6/2021 – Malaysia must reopen soon

I have been in London since Aug 4. The purpose of my trip? Medical procedures that are not available in Malaysia. Since Malaysia is categorised as an ‘amber” country, I had to self isolate and quarantine in my own apartment for 10 days.

I had to undergo compulsory swab PCR tests on day two and eight and I had the option to do an ‘early release’ swab test on the day five. Please note that arrival date is considered day zero.

To date, I have had swab tests on Aug 1 (pre-departure), Aug 6, Aug 7 (pre-admission to hospital), Aug 9 and 12. Five swab tests and so far so good, as long as I am being labelled as negative.

I have to do further swab tests today (second pre-admission) and one more pre-departure swab test in London. After landing in KLIA, I understand I will have to do an antigen test. As I am fully vaccinated, I am now allowed to quarantine in my own home for 14 days.

I do feel alienated when I walk on the streets or go into restaurants. I am so used to wearing a mask but almost everyone here in the UK do not wear masks! The exceptions are some old folks and the Chinese staff in Royal China restaurants. I understand that you have to wear masks when you take the underground trains. That’s all.

The UK economy is fully open and running at full steam. What can we learn from the UK experiment on managing a pandemic crisis? Follow the facts and data:

  • Vaccination to date – first dose 90% of adult population. second dose 76%. In three weeks time, 90% of the adult population will be fully vaccinated. UK has also started vaccinating 16 and 17-year-olds.
  • Positive cases Aug 12 – 33,074 cases a day.
  • Admission into hospital 737 cases a day
  • Patients on ventilation – 871 people
  • Deaths – average of 90 deaths a day for the last one week.

There is a correlation between vaccination ratios and seriously ill and death ratios in this UK experiment.

Vaccination ratios are up while admissions into hospital and deaths down. Positive cases will always be detected as the virus is still around and all positive cases are advised to self-isolate at home for 10 days.

What then can Malaysia learn from the British experience?

Based on our latest data:

  • Vaccination of adults – 70% have taken a first dose and 40% have taken two doses. In three weeks time, it will be 80% having taken their first dose, while 70% would have taken their second dose. So technically speaking, if we follow the British experience, we can open up our economy in early Sept. Perhaps on a precautionary step by step approach.
  • For states that have had 70% of their adult population fully vaccinated, a full opening of economic activities with a vaccination passport being the criteria for dine-ins, attending functions, religious activities and back to work, can be recommended.
  • For states that have had below 70% of their adult population vaccinated, they should remain in phase one and kept isolated from the rest of the country. A vaccination passport must be in place for economic and social activities and for inter-state travel.
  • Wearing masks and hand sanitizers must still be a compulsory part of our daily lifes. Keep it simple, there is no need to micro manage standard operating procedures (SOPs).

It has been proven that all these SOPs have been ineffective in managing the pandemic.

The key solution to this pandemic has all along been the speed of vaccination of the population. And I must give credit to our National Covid-19 Immunisation Pro-gramme coordinating minister Khairy Jamaluddin who has done a remarkable job in sourcing, planning and implementation of the vaccination campaign.

Other than Singapore and China, Malaysia has done very well if compared to the other non-western countries.

We need to re-open our economy as soon as we healthily can. Not only is our general population in deep financial difficulties, the mental health of our citizens is in great peril. We need to regain some normalcy in our lives.

Restarting economic activities with our closest neighbour Singapore must be our priority as we have lost too much in employment opportunities. Citizens of both countries who are fully vaccinated must be allowed non-quarantine travel.

As our working mothers go back to work, fully vaccinated maids must be allowed to enter the country. They should still serve the two-week quarantine rules.

Travel restrictions for business purposes must be lifted for those who are fully vaccinated. For tourism to start, travel bubble arrangements between like minded countries can be considered.

We will need to adjust as we learn, making decisions based on latest key data. Nobody can predict the future and making decisions on hindsight is one step too slow.

