By M. Bakri Musa | August 5th, 2012
www.bakrimusa.com

With great fanfare, Prime Minister Najib Razak recently announced the mega property development, The Tun Razak Exchange (TRX). The project would symbolize the nation’s aspiration to be “the leading global centre for international finance, trade and services.”

Najib wants that to be his legacy. Even if successful (and a very big if), it would simply be a physical monument, in the same manner that Petronas Towers is to Mahathir. The only thing Malaysian or Malay about that much-hyped tower is the land on which it is sited. Everything else – from the design, engineering and construction – was done by foreigners. The only work done by a Malaysian (or Malay) was the ribbon cutting at the glittering opening ceremony.

The legacy of Tun Razak the father is his imaginative rural development schemes, like the massive FELDA program that benefited millions of poor landless rural dwellers. The beneficiaries, let it be explicitly stated in case this fact is missed, are mostly if not exclusively Malays.

For Najib the son however, if TRX were to be successful, it would benefit leading global companies with their highly skilled and generously paid workers. Those “knowledge workers” will most likely be expatriates, and if Malaysians, only those highly educated and proficient in the language of international finance – English. Again, let it be said in case this fact too is missed, they will be mostly non-Malays.

What an irony for a former UMNO Youth leader who once threatened to “bathe the keris with Chinese blood!” Quite a transformation!

Veering off the race angle, it will take more than grandiose skyscrapers to be a leading financial center and to attract global companies. I would have much greater confidence in TRX’s success if the government were to simultaneously announce a comparable mega program to upgrade our universities (especially their economics and statistics departments as well as our business schools) so the nation would have the necessary brains to go with the brawns. Thus far only one of the nation’s business schools (UPM) has international accreditation.

This mega billion TRX, as with the recent Initial Public Offering of the massive FELDA Global Ventures (FGV), is orchestrated by the Prime Minister’s Department. Najib Razak is now more property developer and investment banker when he should be the leader of all Malaysians and the nation’s chief executive. There is no shortage of critical problems facing Malaysia. If he needs any reminding, there are our crippling corruption, rotten education system, and our deeply polarized citizenry. There are many others.

Property development and investment banking are highly lucrative pursuits; I have no problem with either. If Najib wishes to pursue both or either, he should join his brother in the private sector and quit being Prime Minister. The awesome responsibilities of that high office are very different and much broader, not least of which is to help those who need it most, like those poor landless villagers, not global corporations or the highly educated. They can take care of themselves, thank you very much.

The Cart Before the Bullock

On launching TRX Najib declared, “The Government will go out of its way to ensure that the exchange is a success and, as a first step, I can announce to you today that we will begin a comprehensive review of business regulations.”

“Our logic behind this review is simple,” he continued, “anything that contributes to future progress stays, anything that is outdated goes.”

Well and good! I wish he had done that first. That would also be less expensive. Businesses and investors are less attracted by fancy buildings, high rents and generous incentives, more with ease of starting a venture, availability of talents, and most of all the prospects of healthy profits. Have them and businesses as well as investors from all over will pour in. They will then build their own mega headquarters.

Of course the grueling work of modernizing the nation’s business regulations and enhancing the investment climate or modernizing our schools and universities, is not as sexy or attracts media attention as much as unveiling glossy models of skyscrapers. In the long run however, the former would prove more effective and enduring.

Singapore did not become a major financial center because of its gleaming skyscrapers. Those were the result of the republic becoming a successful financial center.

I would also have a much greater confidence of TRX’s success if at its launching Najib were to announce securing a major anchor tenant or two (other than a GLC of course), even if only with a letter of intent with oodles of wiggle clauses.

My worst fear is this. TRX may well prove successful, with all the major financial houses having their regional or even global headquarters there. However, the only Malays you would see at the upper and middle echelon would the “non-executive” chairmen, directors of “government relations,” and public relations directors. There will be other Malays of course, as security guards. The highly-paid “knowledge workers” would be mostly non-Malays, thanks to our rotten national schools and public universities. Even the janitorial jobs would be taken by the Benglas! That would be Najib’s legacy as property developer.

Yes, that would be an improvement over the Petronas Towers project, but by not much.

Consider Najib the investment banker. His latest IPO, FGV, is by all measures wildly successful. It was the largest globally after Facebook, and unlike it, FGV’s stocks soared.

For a dose of reality however, visit the typical FELDA plantation and settlement. The standard of living and lifestyle of those settlers are no better from that of their parents and grandparents. Their roads are still unpaved and they still lack electricity and potable water. On the plantations, those palm nuts, the ultimate source of FGV riches, are still harvested in the same manual and inefficient method as they were half a century ago, with the nuts carried over the workers’ shoulders. There are no trucks with hydraulic lifts to help the workers harvest the nuts, no conveyor belts to load those nuts onto the trucks.

Equity markets and stock exchanges are alien to these settlers. Their more immediate problem is to feed and clothe their families. To them, TRX would prove to be nothing more than those expensive boondoggle tricks that Najib continues to perpetrate on his people, especially Malays. Yet we continue to be mesmerized by and pin our hopes on him and his grandiose projects. When will we wake up?