My last trip to Malaysia was a brief overnight stop in Kuala Lumpur in January 2020. Then, I met up with an old university friend, Tony Pua, known to some for listing Cyber Village on the Singapore Exchange’s (SGX) then-Sesdaq back in 2001, before selling his interests in 2007 to focus on politics as a Democratic Action Party (DAP) member.
Over supper, we discussed the rumour going around at that time, that Dr Mahathir Mohamad would hand over the reins as prime minister to his once-again deputy Anwar Ibrahim after Apec Malaysia 2020 concluded that November. With a straight face, Pua, who had just won his Damansara seat in the 2018 General Election (GE14) with a record 107,000 majority, quipped that all the component parties of Pakatan Harapan (PH) coalition were kicking off processes within their parties towards this end.
The following day, over a vegetarian lunch with a Malaysian Tan Sri who has been close to Dr M for decades, the same subject came up. The Tan Sri, who may list his healthcare interests on the SGX next year, rued that Singaporeans do not understand Malaysian politics. His considered response to Anwar taking over from Dr M was “plan, always must have plan — but plan can change”; he “joked” by speculating what if the scenario was different and Anwar might have to respond within a month to charges in a repeat of 1998.
Of course, those charges did not happen. Instead, within a month, the “Sheraton Move” took place and the PH government collapsed, resulting in a new coalition led by then-Prime Minister Muhyiddin Yassin barely hanging on following the 2022 GE, where in an unprecedented move, the Royals had to step in to resolve a hung Parliament.
Anwar, uniting with his old enemy Umno, and the minority race-based parties long in opposition to the former Umno-led Barisan Nasional (BN) government since independence until GE14 in 2018, finally became the Prime Minister.
The first electoral test for the new Unity government will take place on Aug 8. Six state assemblies have been dissolved: Kedah, Kelantan, Penang, Selangor, Negeri Sembilan and Terengganu — where last week, I spent some time with the turtle conservationists from World Wide Fund for Nature (WWF).
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Along the way, I saw the green flags of the Parti Islam Se-Malaysia (PAS), a component party of the PN, dominating every traffic intersection, outside state buildings and along the highway of the state where the Chinese population is just around 10% — unless PAS miraculously switches sides again back to 2015 where they were united under Pakatan Rakyat with Anwar’s Parti Keadilan Rakyat and DAP. Just like the golden sands of Terengganu that are in constant motion, Malaysian politics is marked by constantly shifting of coalitions, but unless the results turn turtle, so to speak, it would appear that the state will remain in opposition.
Winner’s curse
Apart from the dedicated WWF team, my travelling companions consisted of a few current and former fund managers and their spouses. Besides managing billions in family office, foundation and third-party monies, they are all supporters of the work of protecting endangered species, and biodiversity as well.
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One of them, a Chinese gentleman, was born in Terengganu. His father passed away early and he was forced to work as a teenager in order to feed the family while juggling his studies. He made it through amid tumultuous events such as the May 1969 riots, where he was lucky to be told by local Malay policemen to go home, which was basically a “shack” just a short walk behind the beach where leatherback turtles used to go to nest a generation ago.
Our former Terengganu boy has come a long way. He first made it to Kuala Lumpur, and eventually Singapore, climbing ever higher in his career — first as an employee, then managing his own fund house. Along with others who have similarly made good, their names adorn the newly-built hall of their former school, which also boasts a swimming pool built with their generous funding. In Singapore, his adopted country, he has steadfastly continued with his philanthropic activities, especially with his low-key support of many “silent” causes.
This trip, made possible by his kind invitation, was further enlivened by our fill of delicious Malaysian delicacies like laksam, nasi dagang, yong tao hu and durians at a fraction of the prices we are accustomed to in Singapore. That the SGD/MYR exchange rate hovers close to 3.50 already makes Johor and Kuala Lumpur cheap. In this PAS-led backwater, or even Najib Razak’s Kuantan, Pahang, it is incredible how far the SGD goes. All the more a pity considering that from natural resources, a substantial portion of the revenue collected by the Malaysian government came from Petronas, which in turn, leans on Terengganu for a substantial portion of its production. Yet it remains one of the poorest states in the Federation.
Perhaps it is a classic example of the “resource curse” theory applicable across many countries, where mineral and fuel abundance perversely leads to negative developmental outcomes, including anaemic growth, high levels of corruption and ineffective governance. Norway is the notable exception, whose sovereign wealth fund was established more than three decades ago in anticipation of its oil running out.
