Economics

Peluang Keemasan Malaysia Pasca COVID19

Data daripada pandemik Spanish Flu tahun 1918 menunjukkan bahawa wilayah yang mengenakan kuarantin yang lebih ketat dan kembali beroperasi lebih awal akan menjadi lebih kaya. Malah, wilayah-wilayah tersebut akan menjadi lebih kaya lebih pantas daripada sebelumnya.

Logiknya mudah sahaja, orang kaya masih ada duit dan mereka memerlukan tempat selamat untuk melaburkan duit mereka. Apabila tidak banyak pilihan, kekayaan yang ada akan tertumpu kepada beberapa tempat sahaja.

Dalam pakej stimulus COVID19 yang diumumkan Shinzo Abe, Jepun telah memperuntukkan USD2 bilion untuk memindahkan kilang keluar daripada China. Walaupun China adalah rakan dagang terbesar Jepun, mereka terpaksa mengambil langkah ini bagi menjamin kelangsungan ekonomi dan produktiviti mereka.

Di sinilah peluang Malaysia untuk meraih keuntungan hasil kawalan ketat terhadap penularan COVID19. Memindahkan kilang bukanlah perkara yang mudah, banyak faktor yang perlu diambilkira antaranya kestabilan politik, bekalan tenaga elektrik dan sumber manusia yang berkemahiran. Malaysia bukanlah destinasi yang asing bagi syarikat-syarikat Jepun dan mudah untuk memenuhi kriteria yang diperlukan.

Ramalan James Canton tahun 2015

Dua tiga tahun sebelum COVID19 sekalipun Jepun sudah terdesak untuk mencari tempat untuk melaburkan wang mereka sehingga menawarkan pinjaman pada kadar negatif. Indonesia antara negara yang mengambil peluang tersebut tetapi dalam keadaan sekarang pasaran mereka akan tertutup paling tidak sehingga hujung 2020.

Singapura pula berhadapan dengan letusan penularan COVID19 di kalangan pekerja asing dan ini memberi kesan besar terhadap produktiviti mereka. Malah sebelum letusan kes tersebut, PKP yang dikuatkuasakan Malaysia telah menjejaskan operasi bisnes dan kilang mereka.

Trend untuk mengeluarkan kilang daripada China bukanlah perkara baru dan tidak terhad kepada Jepun sahaja. Ada banyak faktor yang menolak para pelabur keluar daripada China.

Pertamanya, kebergantungan yang terlalu besar terhadap rantaian bekalan dari China telah dilihat sebagai risiko bisnes sejak 2-3 tahun kebelakangan ini. Rantaian bekalan dilihat terlalu rapuh apabila bergantung kepada China semata-mata. Kos gaji juga tidak lagi murah apabila China semakin kekurangan anak muda untuk bekerja di kilang. Belum lagi masuk isu pelanggaran dan pencurian harta intelek yang berleluasa di China.

Label COVID19 sebagai Virus China juga akan membawa trend ‘Not Made In China’ terutamanya di kalangan negara-negara Barat. Ini mungkin alasan paling tidak rasional untuk memindahkan kilang keluar dari China tetapi kuasa pembeli adalah satu faktor besar dalam keputusan bisnes.

Peluang ini hanya sekali dalam satu abad – politikus, penjawat awam dan orang bisnes harus mengetepikan perbezaan fahaman dalam merebut peluang ini. Segera rancakkan kembali ekonomi Malaysia dan negara ini akan menjadi lebih makmur dari sebelum ini.

Gig Worker vs Freelancer

Gig Worker vs Freelancer
Gig WorkerFreelancer
Skill LevelLowMedium to High
Ownership of Means of ProductionPlatformWorker
Pricing PowerNo PowerSet Own Price
Wage TrendDefinitely Going DownVaries according to market demand
Able to Choose CustomerNoYes
Skill DevelopmentNoYes
Require Higher Education?NoMaybe

Another thing I notice is that for Gig Worker the skill is never offered as a diploma or degree. For example, there’s no degree for taxi driving but there’s a degree in graphic design. Likewise there’s no diploma for food delivery but there’s diploma for culinary arts.

The Flip Side of Inequality

Although the term is usually discussed under a negative light, understanding it can bring positive effect to your business.

The usual thinking is that if you have a service that sells for RM1000 per month then you search for 10 clients to earn RM10,000 per month. But the thing is, this route is usually very hard.

