EP144 | ‘Right-sizing’ Petronas, Urban Renewal Act (URA), Tarif Semikonduktor, Pemilihan DAP & PBB

0:00 How different is it in 10 years? Apparently, KJ... basically, the easy fields, in simple terms, where it's easy for us to extract hydrocarbons, are gone. Welcome to episode 144 of 'Keluar Sekejap' with me, KJ, and I'm Shahril Hamdan. How are you, Shahril? Thank God, I'm good. Are you okay, KJ? Yes, I'm more or less the same. We only have a few days left before we... Celebrate KS's 2nd anniversary? Oh, that's less important. I wanted to say, before we celebrate the month of Ramadan, but that's also true.

0:47 When do we welcome it? Next week? Yes, this was reported by our team. Maybe the same day or a day apart? More or less. KS's second or third birthday? KS's second. And Ramadan. And God willing, we, fellow Muslims, can make preparations from now on, if we haven't already, to worship together. And we hope that our worship will be accepted by Allah SWT during the fasting month. Shahril, I know Shahril lives in KL City Centre. Around the city center of KL. I live outside. Because I don't qualify for urban renewal, living in the city center. That's only for the very, very rich.

1:34 For those living outside of KL, there is one area that is truly the richest. Which is richer than the central area of Kuala Lumpur. But Shahril surely is... because he lives in the city center of Kuala Lumpur, maybe you always goes to KLCC? Often. I go to KLCC often. Does Shahril know? In KLCC, there is a phenomenon that has become a national phenomenon. What is that? That is the lanyard phenomenon. Oh, right. Lanyards. Because if you go to KLCC, there will always be a group. A group from one company, no need to mention which company, that is proud. Very proud. Like another group that went to a boarding school.

2:20 There are many schools like that. Especially one. The boss is the one who always wears a lanyard on certain days. My family members are like that too, so I can't really say much about that school. I mean, these guys peaked at school. Sorry. Anyway, but this corporate lanyard, there is one lanyard with a certain color. That's right. Green color. Sometimes, they even wear it on Saturdays and Sundays too. But I see, my observation as someone who rarely goes to KLCC, for the past month or two, I haven't seen this lanyard much. Oh, they're not showing off as much anymore. This lanyard is a little less visible. There is an identity crisis, there is a crisis of confidence.

3:07 Let's talk openly. What we mean, of course, is our friends at Petronas. The lanyard I mentioned is Petronas Green. There is a lot of uncertainty right now regarding Petronas. And that day we touched a little bit about Petronas. But I raised this issue, Shahril, because I recently read an article in MalaysiaKini where a senior journalist proposed an idea that I had heard before, namely that Petronas, instead of having a subsidiary -- because there is a Petronas subsidiary that has already been listed on Bursa Malaysia -- should list the Petronas parent company

3:55 as has been done by Saudi Aramco and so on as one of the steps to, firstly, ensure that there is sustainability for Petronas' finances and also that there is an effort to possibly transfer some of the profits to the government and also to the Malaysian people. This proposal comes in a situation where we still do not know with certainty what will happen at Petronas because what we do know is the statement made by Tengku Taufik, Tengku Tan Sri Taufik, Chief Executive Officer of Petronas, who said that at the appropriate time, perhaps this year, there will be a

4:41 rightsizing exercise. This rightsizing is to ensure that the size of Petronas in terms of functions, in terms of the number of employees, in terms of their business units, is fit for purpose or is the most relevant for the current situation. Maybe Shahril can give a little explanation about the world situation that demands Petronas to take this step. Because I also brought this up. It's the middle of parliament right now, so in the debate there are various issues raised. There are issues that I think are well-founded, and of course, since it's parliament, there are issues that are just shots in the dark. But these shots in the dark or just stabs, they will become matters or topics of conversation among the people who may not know,

5:34 and it is easy to say that this is because of what happened in Sarawak, this is because of politics, tens of thousands of jobs will be cut from Petronas. Do you want to explain that again? Yes, we briefly discussed that during the 'Kena Soal' episode. And in my opinion, if we want to explain, we first have to understand Petronas' unique position. It is a national oil company, but it is also an international oil company. At the same time, it is not just an NOC because it is owned by the government or owned by Malaysia, but it also plays a role in developing the industry, acting as a regulator.

6:20 So it's more than just a commercial entity. There are not many oil companies in the world, perhaps it is not an exaggeration to say that there is no other oil company in the world that has the characteristics that I have described about Petronas. Maybe just one, NOC. Only one NOC... Regulator and oil company. So Petronas is maybe the only one. The only one with that function and that characteristic. So what's happening in the world, other than what we already know about the uncertain geopolitical situation, which we can discuss a little later, but before going too far, maybe about the oil and gas industry itself. Which if we read, since the 'Kena Soal' episode, I've studied more, asked other friends, who have a supply chain together with the Petronas team.

7:06 Everyone says that the oil and gas industry has changed very rapidly in the past 10 years. I was active in that industry about 10 years ago. It's very different now. So, for example, of why it is very different. One is, as we mentioned recently, automation and artificial intelligence have changed the way human resources are used. So that's one. Secondly, the cost of drilling, of exploring for and producing oil and gas has increased significantly. I asked, what's so different in 10 years? Apparently, KJ, basically the easy fields, in simple terms, where it's easy for us to extract hydrocarbons, are gone. You just poked it, and it came out in the past? More or less like that.