We still have three weeks to observe the British experiment, crucial insights that can help us plan and make better decisions.

With our present political crisis, there is a possibility that a general election might be called soon.

Can Malaysia handle a general election with national campaigns over the next 90 days? I am confident that our Yang di-Pertuan Agong will make a wise decision to solve this dilemma.

In the meantime, please encourage everyone you know to get vaccinated. The sooner the better for all of us.

Published: https://www.thestar.com.my/business/business-news/2021/08/14/malaysia-must-reopen-soon

5/2021 – It’s all about the cashflow, especially in a pandemic

Unlike any other recession, the current pandemic-induced recession has caused the most pain across many industries and livelihoods of individuals all over the world. Like all recessions, businesses have to reset their priorities and strategies going forward. During the last 12 months, I have met many SMEs facing severe cashflow problems due to losses and reduced revenue.

My first advice is always to regularise cashflow sufficiently to cover monthly operating expenses and bank payments.

Most times, for older companies, they have property assets – land or factory warehouse buildings charged against banking facilities. For the smaller businesses, sometimes they have the house that they stay in being charged to the bank for bank facilities used by the company.

In the old days, every SME’s priority was to own a property when they started making money just because they knew the property would definitely have capital appreciation and they could secure additional banking facilities based on higher revaluation of the property later on. Our local “kiasu” banking system will insist on collateral with every loan application besides tying up your arms and legs in additional protection via personal guarantees. Looks like nothing has changed unless the loans are 80% guaranteed by Credit Guarantee Corp. Different banks have different risk appetite for SME loans.

As an SME operator, when do you decide whether you should buy a property? That will depend on your spare positive cashflow and your intention or purpose of the investment.

If it is for own business use it is ok.

If you are a trading company and you buy houses and apartments for investment using company funds, then the stretch on your cashflow will come back to bite you later when your business is not doing well. In such cases, it is better to dividend out the profits to shareholders and let the shareholders invest in their personal capacity.

SMEs must be disciplined in their financial management of the company. If you cannot afford it, have a smaller office. No harm in staying humble. Capex should only be on necessary investments that contribute towards revenue and the bottom line. In that way, the core business will enjoy sustainable growth. Investment in non-core assets that do not contribute positively to revenue growth of the core business should be avoided.

All these problems will surface when SMEs face a recession.

So, what do you do in a very weak property market when your assets have to be sold at a much lower valuation? Sometimes the final selling price is not sufficient to cover all the multiple loans that you have charged to the banks. Troubled SMEs have a few options available depending on individual company state of affairs.

Reach out to external equity. If your business is still viable but extremely short on cashflow, look for external investors. Be prepared to give up part of your shareholding. General rule of thumb – the major shareholder looks after financing of working capital. If the external investor takes a majority position, then let him finance the business and you can discharge your property from the bank.

If your business is still viable and the sale of property will provide you with additional cashflow and reduce the payment of bank interest, then do it. I am assuming you want to keep the company to yourself.

If your business is not viable and you are not able to get an external investor, sell your property, clear all bank loans and suppliers debt and close the company. No point using good money to chase after bad money. You will dig a bigger hole than what it is now.

During a crisis, it is critical to think with less emotion and stop being sentimental. Pay attention to the numbers and the cashflow required. Don’t forget this year is going to be another tough year. The pandemic will not go away this year or the next.

It is difficult to see your business which you built over the last twenty years face a difficult crossroads at this moment. But if your business has been facing difficulties pre-pandemic, then you have ignored the earlier stress signals. No excuse and no way you can blame the pandemic for the difficult situation that you are in now. The pandemic merely accelerated the declining performance of your company.

What I notice to be quite common among matured SME owners is the sentimental attachment they have for the business that they have grown accustomed to. While the external conditions and the industry have changed, they continue to operate in the same manner that they have been doing for the past twenty years. With disruptions coming in thick and fast, they simply do not stand a chance in this current market dynamics at play. What they don’t understand they ignore.

