Brazil's Vale in Malaysia (update 1b): Distribution in 10 days and 35% reduction in carbon emissions per tonne of ore

This is interesting. Vale spends US$1.4 billion in Lumut to build its new Asia port terminal at Teluk Rubiah, Perak in the Straights of Malacca. Valemax 400,000 tonne vessels are just huge! We had neighbours who are engineers from Brazil to help implement this project. Progesys notes that "the stockyard is designed to be able to handle 30m tons of iron ore annually and can be expanded to take a maximum capacity of 60m tons per annum."

Is this akin to what's happening in palm oil merchandising? The likes of Wilmar and Musim Mas have taken strategies to have terminals / bulking / capacity / logistics in key end use regions such as Africa (Wilmar noted to have bought / built / booked up capacities to better serve Africa buyers) and Europe (Musim's biodiesel acquisitions). From key industry sources, it is notable to hear Malaysia earlier had an allocated budget to help build up joint terminal / bulking facilities in strategic locations, but this never got off the ground on apparent commercial disinterest or dissension. Malaysia palm oil is facing stiff competition from Indonesia palm oil. On the latter's upstream expansion, it is inevitable that it gains market share.

16 November 2014: Vale 10 days distribution with major GHG savings, Vale surprise loss, LMT's exclusivity concession compromised

New Strategically Located Deep Water Bulk Ore Handling Terminal and Distribution Hub Opens -
Thirty Million Tonnes per Year Capacity Available for Iron Shipments; 12 November 2014;  "The new facility is a point where the ore can be stored and blended. Located in the Straits of Malacca, distribution of the ore will take a mere ten days, as opposed to the 45 day trip from Brazil allowing a much reduced delivery time for the iron ore to Vale’s clients in Asia and Southeast Asia. Murilo Ferreira, Vale's Chief Executive Officer, said: "Teluk Rubiah is a cornerstone of Vale's business strategy of investing in solutions which aim to enhance the company's capability to supply iron ore more efficiently to the Asian markets. The distribution centre brings our mines closer to our customers in Asia." .. With Teluk Rubiah, Vale will have the opportunity to blend ores with different grades from its production systems, which were always sold on the market separately, each one with different specific features, providing greater flexibility for supplying iron ore. Furthermore, the distribution centre, combined with a fleet of very large ore carriers, represents a more sustainable solution, contributing to a reduction in greenhouse gas emissions for iron ore delivered in Asia. Teluk Rubiah is capable of receiving the somewhat conceitedly named Valemax vessels, which allow for a 35% reduction in carbon emissions per tonne of ore transported. From there, the iron ore is transported in Capesize vessels to its port destinations...." http://www.handyshippingguide.com/shipping-news/new-strategically-located-deep-water-bulk-ore-handling-terminal-and-distribution-hub-opens-_5953

Vale Posts Surprise Loss as Currency Compounds Iron Rout  By Juan Pablo Spinetto   October 30, 2014; "Vale SA (VALE5), the world’s largest iron-ore producer, posted a surprise loss after a weaker Brazilian real boosted dollar-denominated debt and falling commodities prices pushed down sales to the lowest since 2010. Vale swung to a net loss of $1.44 billion, or 28 cents a share, in the third quarter from a profit of $3.5 billion, or 68 cents a share, a year earlier, it said today in a statement. The average of nine analyst estimates compiled by Bloomberg was for profit of 32 cents a share, excluding some items. Shares fell the most in Brazil’s benchmark index today... Iron-ore prices have fallen by more than half since a 2011 peak as Vale, Rio Tinto Group and BHP Billiton Ltd., the three largest producers of the steelmaking raw material, boost supply to gain customers. Results were impacted by $2.68 billion in foreign exchange and monetary losses on debt and derivatives...."
http://www.businessweek.com/news/2014-10-30/vale-posts-surprise-quarterly-loss-on-weaker-real

RAM Ratings reaffirms Lumut Maritime Terminal’s notes Thursday, 13 November 2014
KUALA LUMPUR: RAM Rating Services Bhd has reaffirmed the A1/Stable rating of Lumut Maritime Terminal Sdn Bhd’s (LMT) RM60mil Bai’ Bithaman Ajil Islamic debt securities (2004/2017) (BaIDS). It said on Thursday the rating remains anchored by the continued steady cashflow from LMT’s operations and maintenance agreement with Lekir Bulk Terminal Sdn Bhd (LBT), which at present caters to the coal-unloading requirements of TNB Janamanjung Sdn Bhd.
“The company’s rating is moderated by the dependence of its small port operations primarily on hinterland cargo, keeping a lid on growth potential.  “Meanwhile, revenues from the sale of land in the Lumut Port Industrial Park – which LMT has developed – are expected to taper, given limited land left to be sold, which will somewhat reduce its income diversity,” said the ratings agency. Perak Corporation Bhd, which is listed on the Main Board of Bursa Malaysia, holds a 50% stake plus one share in LMT.... LMT has a 20-year concession agreement (CA) with the Perak Government where it has exclusive port operations within a 30-km radius. However, the agreement ends in July 2015. “It remains to be seen whether the CA will be extended beyond next year, and we note that LMT’s exclusivity had been compromised in 2011 following the State Government’s approval of the establishment of a private jetty in Teluk Rubiah by Vale International SA,” it added.
http://www.thestar.com.my/Business/Business-News/2014/11/13/RAM-Ratings-reaffirms-Lumut-Maritime-Terminal-notes/?style=biz