7:52 Especially domestically but also in the international field. So the cost of production, drilling, everything is higher. Add to that inflation, rising manpower costs, and so on. All of this gives an idea of where the industry itself, its cost structure, is different. When such a situation arises and Petronas plays the role I mentioned earlier and not just as a commercial entity, then the question arises. Is Petronas able to stay steady and conduct business as usual, or is it forced to take drastic steps now so that it doesn't get too late? If it waits too long, then it will have to do something that is more painful or more... not painful, more difficult, more challenging than what needs to be done now, which is, like Tengku Taufik said,

8:39 Tengku Taufik mentioned, for rightsizing. And it's the situation in the industry and, to some extent, geopolitics that makes this matter worth considering. I want to add a little to the challenges faced by Petronas so that KS listeners and viewers can understand it more deeply, apart from what Shahril mentioned earlier. Nowadays, there are many in the corporate world, the business world. I think Shahril, as a corporate advisor, knows about this. There is a lot of adherence to the sustainability agenda, the environmental agenda, the commitment agenda towards efforts to ensure that we fight to ensure that global warming can be controlled, and so on.

9:28 And Petronas is in an industry that is synonymous with this because they are involved in hydrocarbons. The footprint, or carbon production from a company like Petronas is certainly very large. Compliance costs, in today's situation, if it didn't exist in the past, we wouldn't have thought so much about this. If we had just let the carbon dioxide out, just vent it. Now it has to be captured, sequestered, and put back. And this also adds costs that didn't exist in the past. In the old days, as Shahril said, exploring was easier. It wasn't exactly easy, but you'd just probe, and the oil was there. Now we may have to go vertical, we may have to go horizontal, which increases the cost. Then you have to capture the carbon.

10:15 That all adds to the cost. There are also opportunities that may be limited. We have seen predictions for the future, regarding Petronas' profits and income, but have not yet been resolved. For example, several government policies have not yet been finalized, related to CCUS, related to carbon tax, and that adds uncertainty to the costs that Petronas will one day bear. And secondly, there are many areas where we know there are reserves, but they are still not completed in terms of overlapping boundaries with other countries. For example, with Indonesia.

11:02 There are many reserve areas that we know have gas, but cannot be developed, exploration cannot be done because there are still no provisions in terms of overlapping claims. And thirdly, to repeat the point I mentioned earlier, is the geopolitical situation. This geopolitical situation is not just about Trump's victory and his efforts to ensure that oil supplies from the US are increased because he's all about "drill, drill, drill." Drill, baby, drill. But perhaps Shahril has seen, a rather surprising development in the past few days,

11:48 which is now being referred to as capitulation, or an act of Trump giving in to Putin, who basically said, you know, we're not going to be there for Ukraine. And if this happens, the result is certain that Russia will be reintegrated into the world economy, including gas supplies from Russia, which may have been facing restrictions and sanctions. And then, taking from that last point, it's not just the cost, but the revenue itself. Because if gas prices plummet due to a sudden increase in supply,

12:34 then that will also be a challenge to the projections for Petronas itself. I guess the question... we've talked about challenges, we've talked about internal, domestic challenges, external, geopolitical challenges. The question arises as to how we, as a society, and also the whole system, should react to this matter. Because Petronas is the major player here, to make rightsizing and any modernization that needs to be made, which will cause some impact in terms of jobs and so on. What can be done, not only by Petronas, but in terms of our education system, in terms of retraining that Petronas may have to do, but also other government agencies may be able to play a role.

13:21 Here, I want to ask about KJ's own experience as a former government member. Has something like this ever happened in your experience, where the government has to step in and, as part of the response, make policy changes? Policy changes for what? Maybe we should start from the point of view of education and skills. As a reaction to something like this, a response to something like this. Is there something like... an example of IKBN (National Youth Skills Institute) which you oversaw when you were at KBS (Ministry of Youth and Sports)? They supplied a lot of the manpower to Johor, Pengerang. Are there conversations that need to happen between the government and Petronas? I think it's more about meeting needs, demand.

14:08 The example mentioned by Shahril earlier, IKBN and other training institutes, that respond to demand, respond to increasing demand. But in this, it's not the same. It's more trying to reskill the workers who we expect will have to be deployed to other industries due to what Petronas is facing. So, perhaps the discussion definitely needs to start now within the government and also Petronas, what will happen. I feel, Shahril, that Petronas will not take any arbitrary action.

14:54 Because Petronas is not a normal oil company. It is still an NOC. What is NOC? NOC is National Oil Company. The National Oil Company is a company, a government, a people's company, owned by the government, on behalf of the people. And I don't think it's too far-fetched to say, Shahril, that the guiding principle of Petronas is trust. Because it is really keeping the trust on behalf of, the custodian of the hydrocarbon reserve, on behalf of the people of Malaysia. And future generations. And future generations. This is made for future generations. It doesn't want us to survive today, but for the years to come, for the generations to come, it won't be enough. However, they have to do something. He said we are indeed in a situation where we have to do something.

15:42 But from what I know, and I also looked into this, Shahril, Petronas, when faced with a situation where they had to, for example in 2016, because the price of oil dropped from 100 USD per barrel to 30 USD per barrel, Petronas had to let go of approximately 1000 employees, contract staff, at that time. But at the same time, Shahril, Petronas just minimized it. Other companies, ExxonMobil, 10,000. BP, 4,000. Total, 5,000. Schlumberger, 20,000. And that's the scale of it also because

16:27 that's trust. Petronas, as a national oil company, has this responsibility, they have a responsibility towards the country as well. And if we look at the COVID era too, Exxon, they lost 14,000. Chevron, 7,000. Shell, 9,000. BP, 10,000. And Petronas, zero. Because national service. So, what I want to say is, if Petronas does it this year, I think they will do it in an organized way, in a prudent way, and with efforts to ensure that they've identified first. They won't say, ok, this group will be dropped. They will do it exactly based on the function of the job, based on whether it

17:13 wants to invest in this business or divest. After that, they made a conclusion. This is something we might have to discuss with them. How do we arrange the terms of separation before they might offer upskilling, reskilling, and so on. I'm interested in what KJ mentioned in terms of Petronas' history, which, if possible, is the last option. And it is indeed in their track record. And it's not just contract or permanent employees under Petronas. But as we mentioned earlier, because they are also industry developers, many vendors are built from the supply, the Petronas supply chain itself. The vendor development program that anyone who is involved in this industry will know.