For the young entrepreneurs, you will travel the same journey as what the old entrepreneurs have gone through. You will experience rapid growth in the early years and have some good profitable years. Then you start feeling confident to purchase your own property. The you start having bigger dreams of investing into more properties, thinking that you can make more money from such investments.

Do be careful with your cashflow planning especially when paying more for interest on higher debt. Just remember the monthly principal instalments will reduce your cashflow needed for your core business. Rental revenue is never steady nor sufficient in an over supplied property market. Only invest when you have spare cash not needed by your core business..

It is not foolish to run your business on an asset light strategy until you have accumulated sufficient profit reserves. Focus on the core business and do it well. Never count the chickens before they are hatched. You might be disappointed if your dreams remain just a dream.

Learn from the mistakes made by old entrepreneurs like me. And trust me, we old geezers have made many many mistakes not because we are not wise. We are just sentimental, that’s all.

Published: https://www.thestar.com.my/business/business-news/2021/04/17/its-all-about-the-cashflow-especially-in-a-pandemic

4/2021 – Giving consumers cheaper alternatives, genuinely

My favourite personal moments in life now seem to be confined within the timeline of 10pm till 3am. Sitting on my balcony chair and having a slow smoking cigar, I have the luxury of time and the quiet of the night to reflect on the happenings of the day and to gather my thoughts on my plans for tomorrow. I write best during these hours, free of interference especially on the need of having a conversation with my wife.

When one has too much free time, the mind wanders freely, picking up on the random issues in life to gripe about, be it daily happenings that affects your life or politics that affects the economy.

The key question on my mind is always about the motive behind the actions and the motivation that drives such actions.

My gripe today is about plastic bags. Yes, it is about the availability of plastic bags to place my purchases when I shop at my favorite supermarket in Bangsar. Earlier this month, this supermarket completely stopped making available plastic bags at the checkout counter in their campaign to save the planet.

When the government made the decision some years back to force consumers to pay 20 cents for a plastic bag (which costs a few cents), supermarkets all over the country rejoiced at the prospect of turning cost into profits besides saving the planet as well. My favorite supermarket introduced recyclable bags which was a great campaign as I see many shoppers especially housewives bringing these bags on their shopping trips.

As I am not a househusband, I would normally go straight to the supermarket from my office to pick up some groceries without any recyclable bags. Consumers are now familiar with the question from the checkout counter cashier: “Do you want to use a plastic bag?” I would normally be glad to pay for the five to 10 plastic bags which incidentally are recycled at home, used in the many small garbage bin receptacles in my house.

In this instance two weeks ago, I was faced with the dilemma of not having the choice of buying plastic bags as the supermarket made the decision to force consumers to use recyclable bags if they want to shop at their supermarket. The cashier pointed out to me the availability of five different designs and sizes of recyclable bags next to her checkout counter, which costs between RM3.80 to RM19.90 per bag.

Being a griping old man and a regular customer to boot, I stood my ground and insisted they provide me with a proper means of carriage for my RM700 worth of vegetables, meat and bottled plastic drinks. They scrambled and found three used cartons from their back room as I was holding up the queue. I had to apologise to the mother and son waiting behind me who incidentally were not aware of this new policy and did not bring any recyclable bags too.

This incident begs the question on the real motives behind the management decision to implement a ‘no plastic bag’ policy in a supermarket. If it is to save the planet, then the consumers should be offered a cheaper alternative (like brown paper bags) to the high priced recyclable bags. Instead, consumers are given fewer choices and at a much higher price too. If their motive is genuine, sell the recyclable bags at a loss or at cost and consider it as a CSR project.

This smacks of profiteering in the name of saving the planet. It looks as if the profit from selling the plastic bags is insufficient to cover their bonuses. I have shopped in Tesco and Sainsbury in London and I had the choice of paying 20 pence for a much sturdier plastic bag. Consumers should not be inconvenienced when they shop at retail stores. Customer service 101. Duh.