Inequality dictates that for every client that can pay RM1,000 then there’s others than can only pay RM10 or RM100. But the opposite is also true, there’s other that will happily pay RM10,000 or RM100,000 for the same service.

It sounds weird, but it’s true. It’s easier to find one client that’s willing to pay exponentially more rather than several clients that will to pay the same amount.

Cost of Accessing the Market

Cost of Accessing the Market

Of course you can just open a stall in front of your house selling nasi lemak. However, most likely there will not be enough customer.

If the Internet can really save you then at least you’ll need a smartphone and a data plan. That will cost at least RM700 for a decent Xiaomi smartphone and RM30 per month for the cheapest Umobile data plan.

To start receiving money online you’ll require a basic savings account from any local bank. CIMB or Maybank will be a safe bet. The initial deposit is around RM250 – RM300.

Please tag me @belart84 if you use this photo in Instagram, or post a link to my page unsplash.com/@belart84 if you use it anywhere  else 🙏🏻
Photo by Artem Beliaikin / Unsplash

Even if you don’t plan to sell anything many employer will require you to have a savings account. Probably you can search for jobs using your smartphone.

So at the very least you’ll need RM1000 initial outlay plus RM30 per month.

If you want to go full fledged eCommerce then you need to register an enterprise. That will cost around RM100. Then the company current account will require RM100o to RM2000 initial deposit.

eCommerce site can’t be effectively managed from a smartphone so the very least you’ll need a second hand laptop. That will add another RM3000 to the cost.

Factor in hosting and domain then you’ll need another RM150 per year.

Thus, even if you have all the required technical skills you’ll need at least RM5250 to begin. That’s quite a lot!

Why Philanthropy Alone Can’t Fix Inequality

All Hands On Deck
Photo by Perry Grone / Unsplash

I think for the first time ever someone from the 1% explicitly calls out philanthropy in relation to inequality. This is an excerpt from Abigail Disney’s testimony to House Financial Services Committee. Read the full statement here.

Philanthropy is often offered as the answer to the problem of inequality. While wonderful, philanthropy is not the answer because these problems are not a question of personal choices or individual behaviors. They are the consequences of structures that create and then enforce a deeply unfair and inequitable society.

Philanthropy offers a man a fish, even teaches a man to fish, but persistently fails to ask why the lake is running out of water…

Philanthropy offers a man a fish, even teaches a man to fish, but persistently fails to ask why the lake is running out of water, or why the man does not know how to do what his ancestors knew perfectly well how to do and did every day.

Philanthropy supports art and education and many indispensable cultural institutions, and we should all be grateful to the donors who take this job on. I do not question the generosity it entails.

Philanthropy that helps the poor is in many ways an even more admirable form of the art, because it offers benefits that the donor cannot possibly enjoy him or herself.

But in attempting to address the consequences of deeply unfair economic structures—the very structures, in fact, that make philanthropy possible—even the most generous charitable giving uses the master’s tools that can never dismantle the master’s house, to borrow a metaphor from Audre Lorde.

Even if philanthropy could face its fear of asking where all the money is coming from, it still cannot work at large enough of a scale or in enough unison to address the problems I am talking about. Even the largest philanthropy is dwarfed by government programs like Head Start, Food Stamps, Social Security and Medicare, each of which has proven effective and has already lifted many millions out of poverty.

Nassim Nicholas Taleb’s Rule of Thumb in Assessing Opportunity

  1. Look for optionality, rank according to optionality
  2. Prefer open-ended payoffs, not close-ended
  3. Do not invest in business plan but people

I pay particular attention to rule number 2 because I think this is the part most people overlook. There’s two distinct payoffs;

i. “Bounded-left” — which is limited losses and;

ii. “Bounded-right” — which is limited gains

For example, when I opt for royalties translating Rich Dad Poor Dad the payoff is clearly bounded-left. I only need to spend 1–2 months plus some money to sit down & work at cafes. I’ve read the book years before so I don’t risk not finishing the translation.

Meanwhile, the payoff is more bounded-right for my publisher. They have to shell out licensing fees and fork out the printing cost. Let’s say the initial print run is 5000 unit. The best they can do is all 5000 units being sold.

Yes, they can print more units but they’ll need more money — preferably money made from the initial print run. As for me, I don’t have to fork out any money for any extra unit printed and sold. Heck I don’t even pay a single ringgit of FB Ads to sell the book. I just enjoy more royalties for each unit sold.