17:59 In oil and gas, there is a Bumiputera vendor development program, and one that has been renewed, but that's more or less the case. There is always a program to develop the supply chain so that Malaysian SMEs, many of which are Bumiputera, can be built under the Petronas umbrella. So it's not just the direct staff or the contract staff, but it's also the entire workforce in the oil and gas industry in Malaysia. I think in other countries, Shell, BP, Chevron, they don't have a BDP vendor development program. A specific vendor development program that has developed all these SMEs, even the listed ones. I think maybe your company used to be part of the vendor development program of Petronas.

18:47 Yes, for a while it was. And the other thing is in terms of how to do this, I was interested in the initial announcement by Tan Sri Tengku Taufik, because when I compare it to 2016, if I'm not mistaken, the news that a thousand staff would be laid off in 2016, he just said that in one shot. And then obviously they made it happen properly. But this time, he seemed to want to say it first and without naming a number, giving me an idea, they haven't even decided what the number is yet. Because as KJ said, they will study what functions can be integrated,

19:32 which ones the organization needs to be re-corrected, then they will determine due to the reform, how many jobs need to be re-skilled or if not, need to be addressed as best they can. So, it's not like they have a number in mind, and then he's about to act on it. No. He wants to do some in-depth research before making a decision. So, I think this new approach is better, more in line with and consistent with, as we said earlier, the more comprehensive functions of Petronas. Shahril, I don't think this issue will disappear. It will become even more heated when this happens, because Tengku Tan Sri Taufik has already said that it's going to happen.

20:18 And I think, to be fair to all parties, because KS is a place for us to discuss current issues, politics, policies, and so on, we will revisit this issue from time to time because, for me, as I mentioned earlier, in terms of the Malaysian economy, Petronas is one of the important crown jewels. And there is certainly a lot of speculation, a lot of concern about what will happen due to the initial announcement made by the CEO of Petronas. The second is speculation that tries to link things that... I understand, I understand why people link things like this, but we have to be fair to all parties and understand that

21:04 the reality is that it's not that simple. There are people who will link this to Sarawak, and there are people who will link this to political stability. Okay, to put it simply, because of what has happened in Sarawak, where Sarawak Petros has primarily succeeded in becoming the sole gas aggregator in Sarawak, meaning controlling the gas supply in Sarawak, taking over from Petronas, that has affected Petronas' profits, which has caused actions like this to have to be taken. Or, another rather cynical view is that what is happening in Petronas, including Sarawak, is an effort to ensure that political support can be given to the existing government, and ultimately, due to the cost of that political support,

21:54 Petronas will be the victim. But I think, to be fair, we've done independent research, and we've found that it's not that simple. There are several other factors, including the political crisis that is happening in the world, including rising costs, and including the responsibilities that need to be faced in terms of sustainability, and also Petronas as an entity that is always looking ahead, anticipating future changes for the next 20-30 years. If you continue with the current headcount, you are not fit for purpose, and Petronas will not exist in 20 years. Is that fair to say? I think that's fair to say, and that's actually Tengku Taufik's statement.

22:39 But regarding cynical views and so on, you know what's best, KJ? If Tengku Taufik himself could come to the 'Keluar Sekejap' couch and we would ask these questions because, like KJ said, people will ask if this has anything to do with Sarawak or not. And in our view, we believe what Tengku Taufik said in his statement, but let's ask him. So, that is our hope. We hope that our 'lanyard' friends are listening and watching this episode and can convey a little message to our boss, Tan Sri Tengku Taufik. And I can imagine. We won't be here We will be on the bridge. Yes, that's okay too. Wow. Which bridge? The bridge on the 42nd or 43rd floor.

23:30 Let's see. We'll be back later. Assalamualaikum and welcome back to episode 144 of 'Keluar Sekejap'. I think it was a very interesting discussion, Shahril. We didn't even script much of the discussion earlier. I just said, you know, maybe we should talk about Petronas a bit. Because of how important Petronas is to our country, we hope that KS listeners and viewers can comment if they have any views, opinions, concerns, or worries regarding the future of Petronas. We want this to be an ongoing conversation at KS so that the people understand better,

24:17 because I think this will be the biggest corporate exercise in Malaysia this year, perhaps, Shahril. Shahril, there is currently a commotion in Parliament regarding what is known as the URA, or Urban Renewal Act. For background, this bill has yet to be presented in Parliament. In fact, it hasn't even been brought to the Cabinet yet, if I'm not mistaken. It is still being reviewed by the Attorney General's Chambers and is said to be tabled in Parliament in the middle of this year, possibly in the second session of this year.

25:06 And this act has already sparked quite a bit of controversy because the scope of the Urban Renewal Act includes the redevelopment of existing buildings and abandoned projects. So, Shahril for example, I mentioned Shahril lives in KLCC or around the city centre of Kuala Lumpur. Have you noticed, Shahril, that there are old buildings, buildings that have been abandoned, that we feel like, why aren't buildings like this redeveloped? If we take an example, maybe, in areas like Jalan Tengku Abdul Rahman and areas near Old KL Town.