It seems I am not the only one griping about motives. In a press conference a few days ago by Industries Unite, which is a coalition of 110 trade associations with 3.3 million business owners, they were griping about the motives behind the recently announced RM10,000 and RM50,000 fine for violation of the SOP guidelines on wearing masks and social distancing.

With a genuine motive of preventing the spread of Covid-19, the government banned inter state travel and implemented tight guidelines on social distancing and family gatherings especially during Chinese New Year. Permission was given to celebrate reunion dinners for family members who stay in the same house. I scratched my head at that one. What next? Seek permission to use the toilet in my house? This is taking the ‘big brother’ watching over you a wee bit teeny too far, I must say.

Anyway, Industries Unite demanded some answers from the government. They questioned the motive behind the high fines set by the government, which is detrimental to business owners who are already suffering from poor business over the past 12 months. Poor communication and poor planning has led to haphazard implementation by enforcement agencies.

They question the legality of the fines, the interpretation of the SOP guidelines by various state agencies and PDRM, and the flawed design of the SOP’s without consulting the business community. This high handed approach is detrimental to the revival of the economy.

Beside the fines, other government agencies like HRDF have asked for increased contribution from the business community despite the fact that most companies are already in ICU fighting for survival. It is tantamount to extracting blood from a dengue patient with a dangerously low blood count of four.

There seems to be a disconnect between the government of the day and the civil service with the business community in the current prevailing state of the failing economy. The government and civil servants tend to forget that their operating expenditure comes from income taxes derived from employment of individuals and corporate profits.

Instead of giving a helping hand to the fallen, they are adding additional cuts and wounds besides the occasional punches and kicks to the businessmen lying on sick beds. Other than ego and sense of power, I failed to understand the real motive behind such flawed decisions.

Get well soon everyone.

Published: https://www.thestar.com.my/business/business-news/2021/03/27/giving-consumers-cheaper-alternatives-genuinely

3/2021 – The Different Meanings of Being Wealthy

Hope you are celebrating Chinese New Year with a happy mood. For those who missed the reunion dinner due to the ban on interstate travels and the 10km restriction, there will always be another reunion dinner next year and the next 60 years.

Chinese tradition and culture have existed for a few thousand years and it will survive minor disruptions by viruses and human bugs.

Chinese culture has the funniest greetings. Everyone from young to old wishes everyone ‘Gong Xi Fa Cai’ which literally means wishing you more wealth. A Happy New Year greeting is not sufficient for a child who finally visits his 80-year-old grandfather after a year of lockdown. The grandfather and his five-year-old granddaughter simultaneously wishes one another Gong Xi Fa Cai as the ang pow crosses hand. No Gong Xi Fa Cai, no ang pow.

When you have 1.45 billion Chinese in China and another 400 million overseas Chinese diaspora wishing one another ‘more wealth’, non-Chinese must think Chinese all over the world only think of being wealthy. Well, you are right.

Wealth have a different meaning for different segments of Chinese society. For the poor, it means improving livelihoods and being financially able to provide education for their children all the way to university. The Chinese people often say that ‘Education is Wealth’ which means that an educated child will amass more wealth in life. More wealth means more success.

For the wealthy Chinese, they only wish for more wealth. The more ang pows they give away, the more wishes of ‘more wealth’ they receive. Which is why the Chinese rich gets richer all the time. The wealthy migrant Chinese, however, do realise that they are not able to take their cash with them when they live in the afterlife. So they become philanthropist, donating to their clans association, helping to build Chinese schools and temples.

The older generation Chinese businessmen were like the Japanese, they looked after their staff for life. My late father worked for Petaling Gardens Bhd (under Ang family then) till past 70 years of age until I asked him to retire. Mr Ang gave him a gratuity payment upon his retirement despite no such retirement plans for staff leaving the company.

Another funny greeting that non-Chinese do not understand is instead of greeting ‘How are you?’ (Ni hao ma) to friends and guest, the older generation, including myself, would ask ‘Ni chi le ma’ as in ‘Have you eaten?’