Fortunately for my publisher, the bounded-right payoff is not terminal. They still can reduce their exposure to loss and make their payoff more bounded-left. They entered into an exclusive distribution deal with a national bookstore chain for a few months. In return they are paid cash in advance for the whole lot of the initial print run.

Two years later, they have covered their publishing cost and made some profit. Now it cost them virtually zero to sell the book via Google Play. Without any printing cost to bear, their payoff is now bounded-left. And of course it’s doubly bounded-left for me!

Startup Styles Cheat Sheet

Team work, work colleagues, working together
Photo by Annie Spratt / Unsplash

After years of interviewing startups on The Dredger TV and lots of reading, here’s my summary of the three major startup styles.

Know your poison, pick your poison.

Rework (Jason Fried)Lost & Founder (Rand Fishkin)Zero to One (Peter Thiel)
Artisanal SaaS – Intentionally smallEnterprise SoftwareHyperscale Platform – Requires rapid growth
No VCVC Backed – Not OptimisticVC Backed – Highly Optimistic
Not Selling – No Pressure to ExitFaster Exit BetterNever Sell When You Can Get Bigger
Flat Organization – Full Remote Work PossibleRequires C-Suite to Function. Office in Major City.Global Footprint. Prominent Founder.
Work CalmlyCorporateCult
LLC / LLPPrivate Limited going to Public ListedPublic Listed
Simple Product – Simple PricingMultiple Product OfferingMultisided Platform
Profitable from Year 1Modest Profit After Achieving A Certain ScaleGo Big or Go Home. Profit Only Possible by Market Monopoly

Building a Brigther Economic Future for All

Few would argue that capital is an essential element to launch a successful business. No matter how great the idea and skill of the founder, it’s impossible to bring a business to life without some form of capital. We celebrate startup founders who managed to raise seed capital, Series A, Series B and so on. The public clamour over hot new IPO. Politicians boast FDI number on the campaign trail.
We trade tips how to write a winning business proposal. Hunt for the grants no one else knew about. Learn how to make killer elevator pitch to wow top investors.

However, we don’t talk about the fact that capital costs differently to different group of people. They might be charged higher or outright denied because of their race, country or socio-economic status. Blacks in America were redlined by banks, denying them mortgages to buy properties. Cheap capital in Taiwan and China pushes up property prices in Malaysia, outmuscling locals. Apply for deposit assistance from government and banks will charge you a higher interest rate. People who are rich enough to open private limited companies enjoy tax deduction for their interest payment – effectively lowering their capital cost.

The Myth of the Inevitable Disruption

This also begs the question whether the Post-Industrial revolution that is underway are really driven by technology. The technology created didn’t really defy physics to warrant such a rapid pace of change. Is it actually more a form of arbitrage – financial engineering to exploit access cheap capital to buy market share?

Hypermarket killed small mom and pops store by out-pricing them. They also bully their supplies by demanding lower price and paying later. Giant online retailers seemingly just scale up this pattern to a larger scale. They even went as far as discounting their supplier’s goods without their consent and subsiding the price difference. Nothing is too expensive in their quest to dominate the market.

Uber also kills taxi by subsidising each ride. Buying market share with other people money, delivering service with other people effort yet absolving any responsibility from the services sold.
The software that run these ‘platform’ companies could be duplicated within days by a highly motivated team of developers. Compared to the size of the company, the technology is relatively skin deep. But the sheer scale of their operation made it easy to tout Big Data as their secret sauce to their success. It also helps that the financial sector is head over heels on Big Data – hailing it as their next weapon for continued growth.

Lost?

How do we end up here? More importantly, what is the new path we should take?
The Big Data techno-babble is just an outgrowth of the obsession to quantify and control risk. Big Data to analyse investment opportunity and taking advantage of price fluctuation. Also getting into the head of consumers to ensure they keep on buying stuffs yet still pay monthly mortgage instalment.

Every aspect of finance and business are being digitized in order to feed the Big Data machine. Yet, more noise than signal is generated by the machine. Up and coming trends are still hard to spot and sure-fire investments turns sour. The brief bitcoin bubble is a grim reminder that human made machine are still blind.

Banks are hard-wired to ensure the amount of their profit. They’ll do anything to secure it and get paid first. Whatever happened to their borrowers is beyond their care, as long as the interests due are paid. Student loans need to be paid regardless whether the graduate can get a job or not.