10 November 2014
  

Brazilian giant seeks to erode its geographic disadvantage in supplying Australian customers as falling iron ore prices hurt producers' margins; UPDATED : Saturday, 08 November, 2014, 5:43am by Bloomberg in Singapore and Rio de Janeiro; "Vale inaugurated a US$1.4 billion port terminal in Malaysia as the world's biggest iron ore producer seeks to cut costs of shipping to Asia from Brazil with prices at five-year lows.... The facility on the Malacca Strait to stock and blend supplies would help Rio de Janeiro-based Vale compete against BHP Billiton and Rio Tinto Group in Australia, said Paul Gait, an analyst at Sanford C Bernstein.... Up to last month, eight Valemax vessels - the biggest ore carriers that can haul as much as 400,000 tonnes - had already called at the Teluk Rubiah site to discharge cargoes, with five smaller Capesizes loaded, Vale said.... "Vale is significantly farther away from the main centres of demand than its Australia competitors," Gait said. "What Vale can do is to lower the apparent cost of logistics, shrink the world, if you will, and make distance not matter so much."... Iron ore tumbled 44 per cent this year as increased supplies from Vale, BHP and Rio created a glut, prompting producers to squeeze costs to preserve margins...."  http://www.scmp.com/business/companies/article/1634648/vale-opens-malaysia-port-lower-logistics-costs

source: http://progesys.ca/project/terminal-teluk-rubiah/

 

source: Teluk Rubiah: Vale of Tears for the “Malaysia Project” By Mariam Mokhtar
March 1, 2012; http://www.ipohecho.com.my/v2/2012/03/01/teluk-rubiah-vale-of-tears-for-the-malaysia-project/

 

About Valemax vessels: http://www.vale.com/EN/aboutvale/initiatives/valemax/pages/default.aspx

 

China's ban on Valemax: http://online.wsj.com/articles/SB10001424127887324595904578116702590372508 ; http://www.lloydslist.com/ll/sector/dry-cargo/article424134.ece

 

About Port Abbott, Northern Queensland: http://www.portstrategy.com/news101/port-operations/cargo-handling/ore-struck

 

Singapore-Johor update: ISEAS Perspective "Iskandar Labours to Develop" by Khor Yu Leng and Vasiliki Mavroeidi

Just to alert you that I have a new update on Iskandar Malaysia, released by the Institute of Southeast Asian Studies. This was co-written with Vasiliki (PhD scholar at Cambridge University), who has been a Research Associate on a bunch of papers and studies.

ISEAS has released an abridged version of our update: http://bit.ly/1DX0Oa4, written by Guest Writers Khor Yu Leng and Vasiliki Mavroeidi and titled “Iskandar Malaysia Labours to Develop”.

Key topics:

• Iskandar Malaysia located in southern Johor is now marketed as the northern adjunct of Singapore and for transboundary living. 40% of investments were in the real estate sector.
• High profile, large-scale property development projects by China-based companies has been the latest phenomenon. Country Gardens is the most noted.
• The role of the Sultan of Johor in business is figuring high.
• Another issues is the recently increased cost of vehicles crossing the border.

Extracts from full report:

Iskandar Malaysia is developing as the de facto northern adjunct of Singapore, in a significant policy supported by the sovereign wealth funds and the administrations of Malaysia and Singapore. Malaysia and international property developers have done much to sell it as a dormitory town to the booming island state. This is amidst Johor’s already key role as a provider of cheaper goods and labour to Singapore, attested by the heavy flow of traffic across the border each day. The Iskandar project, centred on the development of the Medini zone, and with a sprawling territory is in its early rapid build-up stage as infrastructure (including new key road arteries to unblock Johor logistics congestion) and residential estates are being put in place. In this early first phase of implementation, a critical mass of population has yet to come in place. More property is set to come via the ambitious Country Gardens – Johor “Forest City” reclamation project. The current issues surrounding the grand Johor-Singapore project relate to Johor political-business power shifts, nascent stakeholder concerns on their poor inclusion and alienation in it, and concerns about the rising cost of living (housing and transport) of the cross-border lifestyle and the outcome of the property push by China and other developers. Some of these issues will probably see some resolution as the large build of property and cost-effective mass rapid transport roll out in the short and medium term. As Iskandar starts to be populated, investors will likely be playing close attention to property occupancy rates as well as new manufacturing and high-end service investment and jobs creation.

The most vociferous public concerns have come from former Prime Minister Mahathir Mohamad. In his personal blog, he worried the radical changes in the landscape of the “new Johor Bahru” (in Malay: Johor Bahru Baru) would not see Malays from the city or nearby villages occupy the many skyscrapers in the planning. In a jibe at selling out to foreigners, Mahathir noted that Singapore was sold in 1819 to the British for only 60,000 Spanish dollars by the Temenggong (governor acting for the Sultan of Johor) when the island was only inhabited by a few fishermen. He also pointed out that new citizens could become a political force in Johor and affect the balance with ethnic Malay voters. Mahathir cites a Malay proverb that development may come with a hefty price (“Yang penting ialah Malaysia menjadi negara maju walaupun ayam dikepok mati kelaparan dan itik di air mati kehausan”): locals would suffer in their own bountiful land due to the influx of outsiders (Mahathir 2014). In reaction from the political opposition, PAS vice-president Salahuddin Ayub said: “We hope that former prime minister Tun Dr Mahathir Mohamad will give further explanations on the fight to prevent the Iskandar region from being taken over by foreigners,… because it involves the issue of national security which the Iskandar project seem to have threatened” (Malaysia Chronicle, 14 July 2014).

India goes after offshore riches?

Year ago, I spent quite some time in market research for private banks in Singapore. Since then, things have shifted with Switzerland opening up i.e. working with countries seeking information on tax evading money and more held there. There have also been some tax increases on the wealthy. As a result, some shifted their residency / nationality to minimize their tax and estate tax situation. Other tax bolt holes cum private banking centers benefited, but it's expected that they will also be targeted by authorities in the big economies like US, Germany, India and more. What's also interesting is the role of whistle-blowers in the age of technology. At a corporate level, there are also moves by large countries to force change on corporate tax havens such as Ireland. More to come on all this, I guess?