25:52 We see there are many strata buildings. A strata building is a multi-storey building. It seems like it's been around for a while, and some have been abandoned, some are not fully occupied, some are still abandoned, but cannot be developed. This is due to, among other things, if we look at the existing laws in Malaysia, namely under Section 57, Strata Titles Act 983, Act 318, to ensure that an en bloc sale, a total sale,

26:37 of a strata multi-storey building in Malaysia, requires 100% consent from the strata owners. And this is said to be a major obstacle to the redevelopment of these old buildings because it is very, very difficult to achieve 100% agreement. I think maybe one or two of the successes of reaching the 100% threshold agreement to sell are cases like Pusat Bandar Datuk Keramat, Tengku Abdul Raman Flat in 2015, and Razak Mansion in 2016. Agreed.

27:23 And even that... Maybe that can explain why it's so difficult. This number of people will not be practical. With that number of people, there will be those who disagree, and there are units that may be stuck in terms of being divided among family members and heirs. So that makes it a problem. But in the case I mentioned earlier, for example, Razak Mansion. Razak Mansion is one of the flats or buildings built in the 1960s. And this was among the first apartment buildings in Kuala Lumpur. And when Razak Mansion received 100% approval, the original residents or occupants of Razak Mansion

28:10 received one-to-one compensation in a unit in the new building. And these people were given a larger unit than their original unit. And the new apartment has new facilities such as a multipurpose hall, surau, and so on. And that is a fairly successful example in terms of urban renewal where they gave consent, got one-to-one compensation, or got one-to-one replacement with a larger unit than the original unit, and has successfully developed a new development known as RC Residence.

29:02 This is an example of how it's done. And under this Urban Renewal Act, or URA, it aims to lower the approval threshold from 100%. Because Razak Mansion is a successful example. But there are many other examples that did not succeed because the 100% agreement threshold cannot be reached. Is this normal, KJ, outside of Malaysia? Yes, so for instance in Singapore, for buildings that are more than 10 years old, the threshold is 80%. In Western Australia, for buildings less than 30 years old, it is 90%. And in New Zealand, the threshold is 75%. So it's already known that if they want to do urban renewal,

29:47 It's like, I don't know if this is a fair analogy, but even if we want to take a listed company out of the market and privatize it, we don't ask for 100% agreement, right? Something like that. A 90% threshold for a mandatory general offer, as an example. so that a small minority group cannot prevent a transaction from being executed. So what is currently being proposed in Malaysia is, 80% for buildings that are less than 30 years old, 75% for buildings that are more than 30 years old, and 51% for abandoned or derelict buildings. So for abandoned buildings, as long as you get 51% from the owners of strata titles, the building can be sold. And the last one is the best, because if I read the notes here, the

30:35 Department of Town and Country Planning, Plan Malaysia, has already identified 534 sites and buildings in towns in the peninsula alone that are in a dilapidated state. So maybe it's more or less abandoned or not very inhabited anymore. So the objections come in what can be called four arguments, four buckets of big arguments. The first is in terms of the threshold value, and I have heard several views and debates in the Dewan Rakyat (House of Representatives) that raised this issue, saying that it used to be 100%, now it is 75% for this type of strata building. And this step gives an advantage to the developer, they said,

31:20 because they can only secure 75% or 51%, and they can take over the project. The third is to say that the existing act is sufficient. I think this is not a very strong argument because if the existing act's argument was sufficient, we wouldn't have all these problems. Fourth is increasing population density and quality of life. This may be something to take note of. How many more condos do we want to build? There is a concern that if a developer takes over the building, they will increase the plot ratio; they will ask for more flats or apartments to be sold. But that's DBKL (Kuala Lumpur City Hall) and that's their job.

32:05 That's DBKL's function to ensure that if this happens, they will maintain the community feel. So the community feel of the area hasn't changed because many people say, okay, I'm happy with my old flat because I already have neighbors, I already have a community feel. Suddenly you made a flat that looked like Kowloon in Hong Kong, like a pigeon hole, after that, I had no comfort at all and so on. So that's actually the function of the local government, for example, DBKL, to ensure that this can be avoided. But the most worrying argument right now is the argument based on race. Which means that the implementation of this Act could affect

32:51 Malay property ownership in urban areas, where the urban renewal process has the potential to result in the relocation of Malay residents from urban areas, thus reducing their population and property ownership in those areas. Before we debate this matter, Shahril, I understand where this concern comes from. They feel that this is an effort to take over low-cost flats or low-cost apartment buildings that may still have Malay residents in this urban area. And when it is taken over, the perception, whether true or not, whether fair or not, is that property developers are property developers who only think about profit

33:40 and will sell at prices that may be difficult to obtain for the poor, whether Malay, Chinese or Indian, but the average low-income earner, the majority of whom are Bumiputera (sons of the soil). Yes, that's a concern when it comes to making reforms in urban areas. It is also a relevant concern in a topic that is not this one, but I think it is a little related in a broader context, namely local elections. All of this leads to the question of whether it will affect the position of the Bumiputera Malays in urban areas. But I think the argument we used to refute the previous argument, namely that this is the function of DBKL or PBT (Local Authorities), can also be applied here.

34:26 Because I think the problem of developers developing housing and residences that are not suitable for the locality at one time, in terms of income and so on, that is a problem that exists now. Even without the Urban Renewal Act reform, this problem still exists. So, the solution is not to prevent this because this can unlock good value for everyone, but the solution is how we want to have a system where, for example, we focus on housing. I have long held the view that we need to have demand-driven data to determine which projects can and should be approved. This means that if we want to build an apartment or condominium in a locality, is there data that can show

35:13 whether it is relevant to the income rate in that area? If not, then the threshold for approving the project becomes higher, or we should not approve the project so that it is suitable for the local community and its income level. Indirectly, it will reduce the risk of an influx of residents who may have higher incomes than usual and push aside or push out existing residents who may have more modest incomes and are Bumiputera. So, that's the remedy. We can agree with the problems and concerns, but let's not take the wrong medicine. Because I think this is a progressive thing that can unlock the value, using other medicines or using other ways to combat

35:58 or avoid what we are worried about. Yes, so taking from what Shahril mentioned earlier, it's more about... after we give a leeway, which is a lower threshold value, making it easier for old buildings, dilapidated buildings, buildings that have been abandoned to be taken over. So there, we can put the conditions for its development, and the conditions for its development, for example, must follow the wishes or outcomes desired by the government or local authorities. So, DBKL can inform you that if you want to take over this building, for example, first of all, the compensation must be fair, one to one.

