Discover more from The Coffee Break
☕️ National Service 3.0 to be revived, military-focused
MACC uncovered RM100 mil rice fraud in Kedah. LCS Project Scandal - where taxpayers’ money is now. National Haze Season - the best plants to purify indoor air naturally.
1. MARKET SUMMARY 📈
2. NUMBERS AT A GLANCE 🔢
Today’s special: GEG Bill
A study by research firm Oxford Economics indicates that Malaysia's Generational Endgame (GEG) bill may lead to potential losses of up to RM346 mil in gross domestic product (GDP) contributions by 2040. Additionally, the implementation of GEG could result in the loss of over 2,700 jobs in the formal economy and an additional RM1.2 bil in annual tax revenue leakage due to illicit trade by 2040. An additional 1.2 bil illicit cigarettes could enter the market each year by 2030.
However, let’s not forget about the flip side — savings from healthcare and healthier citizens as a whole. The medical cost of smoking and vaping-related diseases, such as coronary disease, lung cancer, and chronic lung diseases, was RM6.21 bil in 2020. By 2030, it is expected to increase to RM8.77 bil. On a net basis (and if were to include hidden costs), we are way better off with GEG.
The emergence of a new disease known as EVALI (e-cigarette, or vaping, product use associated lung injury) — has an average ward admission of 12 days, which costs an estimated RM150,892.11.
Why is the GEG important? The Control of Smoking Product for Public Health Bill 2023, which includes the generational endgame smoking ban provision, which was supposed to be tabled for a second reading today, has been postponed.
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3. IN MALAYSIA 🇲🇾
Parliament is back to action for the third meeting of the second session of the 15th Parliament. The Parliament will sit over 32 days from Oct 9 to Nov 30. Looking forward to the mature and intellectual debates amongst our elected representatives!
PBB proposes increased parliamentary constituencies in Sarawak
The political party Parti Pesaka Bumiputera Bersatu (PBB) is working on a proposal to increase the number of parliamentary seats in Sarawak. This is being done to give Sarawak more representation in the national government, as agreed upon in the Malaysia Agreement of 1963, where Sabah and Sarawak will get one-third of the parliamentary seat composition. PBB aims to create three new parliamentary seats, not just in one area but across the whole state. This move follows recommendations from a committee report that stressed the importance of Sarawak's voice in the national parliament.
Tabling of Anti-Smoking GEG bill delayed in parliament
The Control of Smoking Products for Public Health Bill 2023, often called the Generational End-Game (GEG) Bill, won't be presented for its second reading in the Malaysian Parliament on October 10 (today) as initially planned. The Health Ministry postponed it to give priority to other government matters. They still intend to introduce this bill in the future to address issues surrounding the regulation of smoking products, including e-cigarettes and vaping. Sources suggest that the delay is also related to discussions about the budget for 2024 and related issues. The Health Minister had previously mentioned that the bill would be tabled following Cabinet approval.
MACC uncovered RM100 mil rice fraud in Kedah
The Malaysian Anti-Corruption Commission (MACC) has discovered fraudulent actions committed by a rice supply company in Kedah that have caused disruption in the distribution and selling of Malaysia’s primary food source. According to a source, the company obtained a contract from a state-owned agricultural company to provide RM100 mil worth of rice — 28,000 tonnes — annually in Peninsular Malaysia. The source said that based on the contract, signed seven years ago, the company obtained a bank loan for RM30 mil.
LCS Project Scandal - where taxpayers’ money is now
The PAC’s full report can be viewed here. Some highlights:
A recent report from the Public Accounts Committee (PAC) has revealed that the last of the five vessels in Malaysia's littoral combat ship (LCS) project won't be ready until 2029, even though it was initially expected in 2022. This delay has led to an increase in the project's cost, from RM9.128 bil to RM11.22 bil.
On top of the delay, the report said there had been no progress on the construction of the first ship between Dec 11, 2021 and Jun 10, 2023. The construction cost had ballooned to RM11.22 bil from the initial RM9.128 bil.
One significant concern highlighted in the report is that a key contract, known as SA 6, signed in May 2023, did not receive approval from the Attorney General's Chambers. This oversight could have legal consequences for the government, as noted by the PAC.
National Service is making a comeback
Malaysia's National Service Training Program (PLKN) 3.0 is making a comeback, featuring a new training approach where youth will undergo military-style training at army camps. Defence Minister Datuk Seri Mohamad Hasan shared this plan, explaining that PLKN 3.0 will be conducted in two phases, starting with Form Four students and then transitioning to a military-focused program. The goal is to equip young participants with strong character and a deep love for their country, preparing them for future employment in essential government agencies. This change aims to reduce costs significantly, with annual spending dropping from RM500 mil to RM100 mil. Approval from the National Security Council is pending before PLKN 3.0 begins.