Terengganu is relatively resource-rich and compares with Penang or Melaka which boasts other developed industries. Every time I drive through Malaysia, I marvel at the natural resources across the peninsula or in East Malaysia, and land and plantations dotted with the Sime Darby, KL Kepong or Wilmar factories. However, since the Separation in 1965, it has been turtles all the way for the MYR versus the SGD.
With economic value shifting from commodities in the 19th and early 20th centuries towards industry and manufacturing, then services including finance, and perhaps the metaverse in future, Malaysia has relatively declined versus its Asean neighbours, despite grand projects like car manufacturing, and Vision 2020, which called for industrialisation self-sufficiency by the said year.
Fortunately for Singapore, forced to shift into higher-value production because of costs, we have managed to stay ahead because of ease of doing business and better governance and government. When Tanjung Pelepas was positioned for head-on competition, it caused some real worries. But two decades on, the volume handled is still a third of PSA’s. As a travelling companion remarked, we can “pray” for development or make our own luck.
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If managed well, the latent potential of Malaysia and its listed companies is huge, especially with commodity prices elevated post-Covid. With seven times the population of Singapore and a land mass 460 times as big, its only impediment is often itself. As an economic hinterland for Singapore, it makes a lot of sense in combination — only if politics does not get in the way. One hopes projects to increase connectivity between the neighbouring countries will be implemented smoothly.
On July 11, Malaysia issued a request for proposal for the Singapore-KL high speed rail project in an attempt to revive this much-talked-about project. This project, if really manifested, will bring connectivity between the two countries to a new level.
Also hopefully, a more stable government, that is without the corruption seen with the 1MDB saga, will prevail. That said, the ordinary folks we encountered continue to wish for their politicians to govern rather than just politick. Businessmen appear to continue to head south with their capital, wealth, and once again capital-market activities, given the uncertain political environment. Local deals that have stalled since the Sheraton Move have not recovered post GE15. State-owned companies are looking to sell assets or float them in IPOs abroad to raise foreign capital. For now, I am tempted to return to eat and shop, but continue to find no reason to invest in Malaysian stocks or property or ringgit-denominated assets.
Turtle trading
Some will argue that it is the lack of development along the East Coast of Peninsular Malaysia that helps keep part of the environment intact. Sadly, the ironic lack of enforcement on pollution and protection, and opportunity for many poor village communities, is precisely the reason why the giant leatherback turtles are functionally extinct in one generation. From 10,000 nests per year in the 1960s (each producing an average of 100 eggs), there were 200 in the early 1990s. They have all but expired with locals poaching the eggs, or with tourists sitting on the poor turtles laying eggs, taking photos of the “tears” as they lay eggs using flash lighting, which could blind them.
The few non-governmental organisations including WWF today work to educate and establish local community co-op businesses, and employ former poachers to be rangers (on RM1,500 or $438 per month contracts) and to help in the extraction, incubation and harvesting of critically endangered green turtle eggs. The ever-changing coalitions of governments do not help in enacting and implementing public policy, although fortunately, the Royals have been more consistent sponsors of protecting biodiversity and habitats of late.
Back in Singapore last week, the Sustainability Reporting Advisory Committee spearheaded by the Accounting and Corporate Regulatory Authority, SGX Regco, leading asset managers, the Big Four accountancy firms, academics, professional bodies and SGListcos (of which I am protem chair), has published recommendations on turning our climate ambition into action.
It sounds like a pain for listed companies, or indeed all businesses small or big, to incorporate such practices and prepare reports. However, what gets measured, gets managed and gets done. It is of course easier to focus on objective measures just on transition to a low-carbon economy, but broader sustainability practices, if incorporated, can potentially deliver the 3Ps of people, planet and profit — as a differentiator in attracting investor capital going forward.
There is no need to be perfect, as Esther An, chair of the committee, highlighted in her LinkedIn post. “The key is to get started and improve over time,” she said. We may not have a lot of time but slowly and steadily, the turtle beats the hare (just like the Singapore market with its consistent returns and an opportunity in July to buy the dips).
Perhaps there remains hope for our neighbour in the north to play a part if we can develop genuine eco-tourism, alongside more sustainable and non-corrupt industrial practices of energy, plantation and forestry industries in Malaysia. If they can at least verify and provide trusted data on protected primary forest reserves to begin with, the more developed Singapore may be able to buy carbon offsets, and with trade, keep the turtles coming to the bay.
Chew Sutat retired from Singapore Exchange after 14 years as a member of its executive management team. During his watch, the exchange transformed from an Asian gateway into a global multi-asset exchange, and he was awarded FOW’s lifetime achievement award. He serves as chairman of the Community Chest Singapore