Indian government vows to go after 'black money' stashed in Swiss bank accounts - Prime Minister Narendra Modi to crack down on countless millions of pounds in untaxed transactions by ANDREW BUNCOMBE  Thursday 23 October 2014; "The Indian authorities are trying to recover untold sums of “black money” believed to be stashed away in illicit bank accounts in Switzerland and elsewhere. Prime Minister Narendra Modi’s government has said it will imminently publish a list of names of people holding such accounts.... This week, Mr Modi’s Finance Minister Arun Jaitley raised the stakes higher by saying the government would place the names before the country’s Supreme Court when it reconvenes next week. The court is overseeing its own inquiry into untaxed funds... He appeared to suggest a number of high-profile members of the opposition Congress Party would be included in the list, said to stretch to 136 names. It has been reported that the son-in-law of Congress president Sonia Gandhi, Robert Vadra, may be among those being investigated... Earlier this month, in what was seen as a major breakthrough, the Swiss authorities said they would assist Delhi in its investigation. Switzerland, famous for its banking secrecy and discretion, has for years refused such an arrangement, was concerned that it would damage its reputation.... Switzerland has also raised issues about the way the Indian authorities have obtained the names on the so-called “HSBC list”, saying some of the information may have been stolen by former employees...."
http://www.independent.co.uk/news/world/asia/indian-government-vows-to-go-after-black-money-stashed-in-swiss-bank-accounts-9814278.html

DAP suffers loss at Teluk Intan by-election (update 3): Zairil Dyana decry gutter politics

24 October 2014. A gutter post-script?

 

Intimate ‘photos’ of DAP’s Zairil, Dyana go viral Published: 19 October 2014; "Two DAP politicians have termed photos of themselves allegedly in intimate poses “gutter politics at its lowest”. The alleged pictures of Bukit Bendera MP Zairil Khir Johari and Teluk Intan by-election candidate Dyana Sofya Mohd Daud surfaced this morning and has been making its rounds on social media..." http://www.themalaysianinsider.com/malaysia/article/intimate-photos-of-daps-zairil-dyana-go-viral#sthash.JZF3roQM.dpuf

 

Background:

Zairil Khir Johari: Why I joined DAP By Shazwan Mustafa Kamal Published: 25 January 2011; "Zairil said he chose the DAP because it shared ‘common goals’ with what his late father had looked for in the ‘old’ Umno. — Pictures by Jack OoiKUALA LUMPUR, Jan 25 — A year ago, Zairil Khir Johari’s only association with politics would be his father — the late Tan Sri Mohd Khir Johari, Umno stalwart, former education minister and who served three prime ministers including the late Tunku Abdul Rahman. Over the past few months, however, Zairil’s name has been the talk of the town, namely through opposition blogs as well as anti-Pakatan Rakyat (PR) blogs over his appearance at the coalition’s last convention in Kepala Batas, where he was a guest speaker. His retractors have accused him of being a “traitor” and “anti-Malay” for abandoning his late father’s party and choosing to become a part of the DAP — a party which is still feared by many Malays and considered to be pro-Chinese due to its majority Chinese membership...."  http://www.themalaysianinsider.com/malaysia/article/zairil-khir-johari-why-i-joined-dap#sthash.5dSQVmuQ.dpuf

 

5 June 2014. Interview: Wong Chen on electoral politics in rural Malaysia and Teluk Intan

Q: Teluk Intan; what is your take on the semi-urban and rural voters?

First off, I wasn’t in Teluk Intan for the by-election. So my comments here are mostly based on news and feedback from politicians who were there. I also speak from my experience campaigning in rural Bentong, Pahang. 

I spent a year and half, from 2011 to 2012, working the ground. Bentong is about one hour north of Kuala Lumpur by highway. This is a semi-urban and rural constituency with similar demographics to Teluk Intan, with 47% Chinese voters, 42% Malay voters, 8% Indian voters and 3% Orang Asli voters. It is a large parliamentary seat with four state seats (DUNs) and several FELDA settlements. The bulk of the Chinese are in Bentong town along with a sizeable Malay population of civil servants. In addition there were also a lot of small rural Chinese villages. Indians were mostly living in rubber estates and in towns.
I campaigned everywhere, getting to know the imams, village heads, estate workers, Chinese local tai-kors. I organised friendly football games to get to know the youth in the Felda settlements. This attracted the entire village to come out to watch the game. I also attended weddings and funerals. I like to believe that I got to know the social structure of the place quite well. The first six months was exploratory and I fumbled around, but subsequently the villagers believed that I was there for the long haul and started to welcome my visits..............

Click here for more... http://khoryuleng.blogspot.com/2014/06/interview-wong-chen-on-electoral.html

1 June 2014. I have spoken to several politicians, business people, political analysts and urban voters since my posting last evening (about 10 interviewees, by email, IM and face-to-face). Needless to say the topic is of high interest to many observers and specialists.

 

First of all, to note that the Chinese swing was -15% and Malay swing +3% for DAP at Teluk Intan. Thus, it turns out that both swings were worse than expected, especially the massive Chinese voter negative swing.

 

Some observers felt that the candidate's past Perkasa linkage (via her mother) and less than frank accounting of it was bad on credibility. Others point to the wider situation of the current disarray of the opposition with tussles over redistricting / redelineation and DAP expansionism, PKR party elections tainted by money politics and fraud, various Selangor problems and its Chief Minister Khalid facing credibility issues (over his getting a surprising sweetheart deal from BN in the form of a large loan forgiveness; contrasting heavily with other opposition senior leaders who just get accelerated negative court cases). PAS has been pushing hudud (flirting wth Umno in doing so) and Selangor state Islamic authorities actions have troubled the Christian community etc. One senior Chinese urban voter said that "people are slowly (asking) what is the difference between BN and PR. I guess people's expectation is that PR will take them out from the current BN (ruling style). May not be fair (to expect so much) but people are selfish."

