Deep Trouble and No One, Absolutely No One, Knows How to Handle the Growing Crisis

by Matthias Chang
Future FastForward, Sunday, 15 June 2008 15:20


No Coherent Policies

Who would have thought that in just over four years, the once resilient, dynamic and determined Malaysia is now floundering and in a state of despair for want of leadership and good governance?
The knee jerk reaction of the Badawi regime to the recent surge in the crude oil price is but the tip of the iceberg and is an indication of the failure by the government to formulate timely policies to meet the challenges that were apparent years ago.
Some of my detractors may accuse me of being overly harsh on Abdullah Badawi as it was not possible to anticipate the surge in crude oil prices and that he is doing what he can at the moment.
This is a blatant lie and a foolish attempt to whitewash the failures and ineptitude of the Badawi regime.
Till to date, the Badawi regime has not formulated a coherent Energy Policy to meet the challenges and demands when Malaysia becomes a net importer of oil. Neither has the regime formulated any policies and strategies to address the current global financial crisis and its impact on Malaysia.
I seek your indulgence to read the following articles which I wrote between early 2003 and late 2004, namely:

1) Peak Oil: The Impending Energy Disaster (June 2003)
2) The Strategic Implications of the 1999 Washington Agreement (March 2004)
3) Horrendous Facts Leaders Need To Know About the US Economy (Nov. 2004)

They are reproduced in the “Malaysia Updates” folder of the website.
The first article was a “Strategic Brief” that I had prepared for the then Prime Minister when I was his Political Secretary. The latter two articles were prepared after my retirement and were also submitted to Tun Dr. Mahathir Mohamad and circulated to my former colleagues as they are supposed to strategise with their political masters.
It was apparent then that within four to five years, energy and the declining dollar would be the critical factors that would demand our utmost attention and that there was an urgent need to prepare Malaysia to meet the inevitable consequences that would ensue post-2nd Iraq War.
I identified eight critical issues and formulated them as follows:

1) The foremost issue and crucial question that needs to be addressed is when would production reach a peak? We go off the tangent, if we ask the wrong question, when are we running out of oil?

2) After peak comes decline. The world’s prosperity has been built on cheap, and what seemed to be abundant oil-based energy. This energy source was and still is the key to industrialization, modern agriculture and transportation, and has impacted even under-developed countries.

3) After achieving peak production, the world has to use less or find efficient and economical substitutes. However, non-conventional oil cannot replace conventional oil as the world’s economy and infrastructure are premised on the supply of cheap conventional oil.

4) Every country will have to make major structural adjustments.

5) There will be an escalation in international tensions and crisis, as countries vie for access to oil, which will become more costly to extract.

6) The US dollar will be under extreme pressures and its supremacy as the world’s reserve currency would be challenged and may even be toppled.

7) The world’s financial system would buckle because of the inevitable escalation in oil prices.

8) Malaysia must immediately assemble a Task Force to address these urgent concerns, and to formulate a New Energy Policy.

But my warnings and exhortations for urgent actions fell on deaf ears as the Badawi regime had as its policy strategists, “the 4th Floor Boys”, a team of inexperienced and immature wannabes whose only qualifications seem to be that they are former university mates and friends of Khairy Jamaluddin, the son-in-law of the Prime Minister. Driven by the lust for power and the opportunity to loot the treasury, the entire government machinery was subverted to fulfill their unbridled ambitions.
An opportunity to avert the crisis was missed and we are now paying the price of that folly!
No task force was established to formulate a new energy policy.
It is with much sadness that I read in the New Straits Times on the 6th June 2008 that the president and chief executive officer of Petronas, Tan Sri Hassan Merican lamented that:
“We are scrapping the barrel. We are bringing up five million or ten million barrels … Gone are the days of 100 million barrels. When you continue to develop the smaller reservoirs, it is costly. When you go further and further away from the shore, it adds to the costs. In addition, the national oil company is going into deep and ultra deep water development and the cost is tremendous”.
Tan Sri Hassan Merican has in those few words described about the crisis of peak oil.
In my third article in late 2004, I sounded this alarm to the Badawi regime:
“The amount of money pumped into the US economy is too much and too soon and is indicative of something drastic that is going to happen. Using past experiences, such injection of liquidity is to halt potential crashes and to fuel post crash recovery.
“Post November elections, it is the considered opinion that the world will wake up to the stark reality that we are in for a very, very bad time.
“Euro has appreciated against the dollar. The oil kingdoms are also diversifying their dollar holdings. The increase in the price of oil, inter-alia is also to offset the depreciation of the dollar. There is therefore a convergence of key factors that indicates that something big and bad is on the horizon.”
It was all apparent in 2003 /2004 but Malaysia did nothing to provide a safety net for her citizens. The Captain was sleeping on his watch. The son-in-law who boasts of having a common first degree from a British university counts for nothing when he and his band of wannabes cannot see beyond their nose!
The Governor of Bank Negara even had the audacity to state in March and as quoted by the New Straits Times that:
“We have done several simulations of different packages which can be implemented in the event of any significant slowdown which we do not see on the horizon at this point in time …”
She must have been in Alice’s Wonderland.
Is it any wonder that we are in a mess?
I cannot see anyone in government who has the skills, experience and more importantly, the confidence to address and resolve these issues other than the former Prime Minister, Tun Dr. Mahathir Mohamad.
This is not my call to him to return to government, but merely an observation that we are in dire straits. For the die-hards of Anwar Ibrahim and Pakatan Rakyat, let me say it loud and clear.
They don’t have the skills, experience and the knowledge in managing the country’s economy. They don’t even have enough human resources to fill all the posts in the Cabinet if they fail in seducing Barisan Nasional leaders to cross over. Those who pinned their hopes on a Pakatan Rakyat government to resolve these very complex issues will be disappointed.
The state of the Union as at June 2008 is dire and as far as I am concerned, and it matters not whether Anwar Ibrahim succeeds in toppling the Badawi regime or Badawi is able somehow to survive the UMNO crisis, Malaysia is fast sliding down the slippery slope to a failed state!
Maybe it is time for a different type of leader to lead and pull the country from the edge of the precipice – a leader who is above party politics, race and religion – to be chosen directly by the people and who is willing to do what is necessary without fear or favour.
I dare not contemplate the consequences in the event that we fail to elect such a leader. For sure, it will be worst than the break up of Yugoslavia!

tunku : a good one from matthias chang.the worst is yet to come, be prepared.i agree with matthias that anwar does not have the skills to run this country.he will be banking on IMF and his jews partners to rule this country if he is the pm.