36:47 We must ensure that the community feel or feeling of being neighbors is still maintained. Third, even if it is redeveloped, it will not be developed with luxury apartments. However, the apartment may be almost the same, or more or less the same, in terms of market value or purchasing power as the original building. Maybe they could add a little more because it's rejuvenation, right? However, if it were replaced with a free market process determined by the developer, that's when the horror story that some parties are trying to propagate will become the truth.

37:32 And this will not only involve the Bumiputera group. But, I know that there are many non-Bumiputera groups who are not well-off, who are not even rich, who live in flats in the heart of Kuala Lumpur. And they will also be affected. Those who may be low middle income or B40 (Bottom 40% income group) are also the ones who inherit small flats in areas in Kuala Lumpur. We can go to any area of Kuala Lumpur, especially the old town of Kuala Lumpur. We can see flats like this. This is what is meant. So, if such authority is given but given with the intention of providing profit to developers, that will cause those concerns to become a reality. But, if this comes with a guarantee from the government

38:21 that the government will follow the plans that have been determined so that it can ensure that we see not just urban renewal, but people coming back to the cities. Because right now, there are so many people moving to suburban areas, rural areas, who need commuting, who need vehicles and so on. What we see is more people returning to the city so they don't have to pay transportation costs, buy cars and so on, and this can directly lead to a renewal and a rejuvenation of Kuala Lumpur, not with foreigners, not with outsiders, but with local people who work in Kuala Lumpur, who live in Kuala Lumpur as well.

39:09 Yes, that's our stance, I think, regarding this new legislation. Okay, good. Shahril, do you want to talk a little about tariffs? Yes, I want to talk a little about an issue that we will be doing many times, the issue of Donald Trump. Because every week, every two weeks, there is big news. Not once a week, every two, three days. It's only been a month since Donald Trump officially took over as US president, and in just over a month, so many things have happened as if his time as president has actually gone by faster. And I read some analysis that said that was actually his point, which was to flood the zone.

39:58 To make us talk non-stop about him and about the US. It's not that we really want to, but because this issue really impacts a country like ours. In this latest context, after he announced his intention to impose tariffs on steel and iron, what is affecting us more now is Trump has announced the possibility of imposing tariffs of around 25% on imports, including semiconductor chips and pharmaceuticals. Cars too, but the biggest issue for us is semiconductor chips. And this is a serious matter because Malaysia is an exporter to the US.

40:43 The chips may come from US companies themselves, such as Intel and so on, but from Malaysia, we export to the US, and the value of that export is 1.4% of Malaysia's GDP. That's a large amount in terms of trade. We trade many things, oil and so on. Ultimately, more than 1% of our GDP is just this: just our semiconductor exports. And there is a report from Bloomberg that I posted in the group; I'm sure KJ has read it. Supposedly, there is news that the Malaysian government, especially PMX, has been advised by its own government officials to reduce the rhetoric related to Israel's genocide against Palestine, against Gaza.

41:33 Who advised PMX? No names were mentioned, but it was said... Malaysian government officials to America? Malaysian government officials. Is there anyone who dares to say that? If you believe Bloomberg – I guess we shouldn't 100% believe Bloomberg – but the story is that there are government officials who say, "You need to tone down this matter because the United States is starting to feel uncomfortable." And the former Malaysian ambassador to the United States, Dato' Sri Nazri, has even told me – and I'm not mistaken – that he was called in five times. He was called in five times by the State Department, I guess, to complain, while he was in Washington DC, about why PMX made certain statements. And it's not just about Israel.

42:19 Why is PMX seen as having close ties with Russia? But that was during Biden's time, maybe. Right now, Trump and Russia don't seem to be very hostile. Anyway, basically, if you want to believe this Bloomberg report, it is saying that Malaysia needs to be more careful. I would like to perhaps leave it to KJ in that regard; we can discuss how Malaysia and PMX can maintain an independent stance as a sovereign, independent country. What we should do, what we shouldn't do. But before that, KJ, perhaps what is more important for us to discuss, as I mentioned earlier, is the semiconductor tariff. I was actually a little relieved when I heard from our Foreign Minister, Dato' Sri Mohamad Hassan,

43:05 admitting, recognizing that this is a problem. Because sometimes, KJ, when Malaysian politicians respond to news that seems a little bit alarming, their first reaction is, "Don't worry, don't worry, don't worry." "Trump will not have a negative impact." "This will not have a negative impact." I understand it's possible to calm the situation. But I also like it every now and then if something really stands out, it will really make an impact. Don't downplay it. Let them know so that there is a willingness to take retaliatory actions. When Mohamad Hassan said this is going to be a problem, I read that he seemed to be hoping that ASEAN itself would play a role. He said there was a request for us to hold a special summit. ASEAN and the US have one every year, I'm not mistaken.