The main reason for the greeting is to start a conversation but I suspect that in the older generation, food was scarce and it was not unusual for neighbors to share whatever food that was available in their house. As it was impolite and embarrassing for an hungry person to ask, the host will cordially invite you to eat in their house. I find this cultural act of compassion to neighbours and community at large has slowly disappeared among the new generation.

In the 1950’s and 60’s, many Chinese families started sending their children to English type schools. My uneducated mother decided to send me to a missionary school, La Salle PJ, because of the high quality education reputation. She also believed that having an English education will help me find a good job and career, bearing in mind that all the major trading houses were British and Dutch, and English literate graduates were in demand.

She was right. But I am now regretting the decision not to send my children for at least six years of Chinese primary school. The main reason is China has become the biggest consumer market in the world and the lingua franca required is Mandarin. I am lucky that my second daughter in-law is from China. She is proficient in both Mandarin and English, having studied in USA and England. She is now my eyes and ears for everything Mandarin and provides an insight into China culture and norms.

I am now in discussion with my sons and daughter in laws of eventually sending my grandchildren to Chinese primary schools. I am however waiting impatiently and in desperation for the first grandchild to arrive. Sigh. Children don’t listen to their parents like before.

My late brother’s three children attended Chinese schools from Primary One all the way to Form Six (UEC). Their schools fees for attending Hin Hua independent school was RM300 a month which was reduced by half upon application for scholarship.

As the UEC results is not recognised for admission into local universities, his eldest son got a place in Nanyang Technological University, Singapore. Without my knowledge, my brother asked for an interest free education loan of RM6,000 (max) from the Klang Hokkien Association to send his son off to Singapore. Payback was RM500 a month after he started working. Upon his graduation, I immediately paid off the loan in full so that another deserving student have access to an education loan.

Nanyang gave full scholarship to him with the condition that he stayed back in Singapore to work for at least two years. He is now still in Singapore and with a PR status.

In the meantime his two younger siblings failed to achieved the minimum 6A’s out of 9 papers in the UEC exam. So their only choice was to join the local private universities like HELP and Inti. Luckily, they managed to get a PTPTN loan of RM40,000 each to pay for their school fees. As they are now gainfully employed, they have started paying back the loans at RM400 a month over nine years.

For the B40’s, sending their children to even a Chinese independent school is a financial burden, let alone to universities without any scholarship help. My mother had to run a canteen in a construction site to put me through a local university back in 1980. And if I remember correctly, the school fees at Universiti Malaya’s economics faculty was about RM560 per term.

To develop the young generation of tomorrow, a good education from schools is of upmost importance. Chinese parents will choose schools that provide the best education in terms of quality teachers and excellent standards. The poorer families will work harder to provide the best education for their children as best as they can but with the rising cost of education, their struggle is real and sometimes insurmountable. Their children will drop out of school.

As such, there is a real need for the local community associations and the Chinese schools to ensure that no B40 child is left behind and bereft of a quality education due to financial constraints faced by their parents. Yes, there is already financial support for such cases but is it enough? What is needed is to build local community support within and having these support easily accessible.

Consistent with our Chinese culture, parents in distress are normally too embarrassed to ask for help. Association and school staff should adopt a new mindset and new greetings to such parents.

Wo ke yi bang ni ma? Can I help you?

Published: https://www.thestar.com.my/business/business-news/2021/02/20/the-different-meanings-of-being-wealthy

2/2021 – Community Spirit to Overcome Pandemic Recession

In the blink of an eye, I turned 60 last year. I was born in 1960, just three years after Merdeka. I have been a Malaysian citizen from birth whereas my brother, who was born eight years earlier, had to go through a naturalisation process, from a red identity card to blue identity card, to finally a naturalised citizen of Malaysia.

My father went through the same process even though he emigrated from China to Malaya in the 1930s. My mother was born in Jasin, Melaka, in the late 1920s and she too had to go through the process to become a naturalised citizen.