Thus their logic is of risk management. They fret about safeguarding their set profit. This inadvertently leads to certain bias. Loans are only given to ‘safe’ industries, properties in certain areas and to people of certain kinds. This behaviour also extends venture capital firm albeit manifested in a slightly different form.

Whatever had worked before, they want to put their money again. No wonder banks favour big established firm as opposed to new entrepreneurs. Venture capital firms meanwhile are hell bent to pattern match the next Mark Zuckerberg.

A generation before we celebrate the captain of industries, now we celebrate startup icons. Fan boy-ism and personality cult arise because deep down people realize that they need to act like those icons to get capital.

This create a distorted image that only an elite few should shape the market while the rest just work under them or be mere consumers and users. Local geniuses who saw how to lift his community through business are left out cold. All in the name of banking the giant global profit machine.

Invigorating Innovation

The risk management mentality only leads to concentration of wealth to the few. All are clustered to a handful of sectors and type of people. In short, local maxima that is hailed as a global champion.
Obsessing over managing risk as a probability of loss create few winners and many losers. It is interesting to note that the word risk came from the word rizq that convey the opposite meaning of probability of profit. As long as effort is expended, sustenance is guaranteed by God but from where and how much is by his grace.

Rizq nurturing should be at the forefront in kickstarting the economy. Risk management leads to dead end. Just look at Japan offering negative interest rate in a desperate bid to make capital flow and grow their economy.

Take note that rizq nurturing is not a version of gospel of prosperity which blatant donation will bring about miracles. God had prescribed a financial instrument in the form of Qardhul Hasan (interest-free loan) but it is still up to us to dispense with it wisely.

The interest-free nature of Qardhul Hasan serves at least two purpose; first it provides proving ground for new entrepreneurs and secondly encourages experimentation. Thus it will open up possibility to achieve the global maxima in business potential.

Many Muslims and non-Muslims alike are perplexed – where is the return of investment? Qardhul Hasan is actually can be regarded more as a form of pre-investment to validate and vet promising entrepreneurs and ventures. Only then the benefactor becomes investor through Mudharabah or Musharakah agreement to drive productivity and profit.

Granted, this model seems vague and messy compared to the neat spreadsheets used by financial institutions. High level of human touch are required – computers can’t be left to crunch numbers to pick winners. One need to be benefactor and mentor first before reaping the reward from investment.
This path is not to save big global banks and financial institutions. Instead is is for the local communities and common people. Instead of relying on elite global leaders, talents of local geniuses are to be unleashed in every community.

One Two Punch

Changing from risk management to rizq nurturing will profoundly affect education as well. Mass schooling came with the Industrial Revolution. ’Normal Schools’ train teachers to create cookie cutter graduates. These cookie cutter graduates in turn are easily turned into fungible human resources and consumers. They also faithfully pay monthly mortgage instalments. Profit is secured.

On the other hand, developing local economies demands a different class of graduates. More leaders and proactive initiators are needed because profit can only be realized through human qualities instead of sheer financial prowess.

Perhaps it’s a bit jarring to remark upon education in this manner. School in particular had always been perceived as altruistic – a virtue by itself. In fact, most people respond to carrot and stick of financial incentive. The current system rewards producing robot-like graduates so that is what being produced. To produce wholesome graduates requires the support of a system that rewards wholesome education.

Bottom line is, people matter. Or to be exact, each individual matter. Both the market and education must address the dignity and potential of each individual and not just a number among trillions of statistics.

Membina Masa Hadapan Ep. 1 – Kepentingan Future Studies

Apa itu future studies? Mengapa future studies sangat penting?
Dr. Zulkifli Hasan sudah menyebut sepintas lalu dalam ucapan beliau semasa Muktamar Sanawi ABIM ke-45. Kali ini kami duduk berbincang dengan beliau bagi meneroka lebih mendalam tentang Future Studies secara khusus dan cabaran Revolusi Industri 4.0 secara amnya.

Revolusi Elektrik Mencorak Bisnes Era Baru

Sekarang anda dapat lihat bersepah di sana-sini pondok telefon ditinggalkan dalam pelbagai keadaan. Banyak yang masih berdiri sudah tidak ada telefonnya. Di sesetengah tempat, pondok telefon sudah ditumbangkan terus menjadi hampas di tanah. Penembusan pasaran oleh telefon bimbit membawa kepada kematian pondok telefon.