43:52 But this is probably more specific, for responding faster. So, I see, okay, this is good. Showing Malaysia's leadership in ASEAN in this regard; there is a desire. I don't know if it's possible or not, there is a desire to take that leadership position, engage with DC, and perhaps to say this is not good for both sides. Because not only is Malaysia an exporter, Singapore is also a big exporter. Vietnam is also an exporter in this semiconductor supply chain. So, that's one of the things I might want to start with for KJ to respond. Tariffs and also, I guess, how does PMX handle this? Yes, the potential for tariffs is real. and something that could affect.

44:39 our economy as a major exporter of chips to the United States. I think Malaysia has a very, very important position, not just for existing investments, Shahril, because right now, Malaysia is attracting investment from companies like Nvidia and Amazon to increase their investments in Malaysia, whether in AI, artificial intelligence, or in data centers. So, if it is announced that there will be tariffs or restrictions on exports from Malaysia, it is certain... even though those who make investments in AI and data centers are not directly affected in the supply chain in question,

45:25 but, reputationally, Malaysia will be affected – our reputation. Because they will say, "Why do I want to invest here? Because the Trump government has placed restrictions or tariffs on that country." So, it will have an effect. And this will have a huge impact on the government's aspirations to become the data center capital of Asia, basically. So, I'm also relieved that the government is taking this matter seriously and not just dismissing it, saying it's not important, because in today's situation, we know the only certainty about Trump is his uncertainty. So, if we admit that the one certainty about Trump is his uncertainty,

46:11 then we are at all times vulnerable. And when the news came out that there was advice given to the Prime Minister to lower the volume a little regarding Malaysia's stance regarding Palestine, perhaps if the news is true, if the report is true, it may have come from a message that had been sent from the United States saying that, "Well, you know, if you want to be off the president's radar screen as far as tariffs are concerned, make sure you behave." So, I'm not sure if this was planned or not. However, we at *Keluar Sekejap* have acknowledged that

46:59 PMX's overall stance on the Palestine issue is outspoken and forward-looking in terms of the Islamic world and Islamic world leaders. But I saw, Shahril, that recently, for example, when the US President proposed US takeover of Gaza, the official statement that came out was that Malaysia was "studying it." It was a bit softer than normal. And in his latest statement, the Prime Minister criticized the Israeli regime for failing to comply with the terms of the ceasefire. But it doesn't touch on the Trump administration, which is "all hell breaking loose" and all that kind of stuff.

47:44 So, again, I'm not sure if it was intentional or not, but in terms of language, in terms of temperature, I think it has been lowered a little by PMX. And perhaps this is due to the information received regarding the reactions that could occur if it is not done. And it might be easier for that to happen because of this. Despite the many violations of the terms of the ceasefire by Israel, the ceasefire still exists. So, there's a, you know, it makes it easier to sort of tone down the rhetoric, maybe. Maybe another point, a broader point, KJ, regarding this matter.

48:31 In one sense, it's not surprising. And I have long said, KJ, that although in the short term, Southeast Asia, including Malaysia, benefits from the US and China superpower tensions, particularly additional FDI, Southeast Asia has an increasing FDI, a very high share of FDI compared to the world FDI compared to other places in the world. But short-term profits cannot be a long-term yardstick. Because sooner or later, this is because this is a world tension and this is a gradual rejection of globalization. So, sooner or later we will be hit, and this is probably the first big hit

49:16 that Southeast Asia and Malaysia itself will experience. So, the question was always – not just now, but before – the question was always whether a country like Malaysia could take advantage of the temporary gains of these 2, 3, or 4 years to lay a stronger foundation to increase productivity, increase innovation in the long term. The problem in our politics, KJ – several problems – is that we are very focused on the FDI headline. We are very focused on presenting certain numbers without fully discussing them in context. And this is not solely the government's fault, but we also have a culture of debate in Parliament, a culture of debate from opposition members of Parliament.

50:03 Nobody is really tracking how much innovation Malaysia is generating. From the things that are coming in, like data centers, how much of that server capacity are we using? Nobody is really tracking how many new start-ups are emerging from Malaysian employees working in international companies. Nobody is really tracking, in terms of the National Semiconductor Strategy that has been announced, how much of that plan has been implemented. How many companies, how many new technologies have been born from the local universities? These are all on paper somewhere. But, as in, our political culture doesn't track it. It's not part of... Political culture. So, maybe KJ is more optimistic that in the government,

50:49 in the agencies, there are those who track it, but it's not in the public domain. When it's not in the public domain, KJ, then as politicians, whether government or opposition, it doesn't really become a topic of conversation that determines whether something is successful or not. So, I think that's where I'm worried because if we only focus on, "Oh, this one has invested, opened a new factory, there are new jobs," but this is a temporary profit. Because it comes due to the tension that will eventually hit us if we are not prepared to make our economy more resilient for the longer term. Okay, let's hope Tengku Zafrul will make a video about that.

51:36 I'm sure he has one… There really is this thing. I think there is. He just hasn't made a video yet. I want to suggest... because that day, Kian Ming had a fight with Dato' Seri Nazri. We all feel completely at fault. Both are our friends, right? Kian Ming is our friend; Nazri is also our friend. So, perhaps as a continuation of what we discussed earlier, there may be signals from America that are not so good about PMX's rhetoric regarding Palestine. Our efforts may involve increasing PR with the United States. This relates to the successor to Dato' Seri Nazri Aziz as ambassador to the United States.