Countries since independence with a young history (less than 500 years) tend to have a vast number of naturalised citizens. The United States, Australia, Singapore and Malaysia are just some of the countries that gain independence from the colonial master at that time, Great Britain.

Citizens by law have sworn allegiance to the country that they live in and they have to abide by the laws of the country. Nobody can force a citizen to leave the country but citizens can make personal choices should they decide to leave and emigrate to another country. Citizens leave because of economic or political reasons, and to escape domestic civil wars.

As a country that embraces democracy, Malaysian citizens above 18 years old have the right to vote. One citizen, one vote. Voting trends in Malaysia since independence have been by race, for example, a Malay candidate for a Malay majority constituency and so forth. If this voting trend continues, we will continue to see the same composition of politicians by race in our Parliament in the future.

Due to slower growth rate and naturalisation policies, the minority Chinese and Indians have, by percentage to population, been on a reducing trajectory – the Chinese from 37% in 1957 to 22% in 2020 and to 18% by 2040. It is inevitable that there will be a diminishing Chinese voice in Parliament. With a diminishing influence in the decision making of government policies, minority communities will face diminishing share of economic and educational opportunities in this country.

What then can the diminishing minority communities do to ensure a fair share of economic and educational opportunities for the next 60 years? As a Malaysian Chinese going into my twilight years, I have no answer to this dilemma. Perhaps the Chinese community, especially the younger generation, would like to start a conversation on this topic.

My only advice is that the conversation tone must be positive and reconciliatory and not confrontational. It must be a win-win strategy, never a zero-sum game. The conversation should be centered on self help within the community if no help is seen coming. The dialogue must be about the Malaysian Chinese investing their loyalty into this country in the hope of a brighter future.

The discussion must focus on helping the poor of all races and to bridge the gap between rich and poor Malaysians. Only then will we have a stable and just society.

Lending a helping hand

Most immigrants from China in the early 1900s were housed, fed and given a job by their clansman upon arriving at the shores of Malaya. They were identified by their village, district, province and by their spoken dialects. As such, in Malaya then and Malaysia until the 1990s, you can still identify the dialects with the trade and concentrated communities of the same province in particular towns.

Till today, the older generation of the same dialects share a special friendship-bond as it was with their forefathers. These individual communities then set up associations by dialect, first in townships and then grew into a national association. Leaders of the association were normally business and academic leaders of the community.

The associations helped their members (mostly uneducated) to deal with government matters, for example land matters, and offered scholarships to bright students as well as financial and welfare assistance to the poor and the elderly. The various associations and the local rich donated to build schools and temples.

Like all associations and societies, sustainability over the long term depends on new membership enrollments. But the younger generation has no interest in joining and now the association’s role in the community is diminishing as well.

How can these associations reinvent themselves to play the community leader role again, especially in this pandemic recession? Offering refuge to their clansman or the poor Chinese community at large like before? Many unemployed families are having reduced or no income and have problems putting food on the the tables and paying rent for a roof over their heads.

Can the association and the immediate community distribute foodstuff to these families like the Foodbank model in the US? These people have no place to turn to. The Chinese community leaders can play a bigger role in protecting the welfare of the Chinese community.

When no help is forthcoming, the leaders must step up, the younger generation must participate and contribute in whatever ways they can to help the community and that no clansman goes hungry and is left behind.

In my next article, I would like to discuss about education and career choices for the new generation of Chinese youth. I would like to start a conversation about our Chinese SMEs who are suffering in silence and in clear desperation of financial assistance. I welcome all positive recommendations and ideas and you can write to thtanthtan@gmail.com.

In the meantime, help your community by buying from your local SMEs and hawkers. Help the elderly and the poor by whatever means possible. Let us build a caring and supportive community.

That will be a good start. One small step towards the next 60-year journey.

Published: https://www.thestar.com.my/business/business-news/2021/02/06/changing-with-the-times