Business Advice: Nothing ventured, nothing gained

By Tan Thiam Hock

I had a weird start to 2012. For the first time, I joined the unemployment line. Voluntarily of course. I started working two weeks after my final examination in University Malaya back in Feb 1983 and I have never stopped working since.

Had a good month's break from writing this column and I have to admit that writing is much much more difficult than selling lipsticks! Mighty pleased that I am not making a living out of this writing profession ... or my family will be starving at this moment. No holidays. No iPhones and no I want this and I want that.

To some concerned readers, no, I was not banned from writing nor was I terminated by Star Publications (M) Bhd CEO. I did receive some formal complaints from some sensitive officials from government agencies and sovereign funds but no RM100mil defamation suits ... yet. As such, I do not have to apologise in public to anybody. So far, so good. No shame.

Writing this column forces me to recall snippets of historical events that had pass me by. Looking back, an event that happened 31 years ago could have changed Malaysian history. And your current cost of living.

In 1981, I was in AIESEC, University Malaya involved in organising the Heavy Industries seminar, at a time when our Dr M decided to launch the national car project. Our economics professor, Dr Chee Peng Lim was adamantly against the car project, arguing that Malaysia should concentrate her resources on modernising agriculture, invest in infrastructure and resource-based manufacturing.

He further argued that unlike Japan and South Korea, Malaysia has a small domestic market and we will not achieve the economy of scale that will help make us cost competitive for the export market. It would be an extremely inefficient allocation of economic resources if we were to proceed with the car project.

It was rumoured then that Dr Chee had to leave the country and he subsequently joined the World Bank. No opportunity to confirm this rumour but what a great story!

Commodity prices are at its highest in years. Felda pioneer settlers are all millionaires. Malaysian rubber gloves dominate the world market. And Proton is still in a poor state of affairs. Proton still needs the protection of the Government to compete in the local market. It has never been able to compete in the world market. With or without Lotus. It never will. Dr Chee was right.

To be fair, Proton did generate some economic benefits. It spawned many entrepreneurs with investments in car parts, logistics, etc and it created jobs. Billionaire entrepreneurs were also created ... from papers. That's right. From AP papers that costs a few cents to print. So, why bother to sell cars when it is more lucrative to sell a piece of paper? In the meantime, the poor rakyat has to pay some of the highest car prices in the world.

There is no better place in the world for entrepreneurship to flourish than Malaysia. The best projects are privatisation projects. Buy an airline from the Government with maximum loans from our GLC banks. If you manage it well, then you are a successful entrepreneur. If not, no worries. The Government will buy it back from you at the same price. So, you wasted your precious time but hey ... nothing ventured, nothing gained, right? You will never ever suffer personal losses. Only occasional lawsuits.

Back in the good old days before LRT, we had a haphazard public transport system of mini-buses and many bus companies. But it worked. In true entrepreneurship spirit, supply meets demand. And the mass could travel everywhere by bus. Many choices and on time arrivals.

Then the Government decided to upgrade the public transport system by centralising and privatising. All the old Omnibus companies folded. Tong Fong Omnibus, Klang Omnibus and Ah Hock Omnibus. Conservative entrepreneurs who toil over long hours and small margins. Good riddance though to those crazy and dangerous mini-bus drivers.

Brilliant entrepreneurs were roped in to invest in modern air-conditioned buses. Easy loans were arranged. Modern management techniques were employed. Monopolistic routes were divided and spread among these entrepreneurs. But still they lose money? Now they claim that they are providing a social service to the rakyat. “Compensate us for the losses or we will stop running the buses.” The rakyat was held to ransom.

With election looming, neither the opposition state government nor the federal government could afford the backlash from the rakyat. The rakyat's money was used again to pay inefficient and hopeless entrepreneurs. No shame. No shame.

Entrepreneurs invest in business knowing that the risk of failure is ever present. So you work hard and you work smart. You try your best. If it works, great. If you fail, just swallow your pride and walk away. Don't go begging for help especially if it is the rakyat's money. And don't you dare hold the rakyat to ransom again.

In the ETP seminar, Datuk Seri Idris Jala said inefficient entrepreneurs should be eliminated in a free enterprise economy. I agree. The politicians and the bureaucrats should manage the rakyat's money as if it's their own or the rakyat will hold them accountable in the polls.

Dr Chee, wherever you are, thank you for the invaluable lecture.