 

Senior political experts who had visited or have knowledge of Teluk Intan felt that not enough had been done on the ground campaigning e.g. not enough posters / presence. It was confirmed that the DAP Perak machinery had not been well engaged - there was a reliance on KL urban volunteers. Some also noted PAS ground campaigning may not be as effective as expected[1].

 

Confusing multiple images of the candidate has also been questioned. Some also ask if the portrayal of Dyana may not have endeared her with women voters in general.

 

 

Note: contrast the two images (the conservative and the "BF shirt" looks).

 

The swing in Chinese voters to BN needs to be examined. Low voter turnout was the result of young people (working in major towns) not returning to vote in Teluk Intan. The 15%-age swing of Chinese votes was thus centered on older voters and is a political earthquake in opposition-land. This is what one observer from the Chinese business sector said: "Chinese voters are pragmatic, not idealistic.  Whoever becomes the MP for this one single constituency will have no national outcomes in the short term. However, voting BN gives immediate economic benefit to the community.PR (opposition coalition) does not understand this... hate or love them, the older Chinese in Malaysia are transient and economic beings. They have no idealism, and to them, freedom only stretches to opportunities to make money."

 

This highlights something else discussed among political specialists - that it made sense for the Chinese voters to send a strong message to the opposition on the issue of hudud and other electability issues at this point of the political cycle (GE 13 was in May 2013). Teluk Intan state representatives are already from the opposition and having a BN MP - promised to join the cabinet - would give them better leverage over both political coalitions and access to BN largesse. 

 

One young Chinese voter (from semi-urban but working in urban) noted his disappointment that the Chinese in Teluk Intan seemed unwilling to accept a young Malay girl; as it shows continued voting based on racial lines. He was not sure if the Chinese in his own semi-urban hometown would accept. Others noted that this was a first test by DAP of their ability in the semi-urban / rural sector with a Malay candidate (but this was not a fair test of DAP, given the negative surprise on their chosen candidate - likely they will have to tighten up a lot on background research).

 

A top political economist said: "This loss is upsetting but not shocking. We need to analyse the high number of spoilt votes and poor turnout. I see this as a rejection or disillusionment with both coalitions. To my mind, a key issue not discussed is the recent hudud controversy. PAS goofed up and this is the consequence - a swing in Chinese votes to the BN; and this possibly explains why the Indian swing to PR didn't happen as expected. I also think Dyana was a poor choice. In rural areas, local politics matter and in such a situation parachute candidates don't work."

 

Bottom-line: At a macro level, while the opposition won the popular vote in GE13, they have been in significant disarray since. They have hardly been operating together as a group of "winners." Instead, narrow interests seem to be prevailing - at party and personal levels. Some voters may be disappointed by the poor likelihood of change they seem to represent: a) being apparently unelectable, b) being "UMNO-light" and/or c) proving no challenge to the power of BN-UMNO incumbency. At a micro level, many question the problems in the political strategy and tactics of Teluk Intan. Looking ahead, a political analyst notes the Teluk Intan result should "trim back DAP hubris... (hopefully) opening room for the opposition coalition to rethink and regroup... with four years to recover for the next general election."

 

Notes:

[1] In my research I've noted that specialists mentioning this. PAS and DAP are considered to have the most effective ground campaigning, but they are too restricted to their own different spheres i.e. DAP to Chinese and PAS to its supporters. It has been harder for them to reach beyond their loyal bases e.g. PAS has noted a particular problem in reaching out to women voters in the rural sector.

 

 

31 May 2014, 11.30pm posting:

 

So the expectations for DAP's Dyana to win Teluk Intan were off base. A decisive win was needed (as always). However, these win expectations were mostly made before the eleventh hour Perkasa-link revelations (Dyana's mother was a "pro-tem" member of Perkasa i.e. to propose its formation and registration). I hear some political analysts had earlier expected a 5% or so swing of Malay voters to benefit DAP, but were unsure of the Chinese vote impact. The outcome of the Chinese vote, was according to DAP a 10%-age swing away. This is a big swing figure.

 

Other than the Perkasa-linkage topic, I am hearing that key local DAP politicians had been disappointed that their preferred local boy aka "Superman" was passed over as a candidate. Thus, did the eleventh hour confusion over the aforementioned topic also affect morale of the electoral ground machine? Also, since the DAP Perak team was reportedly not united, the Teluk Intan strategy and campaign was run by Tony Pua and Ong Kian Ming, sent over from urban KL to this rural seat. They would decide on candidate image, posters etc. There were apparently some questions early on whether Dyana's liberal image would sit well with traditional Malay rural folk.

 

Many questions to be asked from this surprising loss of a seat. I'll keep an eye out and update this posting. The strategy for the Malay semi-urban and rural voters is considered key to the next general election. However, this shows that the Chinese voters should not be taken for granted.

 

Key factors to consider include the following:

• candidate selection
• candidate image
• strategy
• tactics
• operations & logistics

DAP is an ethnically Chinese-dominated political party in the Pakatan Rakyat opposition coalition. It is trying to be more inclusive of Malays, in order to expand its reach to Malay voters. DAP currently has 37 MPs (after the loss of Teluk Intan): 6 Indian, 2 Malay and 29 Chinese. PKR (Anwar Ibrahim's party) has 30 MPs: 4 Indian, 9 Chinese, 1 Kadazan, 16 Malay. PAS has 21 MPs: 21 Malay. 