52:21 Kian Ming gave five names? But those five names are all like… Aren't they great? No, it's not that they're not good. Great, great. There are our friends among them too. But maybe they don't want to. Or some outright reject it, like Zafrul, who rejected it because he wanted to contest the election. But there is one name that I also want... Because according to Kian Ming's criteria, Kian Ming's criteria stated this person must have direct access to the PM (Prime Minister). So, he said if he doesn't have direct access to the PM, then he is not qualified to be an ambassador. That person. Ha, he doesn't have WhatsApp. So, he said he should have direct access, be able to communicate important information regarding bilateral relations, be able to give recommendations on how best to engage with Trump,

53:12 and also be able to recommend strategic policy positions and be able to engage publicly. I think the most suitable person to be nominated as Malaysia's ambassador to the United States is Datuk Seri Shamsul Iskandar Mohd Akin. Is he the best? Yes, yes. He contested in Bagan Datuk; he lost by 300. And I mean this. Because many people don't know, but Sam, Dato' Shamsul Iskandar and I, we are part of a group. Oh yes, I see you all together sometimes. Yes, we always go abroad every year. ASEAN, ASEAN leaders and also Japan.

54:00 And I watched him perform on the international stage. Not bad. He, he, he's like. Because he has the image of a Malaysian political street fighter. He's a political operator, you know. He, he, he's like, he likes to be friends with everyone. Then, then he said, okay, I'll make sure, I'll tell my Prime Minister, blah, blah, blah. I am very impressed by Dato' Shamsul on the international stage. But do you think it's a downgrade from being the Prime Minister's right-hand man to the American Ambassador? Which one is more important in life? It depends on what point in life he's at. Right. If he sees that, it's because there will be a new PKR election. Coming up in a few months.

54:48 If he feels that he wants to take a break from that, then I think he would be a good ambassador for Anwar (Ibrahim). He has Anwar's trust. And I saw him interacting on the international stage. He's quite effective. I mean, this is a serious point. Okay, yeah. And I think there might be blowback from the career diplomats. You know, my father was a career diplomat. Why is it necessary to give it to politicians? But for certain postings, at certain times, you need a political message carrier who is more than just a regular ambassador. You know, this is the Prime Minister's right-hand man. I think during Dato' Seri Najib's era, the late Tan Sri JJ, was that kind of character.

55:34 Okay, maybe just the last one, Shahril. Before we... Maybe in passing, KJ mentioned the PKR elections. But there are two parties that are going through and have gone through their elections. PBB elections, United Bumiputera Party. This is GPS basically, the main party in Sarawak. Under the GPS umbrella. The position of PBB president, the highest position, remains held by Dato' Patinggi Tan Sri Abang Johari, the Premier of Sarawak himself. So there is no competition for the position. He has received support from all 82 branches of PBB. So I want to tell people who might not be familiar, PBB is a merger of

56:21 the Bumiputera Party and the Pesaka Party. Bumiputera Party, for Melanau, Malays and so on. Pesaka Party, for the Iban and other ethnic groups. And it is combined, but there are certain positions that are reserved based on wings, right? So the Bumiputera Party will get their own quota, Pesaka will get their own quota, but everyone will vote. So mostly maintained, except for a little surprise, namely Dato' Sri Abdul Karim Rahman Hamzah. For the position of vice-president of the Bumiputera wing of the PBB Party, Dato' Karim is one of the quite famous, quite powerful people in Sarawak.

57:07 Who is quite vocal too. If I'm not mistaken, in 2023, he also had a verbal argument with Dato' Alex over the Palestine issue. Because there were proposals to take in Palestinian refugees and so on. Alex seemed to disagree; Karim argued openly. Quite aggressive and is famous for that style. But he's a strong political operator, from my understanding, but he lost here and was replaced by, among others, the one who got the highest number of votes, Dato' Ibrahim Baki. Becoming the most senior vice president. And this is the first time he competed and came out on top. So from afar, I can read a little, more or less, maybe KJ knows better than me, Dato' Ibrahim is quite close to the Premier.

57:53 So the Premier gets the highest position. So this is basically the Premier sort of consolidating his position in that party. But I also have a view that when I first studied it, even the late Dato' Tok Nan did not win in the PBB election. So maybe this PBB election won't be like the UMNO election. If it's an UMNO election, if you lose, it means you're finished. But maybe in Sarawak it has a slightly different culture. And even if Dato' Karim loses in this matter, his career doesn't necessarily end there. He can still have a comeback; there is still a way to return. I see that Sarawak's political art and PBB, maybe we are less knowledgeable, but it seems a little different from that in the peninsula. The Premier also said that Dato' Karim will remain in the state cabinet.

58:39 Yes, there are also DAP elections that will take place this March. There seems to be a generational shift, several veterans such as former ministers, Kula, Tan Kok Wai, Fong Kui Lun, all of them former MPs like me, among the MPs who have announced that they will not contest the central executive power election and perhaps the focus will be on a proxy war, a proxy fight between what is known as the Anthony Loke-Nga Kor Meng pairing, the new generation, namely DAP secretary-general Anthony Loke and also DAP parliamentary leader Nga Kor Meng, compared to those who are close

59:27 to the families of Tan Sri Lim Kit Siang, Lim Guan Eng and also his younger sister Lim Hui Ying. I'm not sure if Shahril has seen the video or not. Recently, Steven Sim, who was once known as Lim Guan Eng's blue-eyed boy, who is said to have now carved out his own identity, went to dinner in Penang, one of the dinner gatherings. Chinese politics really revolves around dinner and there are supporters or even an aide of Lim Guan Eng has already shouted at him, calling him a traitor or something like that.

1:00:14 He said 'traitor' right? So this is again like PBB, we from the outside don't know much. Because there are many "wayang kulit" and I say "wayang kulit", not as a negative, but "wayang kulit" because we don't really understand. Maybe we can invite Ong Kian Ming to explain what is happening there. Just one thing before we go to the last topic, which is this generational transition. When I heard Kula, Tan Kok Wai, Fong Kui Lun all say they will not contest the CEC position, does Shahril see that the tendency of the older people in DAP to give way, is more so than in other parties, which don't need to be mentioned specifically?

