[ Laman Ehwal Semasa ReformIS ]
Date: 19 Aug 1999
Time: 22:50:41
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The MALAYSIAN justice, progress, unity Issue No. 20 – 19 August 1999
Making a virtue out of necessity and greed Necessity is the mother of invention. So it proved to be in the recently announced ‘cancellation’ of plans for the corporatisation and privatisation of health services. Not only was there tremendous public pressure threatening to turn this into a critical election issue, it now turns out that there was also internal dissension among the would-be beneficiaries and an uncertainty over how to divide up the plum in the pudding, namely the financing scheme for a privatised health system. Thus, out of necessity, came the invention of the ‘cancellation’ and of the false assertion that there had never been any plans, just the false accusations of the opposition. The facts are otherwise. What we have been unable to uncover, without access to ‘oh-so-secret’ government documents, is sufficient to show that there were indeed plans, and the first few steps towards implementation of those plans had been taken. The corporatisation and subsequent privatisation was to have taken place in stages, with the first phase, covering the five major hospitals of Penang, Ipoh, Kuala Lumpur, Seremban and Johor Baru, to have been implemented on 1 January 2000. As reported in these pages, state directors of health had been assembled for a briefing and meeting in April 1999. Moreover, at least in Seremban and Ipoh, certain levels of staff had been briefed and some had even been given option papers. So much for the JE that wasn’t health minister’s denials -- but then, he’s a master of the art of denial and cover-up. This first phase was to have been divided up according to the zones for the earlier privatisation of hospital support services, and to the same beneficiaries, in this instance, Tongkah, Faber and another company in which a prominent MCA minister has an interest. Tongkah is Mokhzani Mahathir’s flagship, while Faber is in the Renong family. But therein lay the source of the dissension. The seeds of the internal dissension which led to the need to abort implementation -- made more pressing by the impending elections and the widespread opposition -- were sown in 1996 in the privatisation of hospital support services and the pharmaceutical stores. The country was then divided up into five zones -- northern, central, southern, sarawak and sabah -- and the hospital support services were privatised to three or four companies, with the northern zone to Faber and the southern to Tongkah. However, the government pharmaceutical stores for the whole country was privatised to UEM subsidiary Remedi for 15 years with an option of a 10-year extension. Remedi not only had the pharmaceutical and medical supplies privatisation for the whole country, it had also gone ahead in partnership with an American company, forming Specialty Medical Laboratories, to set up a diagnostic service which was to take over some of the diagnostic services currently undertaken by the Institute of Medical Research (IMR). The hospital corporatisation and privatisation plan ran slam-bang into Remedi. Once corporatised and privatised, there was no way to ensure that the new managers and owners would continue to take their pharmaceutical and medical supplies from Remedi. So, Remedi reportedly demanded compensation from the government! It appears Faber-Mediserve wasn’t the problem; after all, Faber is within the Renong stable. The problem was Tongkah, which has its own ambitions in the health service business, mostly under Pantai Holdings. Finally, there was yet another problem: the arrangements for the insurance scheme. Who was to get it? It is believed that this is really where the biggest money is, and in these times of scarcity, you can be sure there was quite a bit of a scramble for this ‘jewel in the health services crown’. Given all these ‘problems’ and the public outcry, necessity gave way to invention, while re-engineering of the plan goes on behind the scenes. ***** With a little help from their foreign friends? Last Thursday, the announcement of Morgan Stanley Capital International (MSCI) that they would consider re-listing of the KL Stock Exchange on its index for emerging economies in February 2000 provided there was no back-tracking on liberalisation was greeted with barely disguised glee by BN Ministers. Even then, some analysts were wondering why the MSCI, normally known for its reticence, made such an announcement so far ahead of time, and not in November or December. Some of them suggested that perhaps it was meant to serve as the carrot to keep the BN government in line. Contrary to the cocky claims of Dr Mahathir and friends, they have long been susceptible to foreign pressure, in this instance of portfolio fund managers which, by their very nature, are necessarily short-term, if not ‘hot’. No one, however, ventured the view that it could possibly be political -- a little assistance to Dr M and the BN in their hour of need? Of course, if anyone should have dared voice such a thought, the BN Ministers would have been more than quick to lash out. So perish the thought -- how could anyone imagine Dr M and the BN being favoured by these foreigners; after all, surely it is the opposition who are the stooges of these foreigners? Now, however, no less than the present host of Dr M has voiced its outrage at MSCI, a host whom Dr M has seen fit to praise and to hold up as a true friend, to the point of even supporting devaluation of the yuan, a devaluation which most people believe will hurt us and our neighbours. Beijing,Taipei and the MSCI Beijing is reportedly “angry” with US investment bank Morgan Stanley Dean Witter for MSCI’s increased weighting of Taiwan, questioning the timing of the announcement at this particular time when there are serious problems between Beijing and Taipei. Morgan Stanley Dean Witter denied having any influence on the decision for the re-weighting. The announcement of the re-weighting sent the island’s dollar and stock prices soaring, with the Taiwan dollar now at a 17-month high to the US dollar. Until the announcement, Taiwan's stock market had been in a tailspin since President Lee said on July 9 that the island's relations with the mainland were “state to state”, provoking reactions from Beijing which regards Taiwan as a renegade province. The South China Morning Post, Tuesday, quoted one Beijing source as saying, “We don't understand it at all. We are particularly puzzled by the timing of the announcement. Why should they increase Taiwan's weighting when cross-straits relationships are at their worst?” John Fildes, an executive director of MSCI Asia, said the reweightings were due to several months of analysis by its staff in Geneva, and political risk was not a key factor. But he declined to comment on the timing of the announcement. This is not the first time Morgan Stanley has run foul of mainland authorities. In October 1997, just before China Telecom's flotation on the Hongkong market, Morgan Stanley global strategist Barton Biggs cut Hongkong’s weightings to zero, causing share prices to plunge. This provoked sharp responses from mainland officials including Wang Qishan, then governor of the China Construction Bank. Food for thought, huh?
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