 

News links:

 

DAP blames Teluk Intan defeat on low turnout, 10pc Chinese swing (VIDEO) May 31, 2014 - See more at: http://www.themalaymailonline.com/malaysia/article/dap-blames-teluk-intan-defeat-on-low-turnout-10pc-chinese-swing#sthash.rCDUuGmf.dpuf; DAP lost Teluk Intan due to a turnout of just 66.7 per cent, lower than the 80 per cent in Election 2013, party secretary-general Lim Guan Eng said today in early assessment of the by-election.... Lim also said there was a Chinese swing of 10 per cent to Barisan Nasional (BN), after unofficial results showed DAP candidate Dyana Sofya Mohd Daud losing to Gerakan president Datuk Mah Siew Keong by 238 votes. “The voter turnout dropped by 14 [percentage points], that’s 7,000 to 8,000 less voters compared to the previous general election,” Lim told a press conference at the DAP operations centre here today. DAP’s Seah Leong Peng had defeated Mah in the 13th general election last year by 7,313 votes. DAP secretary-general Lim said most of those who did not turn up on polling day were the largely pro-opposition outstation voters.... 


...............................
Item below was posted 27 May here, http://khoryuleng.blogspot.com/2014/05/political-news-on-anti-globalisation.html; and I reproduce it here...

Malaysia: Discovery that new young Malay candidate of the DAP (Chinese-controlled party in opposition coalition) has previously, while her mother was involved with Perkasa# helped out at this important ultra-right Malay nationalist group; http://www.themalaymailonline.com/malaysia/article/daps-dyana-admits-helping-mum-with-perkasa-drive. Thus, her apparent swing from Perkasa to DAP is apparently a remarkable political epiphany. Here's an almost advertorial-looking piece on DAP's Dyana Sofya: http://www.malaysia-chronicle.com/index.php?option=com_k2&view=item&id=290171:a-new-political-star-in-malaysia-dyana&Itemid=2#axzz32sMqzfjB with a super slick photo (below) to go with it. The Malaysia media has up till the Perkasa revelation been extremely good to her. Dyana Sofya: From UMNO supporter roots to DAP rising star (2013; Lim Kit Siang's political secretary): http://www.youtube.com/watch?v=8s5AXfXx9t8. She is expected to win and become the new (opposition) MP for Teluk Intan, Perak. 

   

 

#http://en.wikipedia.org/wiki/Perkasa: "Perkasa is a non-governmental Malay supremacy organization that was formed by Ibrahim Ali in the aftermath of the Malaysian general elections in 2008. This conservative, extreme-right, ethnic Malay organisation is led by its president Ibrahim Ali, with Tun Dr. Mahathir Mohamad, the former Prime Minister of Malaysia, as advisor. The group claims to have a membership of 420,000, though outsiders estimate the actual figure to be much lower. There are substantiated allegations that more than 60% of its membership consists of UMNO members." Accessed, 27 May 2014.

Indonesia and Jokowi: greening hopes? (shared)

This posting is shared from Khor Reports Palm Oil Blog, http://khorreports-palmoil.blogspot.sg/2014/09/indonesia-and-jokowi-greening-hopes.html

Indonesia recent moves tightening up on environmental regulations - hefty fines. I'll look for my piece on indigenous land rights and impact on concessions and post up soon.

• Indonesia haze: landmark peat fire fine, ratifies Asean haze agreement (update 1), Tuesday, September 23, 2014, http://khorreports-palmoil.blogspot.sg/2014/09/indonesia-ratifies-asean-
• Landmark Indonesia ruling on peat infractions, January 13, 2014; http://khorreports-palmoil.blogspot.sg/2014/01/landmark-indonesia-ruling-on-peat.html
• Singapore approves anti-haze bill and Jokowi eyes drones to stop land misuse (update 2), August 6, 2014  http://khorreports-palmoil.blogspot.sg/2014/08/singapore-approves-anti-haze-bill-and.html

On Brazil: How Brazil clamped down on deforestation, Friday, July 11, 2014, http://khorreports-palmoil.blogspot.sg/2014/07/how-brazil-clamped-down-on-deforestation.html


Online links:

Jokowi Wins: This Could Turn Out to be the Biggest Climate News of 2014 By Andreas Dahl-Jørgensen and Michael Wolosin, Forests & Lands, Political Strategy; http://www.climateadvisers.com/jokowiwins/:
 
What does Jokowi’s win mean for the world’s climate? The short answer: Possibly a huge deal. Here’s why. ... where is Indonesia heading on deforestation and carbon emissions? There are two diametrically opposed answers to this question... The “glass-half-empty” camp looks at deforestation rates and sees failure. Recent studies have confirmed that the loss of natural forests has dramatically increased in the last couple of years. Deforestation is now higher in Indonesia than in Brazil, in part due to Brazil’s 80% reduction over the last decade – the largest emission reductions anywhere anytime ....The “glass-half-full” view – which we share – looks not only at the disturbing deforestation data, but also takes into account the dramatic systemic changes and leadership that is taking place. Frances Seymour, previously the head of the Center for International Forestry Research and now a senior fellow at the Center for Global Development, has referred to the deal with Norway as the most significant game changer for Indonesia’s forests in the last 25 years....

...Here’s what we see below the surface:
1.Disruptive transparency that “exposes the mess.”... One Map

2.Fundamental land-use reforms. Moratorium. Land swaps?

3.Ending impunity. The President’s special reform unit and the anti-corruption unit (KPK) have embarked on a review of existing concessions and a comprehensive law enforcement campaign. It is following the money, with fines up to $ 9 million and executives being jailed.

4.Indigenous rights.... Landmark court ruling in 2013 Indigenous claims are being included in the government’s One Map initiative.

5.Private sector sea change.... Large and powerful companies have gone from opponents to critical allies of the reformers.

These remarkable developments are reminiscent of the strategies that helped Brazil’s deforestation rate plummet in a way no one thought possible.