Catcha Digital Bhd’s subsidiary, iMedia Asia Sdn Bhd, is looking to purchase equity stakes in two companies in order to enhance the group's profitability. The group will purchase the remaining 49% equity interest in Ittify Sdn Bhd, an influencer platform in Malaysia, for RM3.43 mil. This acquisition will be completed in two tranches over two years. Additionally, Catcha Digital will acquire a 30% equity interest in Headline Media Sdn Bhd for RM1.24 mil, also in two tranches over two years, with an option to acquire an additional 50% equity interest within 36 months.
Malaysia's Investment Development Authority (Mida) has introduced funding initiatives to support industrial growth in Malaysia. These include the Domestic Investment Accelerator Fund (DIAF) and the Madani Smart Automation Grant (SAG Madani), which aim to aid local manufacturers and service providers in upgrading capabilities and embracing innovation, automation, and digitalisation.
MIDA's CEO, Datuk Wira Arham Abdul Rahman, said these funds will help local businesses grow and be more competitive globally. The Minister of Investment, Trade, and Industry, Tengku Datuk Seri Zafrul Abdul Aziz, believes this will make Malaysia a leader in global industries by 2030.
4. AROUND THE WORLD 🌎
Nobel Prize for Economics goes to an economist who researched the gender pay gap
Harvard economist Claudia Goldin has been awarded the Nobel Laureate in Economics Sciences for her work examining the gender pay gap. Goldin is just the third woman to be awarded the Nobel Prize in economics, which has the fewest number of female laureates, though the award in this category was created in 1968, more than 60 years after the first Nobel Prize was awarded in 1901. She is the first woman to win the award without having to share it with a male colleague.
Goldin’s is the first comprehensive research into women’s earnings and labour market participation, having examined data covering 200 years of women’s participation in the workforce in the US. Her research showed that women are paid less than men on average despite having higher education levels, and most of the gap largely arises with the birth of the first child. Learn more about Goldin and her research here.
Israel announced total blockade on Gaza
Israel’s defence minister Yoay Gallant has announced a “complete siege” of the Gaza Strip, banning electricity, food, fuel and water. Israel already exerted considerable control over Gaza through a 16-year blockade at 2 of the border crossings (the third controlled by Egypt) to restrict the flow of goods and movement of people ever since Hamas (designated terrorist by the West) took control over the territory in 2007.
The Gaza Strip, at just 41 km long and 10 km wide, is home to 2.3 mil people and has been considered one of the most densely populated areas in the world due to the blockade. Some considered it the biggest open-air prison in the world. How harsh is life in the Gaza Strip? With unemployment close to 50%, 4 hours of electricity a day, 98% of groundwater is undrinkable — the Gaza Strip is a man-made living hell.
Thailand’s foreign ministry said that 12 Thai nationals were killed in Israel plus 11 more kidnapped and eight injured in the attacks. About 30,000 Thai nationals work in Israel, and about 1,400 have signed up to be evacuated.
Read: Gaza: Israel’s ‘Open-Air’ Prison
Coldplay vs former manager
Coldplay and their former manager of 17 years (2005 - 2022) have countersued each other in London. Dave Holmes sued for GBP10 mil in unpaid commission and the British rock band countersued GBP14 mil in damages as Holmes had allowed tour costs to spiral out of control. Some interesting highlights:
Holmes claimed Coldplay owed him commission on two as-yet-unreleased albums. The band were paid an advance of GBP35 mil for their 10th album and GBP30 mil for their 11th and 12th albums. Holmes claimed he had done the work (i.e. organising recording sessions) before his contract was not renewed.
For the band’s previous two albums, Everyday Life (2019) and Music of the Spheres (2021), Holmes said he was paid between 8% - 13% commission (seems like a lucrative gig to be a band manager!).
Coldplay counterclaimed that Holmes spent GBP8 mil on a video screen that was so big it could not be brought on tour and was only used for 10 performances in Buenos Aires. Another 16 bespoke stage pylons were bought at GBP10.6 mil, only to be unusable.
Meta announced last month its AI chatbot, featuring celebrities' likenesses, including Kendall Jenner and MrBeast. Now we know how much they are paid. Starting from USD1 mil and up to USD5 mil for the bigger names. Total work involved - 6 hours, over two years of studio work.
The Michelin Guide announced it will start rating hotels in the same way as it does with restaurants. The initial selection will include 5,300 hotels across 120 countries and the best due to receive their awards in the first half of 2024.
Two interesting reads on the Michelin Guide:
5. FOR YOUR EYES 📺
Today’s content is dedicated to our air in conjunction with the National Haze Season.
Using plants to naturally remove harmful chemicals from the air, is proven by science. The best one? Snake plant (aka mother-in-law’s tongue plant).
If we release so much CO2 into the air, can we just not capture it back and store it? Carbon capture technology explained.