture can evolve with technology, despite limited government funds Malay Mail 22nd Nov 2018
Tun Dr Mahathir Mohamad said technology will help revolutionise the agriculture sector even with limited government funding as Putrajaya has been forced to tighten its belt in the 2019 Budget.

Health & Life Sciences

IHH Healthcare slips into the red in Q3 New Straight Times 27th Nov 2018
IHH Healthcare Bhd slipped into the red with a net loss of RM104.07 million in the third quarter ended Sept 30, 2018, against a net profit of RM82.09 million a year earlier.

ICT

Malaysia's ride-hailing drivers must register for PSV licence from January Channel NewsAsia 27th Nov 2018
Drivers for ride-hailing services such as Grab in Malaysia will be required to register for a Public Service Vehicle (PSV) licence - similar to taxi drivers - from January next year.

MCMC: Putrajaya looking to boost country’s digital infrastructure Malay Mail 23rd Nov 2018
The government is developing a plan to invest and further improve the country’s digital infrastructure to ensure greater availability of broadband services by promoting competition.

Infrastructure

One-way trip on Skypark Link to cost RM11 starting Jan 2019 Malay Mail 27th Nov 2018
Travelling on the Skypark Link, a train service connecting KL Sentral station to Skypark Terminal at the Sultan Abdul Aziz Shah Airport (LTSAAS), Subang, will cost RM11 for one-way trip, effective Jan 1.

Langkawi to get new water treatment plant next year, minister says Malay Mail 27th Nov 2018
The Water, Land and Natural Resources Ministry is currently in discussion with Syarikat Air Darul Aman (SADA) and a private company to build a new water treatment plant next year to boost supply of treated water in this island.

What Malaysia’s MRT has to learn from Indonesia’s BRT South China Morning Post 23rd Nov 2018
Jakarta is far from perfect traffic-wise. But at least its public transport, namely the BRT, is doing what it is supposed to do: getting people moving cheaply and within a reasonable amount of time. That’s what all Southeast Asian cities should bear in mind as they examine the many options on the table. They could certainly take a cue from Jakarta.

Malaysia's AirAsia X reports wider Q3 loss on higher fuel cost Channel News Asia 21st Nov 2018
Malaysia's AirAsia X Bhd reported a sharply wider third-quarter net loss on Wednesday (Nov 21), the airline's second consecutive quarter in the red due to higher fuel prices. Volatile fuel costs have been a significant pressure on the long-haul budget offshoot of AirAsia Group Bhd, and analysts expect that will continue to be a challenge for the airline's expansion plans.

Travel & Tourism

Malaysia's air passenger traffic to hit 100 million despite slower growth Channel NewsAsia 27th Nov 2018
Malaysia’s air passenger traffic is expected to grow to between 100.3 million and 101.1 million passengers in 2018 despite an estimated growth rate of between 1.1 per cent and 2.2 per cent in 2018.

‘Departure levy negative for aviation sector’ theSundaily 25th Nov 2018
The proposed airport departure levy announced in Budget 2019 will have a negative impact on the local aviation industry, said RHB Research analyst Stephanie Cheah.

AirAsia to service KK-Sibu and KK-Bintulu routes, beginning Jan 2019 New Straits Times 21st Nov 2018
The government has taken out two routes under the Rural Air Services (RAS) agreement, Kota Kinabalu-Sibu and Kota Kinabalu-Bintulu to be operated by AirAsia beginning January, 2019, said Transport Minister Loke Siew Fook.

Malaysia Airports' Q3 net profit doubles to RM168m The Star Online 21st Nov 2018
Malaysia Airports Holdings Bhd's net profit surged 108% to RM168.49mil in the third quarter ended Sept 30, 2018 and it expects the current financial year to be better due to higher passenger traffic for Malaysia and growth momentum in Turkey.