The Jokowi Forest Agenda. There are three big reasons forest advocates and observers should be excited about a Jokowi presidency... First, while environmental issues didn’t feature strongly during the campaign, the things he did say were good, even if lacking specifics. (See Loren Bell’s excellent summary here; http://news.mongabay.com/2014/0724-lbell-commentary-jokowi.html) He stated that Indonesia has “pursued economic growth too aggressively and not paid attention to the environment.”...Second, Jokowi agreed to implement the reforms requested by the indigenous peoples’ organization AMAN, including implementing the Constitutional Court decision granting land rights to indigenous peoples. In return Jokowi received AMAN’s endorsement and active campaign support, the first presidential candidate ever to do so.... The third and perhaps most important reason for optimism relates not to his stance on the environment but his vision for good governance and social justice.... His coalition does not hold a majority in parliament, and he may need to learn to play the political game of favors to get things done. Even with the right reforms, deforestation is unlikely to decline immediately given the sheer inertia. But it’s hard to see how one could have asked for a president more aligned with the anti-deforestation agenda than Jokowi....

Scottish Secession? (update 2)

19 September 2014. It's a "NO" for Scottish independence with 55% vote but the political fallout will still be substantial?

Also interesting to note that Glasgow, the largest city in Scotland, voted for "yes."

Scotland votes 'Yes' to a United Kingdom – what's next? 19 September, 2014  by Moneyweek: "The final count showing a 55% 'No' vote to a 45% 'Yes', and on a massive 86% turnout, it was a comfortable win for the union.....However, it would be a mistake to think that this is all over, just because the votes are in and counted. There will be political fallout – potentially quite substantial. And that's something investors at least need to be aware of.  The debate has stirred up a hornets' nest of questions about the way Britain is run, one that had largely gone ignored. The promise of more power for Scotland – even in the event of a 'No' victory – means that Britain's whole political structure is going to need a rethink.  While plenty of 'Yes' voters seem concerned that the UK parliament will back down from 'Devo-Max' promises, that seems unlikely. After all, whatever Alex Salmond said about this being a once-in-a-generation opportunity, he'd easily be able to argue the case for a re-run if anyone reneges on the deal.... And Scotland is already on track to get major new powers. From April 2016, the Scottish government will be able to move income tax rates by up to ten percentage points, for example.  The big risk with that is very similar to the threat posed by an independent Scotland remaining in currency union with the UK. It's the danger of having part of the country with almost total control over revenue-raising and spending powers, and the reassurance of a bigger neighbour to bail it out if it over-reaches itself.  As Melanie Baker of Morgan Stanley put it in the FT, this "might end up having broader implications for the health of the UK's fiscal finances". At a time when we're already very heavily indebted, that's not a pleasant prospect..... Expect a lot more political turmoil ahead...  Meanwhile, we'll move that bit closer to having a separate English parliament. David Cameron has said he plans to address the problem of Scotland-based MPs being able to vote on issues that only affect English voters...."

WSJ says: "...The "No" vote—on a heavy turnout—spared Mr. Cameron, who could have faced calls to resign had Scotland opted to leave. But we note that the Conservative leader's fight is far from over. With a general election looming in May, Mr. Cameron already faces fierce criticism for his handling of the Scottish vote. "There's a sense that Cameron misjudged this vote, took his eye off the ball and was complacent when the details were first hammered out with [Scottish First Minister] Alex Salmond," noted a university politics lecturer. The vote's outcome boosted sterling, lifted stocks and reset market expectations for the path of the country's interest rates, but also left investors with gnawing doubts about the long-term political outlook...."

Early results fall in favour of the union; http://www.theguardian.com/politics/scottish-independence-blog/live/2014/sep/18/scottish-referendum-results-live-coverage-of-the-independence-vote
Blows for Yes camp in Clackmannanshire and Western Isles
• Orkney and Shetland vote strongly in favour of remaining in UK, as forecast
• National turnout anticipated to be around 85%, with some areas topping 90%


18 September 2014. Recent polls and background on Scottish move.

Scotland’s yes campaigners are voting to leave the Titanic - The British state is an imperial behemoth that can only look on in panic as Scots scramble for the lifeboats  by Adam Ramsay, 
theguardian.com, Thursday 18 September 2014 09.00 BST; http://www.theguardian.com/commentisfree/2014/sep/18/scotland-yes-campaign-voting-british-state'
But in the internet age, officials don’t get to write the stories any more. There were always people who had little time for flags, tartanry and shortbread, but who wanted to escape a political system that has made Britain one of Europe’s most unequal counties. And it is these people – a better organised and vastly more powerful version of the Occupy movement – that the Westminster parties and their media partners failed to consider... It’s against this self-organised network that the British state is flagging. Research from Edinburgh University shows that the more information people have, the more likely they are to vote yes. In the face of mass peer-to-peer education, the puffed-up power of elites melts away: polls show most Scots no longer believe what Westminster MPs say. As David Cameron and George Osborne and Ed Miliband huff and puff and woo and cajole the people of Scotland, more and more simply look these politicians up and down, shrug, and say: “You have no power over us any more.” It’s their own fault. Westminster’s parties have made conventional politics so bland that people barely pay attention. To win elections they have got used to flashing simplistic messages in front of our eyes – we don’t notice or care that we’re being patronised. And because they destroyed their pesky grassroots, they failed to spot that the referendum isn’t an election. People are paying attention, are thirsty for information, and don’t take kindly to their leaders treating them like idiots or trying to bully them...  Final poll of Scottish referendum campaign shows six-point lead for no; Ipsos Mori reports slight strengthening of no's lead, with yes voters mainly motivated by hope and no voters by fear... All the leading pollsters have now issued final polls suggesting either a four- or six-point lead for the no campaign, but Labour officials remained cautious, saying it was still unclear how undecided voters would break or what impact a high turnout might have. It is now thought that as few as 200,000 votes could be the difference...Majorities on both sides said they would base their vote more on practical consequences than feelings of national identity. Seven in ten (70%) of yes supporters based their vote more on practical consequences, and 78% of no supporters. Overall, 74% said they would base their vote on practical consequences, with 19% basing theirs more on national identity...  http://www.theguardian.com/politics/2014/sep/18/final-poll-scottish-referendum-campaign

