THE “RUBBER GLOVE SYNDROME”

During mid 80’s, I’ve met up with a potential American investor looking at the possibility of setting up a examination rubber glove factory in Malaysia. These gloves are for consumption in the US markets. Apart from looking at the possibility of investing, he also managed to talk to a number of Malaysian investors who are eager to invest in new opportunities. After series of talks and negotiations, the American offered a deal to these Malaysian investors to produce and supply a minimum of 10 million pieces of gloves per month. He is expecting a total constant supply of about 50 million pieces a month. At least 10 local manufacturers were then frantically set up examination glove factories all over Malaysia with each producing an average of 10 million pieces monthly supplying to that particular American investor’s need – equivalent to a total production capacity of about 100 million pieces per month. In actual fact, that US trader only commands a market share of about 50 to 60 million pieces monthly.

By the time these 10 factories were in production, news that rubber gloves are the “new gold” spread throughout Malaysia and no sooner that dipped rubber glove factories started mushrooming and expanding supplying various types of dipped gloves especially for the US markets and the European markets. In less than 5 years, there was intense competition among the local small and medium scale glove manufacturers both in securing constant supply of latex as main raw material and particularly in trying to secure market orders from a few select US traders. As the competition became more and more intense, new players crept into the market resulting in excess production capacity. Price war then emerged as the prime tool for these manufacturers to outdo each other. As a result, the rubber glove industry has turned itself into “survival of the fittest” – product quality of some of theses manufacturers soon deteriorated and export price of rubber gloves dipped further. What was left was only a few survivors; some were bought over by larger corporations, both by local and foreign investors. Others died in doldrums.

The real situation as described above is what I personally called the “Rubber Glove Syndrome”. It is a common trait among Malaysian business community existed till today and forever.

The Rubber Glove Syndrome is basically termed as “the flocking of capital and assets by Malaysian businesses and investors in an uncertain market demand purely based on hearsay and artificial business environment.” In other words, most Malaysian businesses and investors are generally not business leaders but mere followers; they emulate what a select few has started and in so doing distorts market conditions and disrupts business viability.

We can see the same situation happen in the tiger prawn rearing industry, in oil palm sector, the chicken breeding industry, “kedai makan tom yam”, the cut flower industry, automotive parts manufacturing and hosts of other businesses. The same situation occurred repeatedly and will continue to occur. But then again, if a business opportunity knocks on the door, shall we just lay on the sideline watching others enjoying their Mercs, and BMW’s?

Now that the government is hype on transforming and modernizing the food production sector as outlined in the Third National Agriculture Policy and the 9th Malaysia Plan – the emergence new breeds of goat breeders, dragon fruit farmers, herbal growers and herbs formulation manufacturers, various multi-level business and so on and so forth. What’s becoming of them in a few years time? How many of them will survive? Only time will tell!

Whatever it is, the “Rubber Glove Syndrome” should be done away with!!!

SPATES OF “EXPRESS BUS” ACCIDENTS

We’ve been hearing a lot about accidents involving express busses which had claimed numerous lives. The next day, the authorities made press statement, among others, saying that the express the bus drivers involved in the accidents had multiple summonses some came as close to 30; both the Police Department as well as the Road Transport Department. How satirical!!!!

The world (if I’m not mistaken) has acknowledged the Multimedia Super Corridor locate in Cyberjaya as the new Silicon Valley with its up-to-date super infrastructure to cater to the needs of the development in the information technology.

Most (by now, may be all) government departments including especially the Police Department and the Road Transport Department have been well equipped with computer systems, hardwares and softwares that enable them to store and analyse information on road users including the summonses “incurred” by express bus’s drivers.

For the public, especially the victims’ families, to be told that the bus drivers had already have 20 to 30 summonses in hand after the fateful accidents is really too much for us to chew. I’m pretty sure that the information system that they now possess should be able to figure out well in advance of who’s who list of culprits and act accordingly well before they took the wheels heading for a showdown on our road system.

I personally urge the Traffic Police and the Road Transport Department to act pro-actively by reprimanding these culprits before they had any chance of making history in Malaysia again and again and again …………………………. Life is so sacred; or is it?