1:01:05 I think in one word, yes, except for Lim Guan Eng. Because it seems he is still... in fact, all this tension revolves around whether they can move on from Lim Guan Eng or not. And it seems like he clearly still wants to contest the CEC. And the question is, if he wins the CEC, will he still be the DAP chairman? Even though it is not at the same level as the Secretary-General, it is still a big position. But yes, I think overall, yes. But on the point of Guan Eng, I just checked: He is 64 years old. In the context of Malaysian politics, he is very young. So I'm just trying... What about Kula and all this? I, someone google Kula's age. Kok Wai and Fong Kui Lun are older.

1:01:52 But the point about Guan Eng is this: Kula, Tan Kok Wai, and Fong Kui Lun, ok, Kula was once a minister. But he's not... he was never at the top leadership level. Guan Eng was at the top leadership level. When he was a minister, it was for only 22 months. So he seems to be dissatisfied. I mean, no, no, I'm trying to put myself in his place. You know, he didn't get his full time in the sun. But you know who is the best example of someone who didn't care about the time in the sun? His father. Tan Sri Lim Kit Siang. He is arguably the person who brought DAP to this level. But he was a parliamentary opposition leader for the longest time in the history of the Malaysian Parliament. When Pakatan won in 2018,

1:02:39 he didn't ask for a position. He was happy his son was there. Sure, but what I mean is, I think he gave way to his son. So Guan Eng can also say, "I gave way to my sister, I gave way to..." But why is he himself still... 22 months, he feels like... But the father had nothing. But his father had long been the leader of the opposition and was happy to see his son take over. You know, I think that was a sacrifice. But Guan Eng himself felt... And at that time, Kit Siang, I think, he was almost 80 years old in 2018. Because he had just celebrated his 84th birthday. But Guan Eng still feels that he's in his prime and he felt that he was denied that leadership role. He knew he couldn't remain as Secretary-General. In DAP, the system is the Secretary-General is number one,

1:03:28 compared to the chairman. But I think that... I think he thinks that there are years left in him as a leader. But how would it work, just to play it out, right? It seems that if he still wants to remain, because he was at the top of the party before, does that mean he wants to come back to be a Cabinet member? That's the... price? I don't know, but I think... So what's the relevance of just sitting at the CEC, right? Yes, it won't be like that. Unless he is content to be, using a French term, the "éminence grise." Someone with power behind the scenes. But I think it's more than that. Because I checked, he is 64 years old and definitely, you know, he feels that he still has room to contribute to the existing government.

1:04:20 But I also see that there is a very, very organized move from the new generation of DAP to ensure that they can move on from Lim Guan Eng and also what is known as 'the family,' or to use a pejorative that they are not happy with: 'dynasty.' The Lim dynasty. Can I just finish answering KJ's original question? I also want to ask KJ if he agrees or not. Even MCA, they have a faster generational transition. Maybe people don't focus on it because it is no longer a strong party like DAP or as MCA used to be. But I remember when KJ became the youth leader, the MCA youth leader at that time had already become president.

1:05:08 So the journey is indeed faster in MCA. I don't know if it's a coincidence that the two Chinese-dominated parties are faster or just those two parties. I mean, if you want to compare it to when I was the youth leader, when I was the youth leader for the first term, the MCA youth leader, Wee Ka Siong, had become the MCA president. PBB Youth leader, Fadilah, became Deputy Prime Minister. I became a podcaster. Anyway, last one, Syed Saddiq became a model.

1:05:54 Syed Saddiq likes to defend people who may need defending. That's crazy, man. Do you think our listeners and viewers know? Of course they know. How do they know? They're not all pop culture people. Okay, okay. Let's see in the comment section. Okay. So, but the serious thing is, the reason Syed Saddiq needs to be defended today is that he mentioned in the debate in the Dewan Rakyat that he had to become a model, a Malay traditional dress model, to donate money to the Muar constituency. I think you saw the thing, right? The question here, Shahril, is...

1:06:43 We have discussed this matter many times regarding parliamentary and government allocations over the years, whether in response to the opposition or in response to issues raised on 'Keluar Sekejap' regarding the allocations of these MPs, we always give the same answer. That is, if you want parliamentary allocations, and if you are a member of parliament from the opposition, whether Perikatan Nasional or an independent like Syed Saddiq, then negotiate with the Deputy Prime Minister (DPM). In this case, it is not Datuk Zahid, but Datuk Sri Fadillah Yusof, the DPM, regarding the allocation. There may be certain conditions that the government wants to impose, and so on. We don't agree with that either. Shahril and I, I remember we discussed that there shouldn't be any conditions, it should be given automatically, but that's okay.

1:07:32 Saddiq is not like us. He said it's okay, if it's a condition, I want to discuss it. So he revealed that he had met Fadillah five times. He has met Fadillah five times. We are not sure what happened during his five meetings with DPM Datuk Sri Fadillah. But of course, Datuk Sri Fadillah has given the conditions and what Saddiq needs to do. And maybe Saddiq already agreed or knew about this. But still can't get it. So any thoughts, Shahril? Yes, just like we've said many times. He deserves it because he is the elected representative (YB) who won, and he deserves to champion the fate of the people and voters in Muar.

1:08:21 He deserves fair treatment. That's all. I don't think there's any need to complicate this matter. So if last year he ran away from Muar to Kuala Lumpur, at the beginning of this year, he would have become a model. Maybe at the end of this year, there will be good news, there will be *kompang*, *nasi lemak*, *nasi minyak*, and *bunga manggar.* Don't forget to call and invite us. And guests can donate to the Muar Member of Parliament's fund to develop this area. He is indeed creative. Our member is really creative. Okay, thank you.