Scotland’s Independence Bid By Rodney Jefferson  | Updated Sept. 18, 2014; Scotland claims credit for inventing the telephone, television and penicillin, not to mention modern economics. Its people built ships, bridges and locomotives for the world and, more recently, Grand Theft Auto. Now many Scots say they deserve to break away from the United Kingdom — and the 307-year-old union with England and Wales — to create Europe’s newest sovereign state. Scottish voters age 16 and over are deciding in a Sept. 18 referendum asking the question: Should Scotland be an independent country?... Scotland is holding the 51st independence referendum worldwide since World War II. The first was Iceland’s break from Danish rule, with the latest creating South Sudan. There was a flurry in the 1990s as countries left the former Soviet Union and Yugoslavia fragmented. So far, 27 of the votes have been in favor of secession, with 23 against. The French-speaking province of Quebec voted to remain part of Canada in 1980 and 1995, though only by a wafer-thin margin the second time. Independence movements are often about ethnic or linguistic splits, but just as frequently they’re about economics. The U.K. was formed by the Act of Union in 1707, as Scotland faced financial ruin after a failed project in Panama.... http://www.bloomberg.com/quicktake/scotlands-independence-bid/

Source: Scottish Government, U.K. Department of Energy & Climate Change  

13 September 2014  Big moves and major news against Scottish independence

Scottish independence, UK RIP? Ditching the union would be a mistake for Scotland and a tragedy for the country it leaves behind; http://www.economist.com/news/leaders/21616957-ditching-union-would-be-mistake-scotland-and-tragedy-country-it-leaves

'I hate England': Tartan-loving fashion designer Vivienne Westwood pins 'Yes' badges on her models (despite the fact she's grown rich in London and hasn't got a Scottish bone in her body)
Read more: http://www.dailymail.co.uk/news/article-2755652/Tartan-loving-designer-Vivienne-Westwood-pledges-support-Yes-campaign-Scottish-independence-slamming-unionists-frightened-stupid.html#ixzz3DMzeeuap

Others on secession and self-determination:

Catalans form human V for Vote to seek choice on split from Spain; http://uk.mobile.reuters.com/article/idUKKBN0H60SG20140912?irpc=932

Democracy in China - The struggle for Hong Kong. The territory’s citizens must not give up demanding full democracy—for their sake and for China’s; Sep 6th 2014;  |http://www.economist.com/news/leaders/21615583-territorys-citizens-must-not-give-up-demanding-full-democracyfor-their-sake-and?spc=scode&spv=xm&ah=9d7f7ab945510a56fa6d37c30b6f1709

11 September: I had a chat yesterday evening with a senior historian for the Malay archipelago (the meet up was triggered in part by my updating on the Johor Iskandar-Singapore project and its historical resonance). As we meandered through different topics, he highlighted to me his interest in the Scottish secession referendum, and how this might trigger Catalonia (Barcelona) which is a rich region in Spain to do similar (wiki: http://en.wikipedia.org/wiki/Catalan_self-determination_referendum); and we also noted that the Crimea is making some noises on the same (news link: http://www.channelnewsasia.com/news/world/if-scotland-independence/1355924.html). Why is there seemingly a wave of secession talk and how will these notions affect us in this part of the world - Southeast Asia?

Handily enough in my email box from a few days ago was a report from a bank on the political betting odds of the Scottish Referendum (which points to a "yes" to remain; which differs from opinion polls results) and how it would affect England.  Do read the article excerpts (see below!), which also discusses recent accuracy of opinion polls versus betting odds in politics and points out how reliant Labour is on its Scottish MP base. Looking at 18 September Scottish Referendum betting odds sites suggested, https://www.betfair.com/exchange/politics/market?id=1.110033387:

Bank of Singapore: Follow the Money in Scotland Vote, 9 September 2014   Economics has plenty of obscure areas of research and sometimes they are relevant to financial markets. One field looks at the predictive power of opinion polls compared to the odds in betting markets. The strong conclusion is that we should “follow the money” as betting markets have a much better track record... This is important now that the opinion polls are suggesting the Scottish referendum on independence will be a close vote. Here (http://www.bbc.com/news/events/scotland-decides/poll-tracker) is a link to a BBC website that tracks how opinion polls have developed. Sterling has fallen sharply after one poll showed a majority in favour of “Yes” in the vote for independence that will take place on 18 September, and others showed a tight contest... In contrast, betting markets (such as Betfair or Ladbrokes) continue to show a strong prediction of a “No” vote. Admittedly the odds have narrowed – until recently the betting market gave the Yes vote about a 25% chance, while now it is up to 34%. That is still a huge distance from the neck-and-neck race shown by opinion polls... Betting markets have an established track record of predicting the winners in US politics. Recent examples were when the opinion polls were showing a close race between Bush and Kerry in 2004 or between Obama and Romney in 2012, while the betting markets were leaning strongly in favour of the eventual winner... The idea seems to be that numerous informed and interested participants express their views through a betting market. It is not one-man, one-vote – the biggest wagers will have the most interest in the outcome. In contrast opinion polls are a relatively narrow cross section of potential voters, where the presentation of the question can also affect the result... There is a high degree of uncertainty about the consequences of a Yes vote. Much would depend on negotiations in the 18 months before independence in March 2016, with national defence, the allocation of government debt and assets, location of financial institutions, the choice of national currency and membership of the EU all to be settled... The direct impact on the remainder of the UK does not appear too large, as Scotland represents less than 10% of the economy. However, there is potentially a large political impact, as Scotland predominantly sends Labour politicians to the UK parliament in Westminster. Currently there are 41 Labour MPs from Scotland (out of a total of 257) and just one Conservative, so it would become harder for Labour to win an election.... It is not clear how a pro-independence vote would affect the next UK general election due by May 2015, as the Scottish seats might not be contested or they could only serve until the split in the Union... From a financial market point of view it would increase the chance of a Conservative government bringing a referendum on continued membership of the EU in 2017. Moreover, without the influence of (relatively pro-EU) Scotland it would make an exit more likely. Whether or not this is negative for GBP is debatable, as it would probably lead to a more free market orientation to the UK, less constrained by the social democracy of the EU. However, markets seem to be viewing such an outcome negatively. If the betting markets are right then these are complications that will not trouble us after the vote on 18 September..."