OBAMA MCCAIN vs MCCAIN OBAMA

US Presidential elections are reliable occasions for political futurology. This year’s presidential electioneering has yielded a prediction that Democrats and Republicans agree on and which European liberals anticipate – Bush will soon be gone and change is the order of the day. Change will of course occur on personnel, style and personality. The theme of this election will continue to be change. The theme of the next US administration, however, is likely to be continuity. So as was reported by Guardian News Services.

Whether Obama or McCain, whatever promises the made during presidential electioneering; as president of the United States of America will have to be highly dependable on and succumbs to various classified reports, findings, data collections, dossiers as compiled and prepared by various departments within the administrative set-ups. First and foremost, the President could not just quash reports and findings concluded by agencies such as CIA, FBI, Military Intelligence, Department of Homeland Security and a hosts of other similar agencies.

Likewise, in the area of international trade and WTO, the Department of Commerce and The US Treasury plus a few other departments and agencies play a vital role in advising the US Presidents. And then, there are hosts of “political and economic lobbyists” that for so long has featured prominently in the US administration.

To put it in simple term, Obama or McCain as US President shall be subjected to the “whims and fancies” of these so-called advisors, Presidential or otherwise. They are the one who dictate the President in making policies and decisions crucial to the existence and sovereignty of the United States. So, do not expect a major shift in policy in whatever area of interests. Obama or McCain is just next in line in the US Presidency. Nothing more than that; unless either of them are willing to do a “Lincoln” or a “Kennedy”.

OF COLONIAL MINDSET

The Star (Fintan Ng - StarBiz 14, June) A really interesting article featured. It reported that the editor of China Economic Quarterly, Joe Studwell has said that Malaysia and other South-East Asian nations had fundamentally failed to escape from the shackles of colonialism because their political and economic elites continued to work together in a relationship that did not engender entrepreneurship and innovation.

Excerpts of Joe Studwell’s in full (with blessing from The Star, I hope) – “In these countries, the post-independent period saw a shift in the ties between indigenous political elites to their non-indigenous largely Chinese economic elites from largely European economic elites before. Indigenous elites such, as Suharto, Ferdinand Marcos and Mahathir Mohamad, have also perpetrated the Victorian belief that their non-Chinese citizens do nor possess the experience or entrepreneurial spirit to run successful businesses. Studwell also said that this had led to a lower growth trajectory compared with Japan, South Korea and Taiwan. In South-East Asia, economic elites are distributed economic rents in which the conditionality is not there, such as how these rents can contribute to the meaningful development of a country’s economy via export or the creation of global companies. Japan South Korea and Taiwan, in which there were also family-run business, had done much better than South-East Asia’s economies in terms of gross domestic product per capita due to their much clearer industrial policies and emphasis on export-oriented industries. In instances where preferences or subsidies have been given, it was with conditions attached, such as building up industries that are export-oriented or technologically innovative. Japan and South Korea had many companies whose names and products were well-known the world over, which was not the case in South-East Asia. The future for South-East Asia was bleak due to the entrenched interests and the way it had become an obstacle to the future growth of the region. South-East Asia may just wallow in the lower to medium –income bracket going forward due to this essentially political failure.”

My concern is more towards the Malaysian “political elites” – both the political masters as well as the bureaucrats (the public servants). Forget about the political masters, they come and go every 5 years, some are able to retain their seats for years to come some do not. My definition of public servants – government officials of every levels providing government services to the general public like you and me. Some, if not most, the so-called public “servants” that we face daily to obtain services act as if they are our masters; acting to their own whims and fancies. Even the “budak pejabat” to a certain extent acted like lords and masters. These can be seen daily especially at Land Offices and certain other government offices throughout the country. Of course, over the years we have seen changes for the better in some of these departments providing counter services; but alas ……………………….

I fully agree with Studwell, not so much on the macro-economic aspects as he had pointed above, but more on the mindset of most of our “public servants” and “political elites” that my colleagues and I have encountered over the years. They not only have failed to escape from shackles of colonialism, worst still they are acting as if they are the colonial masters of the general public. And we have just celebrated our nation’s 50th independence. How pathetic it is. Sigh !!!

Studwell’s book, Asian Godfathers : Money and Power in Hong Kong & South-East Asia should be a good read not only to Malaysian CEO’s at large but more so to Malaysian public servants alike. His book covers the often-complex world and relationships of tycoons with the political elites of Indonesia, Malaysia the Philippines, Singapore, Thailand and Hong Kong.