Indonesia presidential race (updated a)

Indonesia presidential race (various updates):

http://khorreports-palmoil.blogspot.com/2014/06/indonesia-presendial-race.html

 

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30 July 2014: Jokowi goes online for Cabinet by Sita W. Dewi and Yuliasri Perdani, The Jakarta Post, Jakarta | Headlines | Fri, July 25 2014, 8:36 AM; "... Social media played a major role in his presidential-election victory and now president-elect Joko “Jokowi” Widodo has embraced the same tool to recruit his ministers. At the same time he is easing pressure from those seeking places in the Cabinet and attempting to win over his opponents... Amid rumors and media speculation about his Cabinet choices after he is sworn in as president on Oct. 20, Jokowi and his team have produced an online poll called “People’s Choice for an Alternative Cabinet” published on jokowicenter.com.... In the survey, the team is putting forward three different names for each ministerial post in a Cabinet of 34 ministers. The poll also provides an option should respondents wish to propose another name. It is expected citizens will respond enthusiastically to this Indonesian Idol style of recruitment as it will be the first time they have been involved in Cabinet formation....

24 July 2014: I checked with a source who's a Jokowi supporter, who had this to say: "I am holding the jubilation at least until two things happen: i) Golkar crosses over from Prabowo side, giving Jokowi 2/3 majority in parliament thus he cannot be impeached. Currently, the parties backing Prabowo have threatened impeachment on the first few days in parliament* and b) Prabowo finally concedes." *refer to 11 July posting (below), Indonesia’s Parliament in a extraordinary session, amended the constitution. Referred to in the Indonesia media as the "Law on MD3", the next leader of Parliament will be chosen by MPs, rather than awarded to the party winning the most seats i.e. Jokowi's PDI-P....

9 July 6pm note: PDI-P and Megawati declared victory but no concession from Prabowo then.
It seems that big corporate donors sure made a big push Prabowo to win but Jokowi-JK prevailed and their lead grew. For plantations, Prabowo sounded more bullish on upstream and biodiesel topics. Jokowi has warned on special interests and those companies falling short on various issues of governance. But PDI-P is still rather nationalistic and we should expect differences; as seen elsewhere in the world. Our reader SK notes this: Now the question is who will be in the cabinet? Will Jokowi co-opt more competent bureaucrats from Demokrat? We might also wonder how will Jokowi'srelationship with Megawati and daughter-son evolve.

Exit polls: Jokowi-JK win 52.7% vs 47.2%. 9 July 2014 update, 4.15pm. Several polling organisations find for Jokowi-JK victory, 5.5%-age points ahead of the Prabowo team. This is ahead of the 3%-age point narrowing lead just before polling day.

POLLING DAY! 9 July 2014 update, 9am. Thanks to our reader SK, two negatives on Jokowi's campaign - apparent campaign planning and excecution problems in PDI-P and an alleged TNI program... Exit polls in foreign voting show strong support for Jokowi... For those interested in policy directions, UOBKH Research, 8 July on final debate: The final round of the presidential debate was a heated one with Jokowi-Kalla on the attack. Kalla raised the issue of Newmont divestment, graft regarding the people surrounding Prabowo and conditional coalition offered by Prabowo. Jokowi also attacked his rival’s promises and questioned how they would ever realise those plans....
 

7 July 2014 update: News and view on the 5th and final Presidential Debate on Food Security, Energy, Environmental Issues. Also, interesting to note that Jakarta Globe wonders about a situation of "no clear winner" of the election, worries about TNI (armed forces) role and which are the key swing voting regions.....

 

4 July 2014 update: Interview #2 Presidential race heats up, foreigners worry? In the last two weeks, I've been in touch with six (6) people who represent large business interests in Indonesia including in palm oil (domestic and international owners) and three (3) Malaysians who work and/or are invested in Indonesia palm oil.  Khor Reports notes on key Indonesia-Malaysia plantation topics.

 

17 June 2014 - One survey shows  Prabowo-Hatta surpassing Jokowi-Kalla who have been on a narrowing trend. Indonesia surveys were off base when some earlier expected a solid Jokowi-PDIP win in the legislative elections. Sample size was not terribly big for this one and some say that Indonesia voters can change their minds with a large 40% proportion as undecided in other surveys.
I'm also hearing on Indonesia sources that many civil servants are not be terribly keen on Jokowi given his public "shaming" of Jakarta bureaucrats. Thus, they tend to be Prabowo supporters.

9 June's Update 2 is for Jokowi sugar mill update plan.
Khor Reports comment: We've been keeping an eye on this and expected increasing economic nationalism once Jokowi failed to get a large majority in the earlier polls. A plantation expansion moratorium for large companies is in regulations with a 100,000 hectare cap to be implemented but still subject to negotiation on the finer details. One way to lift this ceiling is to be publicly listed in Indonesia - but there is uncertainty as to the public float expected. This situation has not been tested, but we suspect that a significant public float[1] may find favour with Indonesia's economic and financial sector development policies..................

Click on this link for more: Indonesia presidential race (various updates):

http://khorreports-palmoil.blogspot.com/2014/06/indonesia-presendial-race.html