Foto oleh David Blackwell
Foto oleh David Blackwell

Tidak lama lagi, stesen minyak akan senasib dengan pondok telefon. Sudah ada pemilik kereta Plug-In Hybrid yang tidak pernah ke stesen minyak sejak membelinya. Minyak yang datang semasa pembelian sekadar menjadi backup kepada bateri.

Oleh itu, mudah membayangkan tidak lama lagi tiada siapa lagi perlu pergi ke stesen minyak. Telefon bimbit membolehkan kita berhubung di mana sahaja. Kereta elektrik pula boleh dicas di mana sahaja. Cukup sekadar fakta bahawa setiap kereta elektrik boleh dicas di rumah – ibarat menukar semua rumah menjadi stesen minyak.

Business model akan bertukar tunggang terbalik. Pada masa ini stesen minyak menambah kedai, kafe, ATM dan pelbagai kemudahan lain bagi mengaut pendapatan daripada pelanggan. Untung menjual minyak hanya beberapa sen seliter tetapi menjual minuman dan snek pada harga tinggi adalah cara mudah membuat untung.

Apabila semua bangunan boleh bertukar menjadi stesen minyak, perkara sebaliknya akan berlaku. Kompleks membeli-belah, kafe, restoran dan hotel boleh menawarkan pengecasan percuma bagi menarik pelanggan. Sama seperti premis perniagaan sekarang yang menawarkan wifi percuma bagi menarik pelanggan.

Sama seperti pondok telefon, stesen minyak akan mengambil masa untuk pupus sepenuhnya. Kenderaan berat berkemungkinan besar akan terus menggunakan minyak dalam sedekad dua lagi. Ketumpatan tenaga yang ditawarkan oleh petrol & diesel dalam mengangkut barangan berat masih sukar ditandingi.

Syarikat penerbangan juga kemungkinan besar akan terus bergantung kepada minyak. Boleh dibayangkan bahawa sektor ini akan menjadi kubu terakhir penggunaan minyak. Namun, permintaan yang berkurangan daripada sektor dan industri lain bermaknan harga minyak yang semakin murah. Tambang pesawat akan menjadi lebih murah dan membuka ruang penerbangan kepada lebih ramai orang.

Tingkah laku pelanggan akan berubah seiring dengan transformasi persekitaran ekonomi. Penerbangan akan menjadi semakin meluas. Kos memandu yang lebih murah pula akan menyebabkan masyarakat lebih banyak bergerak. Oleh itu, pelancongan domestik dan antarabangsa akan meningkat.

Business model baru akan muncul dan yang sedia ada akan menjadi lapuk. Sebagai contoh, pemaju hartanah boleh mendapat pendapatan pasif dnegan memasang panel solar pada rumah yang mereka bina. Rumah-rumah dijual tetapi pemaju mengekalkan hak terhadap panel-panel solar tersebut. Tenaga yang dijana boleh dijual terus kepada para pemilik rumah atau diual ke grid utama.

Lebih mendasar lagi, kebangkitan tenaga hijau akan mengubah dinamik bekalan dan permintaan pasaran tenaga. Tidak seperti bahan bakar fosil, solar dan angin tidak terbelenggu dengan zero-sum economics.

Mengekstrak bahan bakar fosil dari perut bumi memerlukan modal yang besar. Membuka lombong arang batu atau membina pelantar minyak memerlukan berjuta-juta. Kosnya hangus dan kegagalan untuk mengekstrak dan menjual bahan bakar fosil secukupnya akan membawa kepada kerugian besar. Apabila sudah habis dikorek, pelaburan tambahan diperlukan untuk mencari sumber baru.

Panel suria di rumah pula hanya berharga beberapa puluh ribu. Jika tiada aral melintang, panel suria tersebut sudah pasti menghasilkan tenaga untuk dekad-dekad yang mendatang. Sesetengah pengeluar memberi jaminan kapasiti pengeluaran hanya akan jatuh 5% dalam 20 tahun. Apabila kos pembelian dan pemasangan panel solar tersebut sudah balik modal, pemiliknya kini mempunyai sumber tenaga percuma dan menyntik limpahan dalam pasaran tenaga global.

Limpahan bermakna kartel tidak lagi boleh memanipulasi pasaran. Terdapat terlalu banyak pemain dan bilangannya bertambah setiap hari. Ini menjadikan sebarang pakatan hampir mustahil. Pasaran tenaga akan semakin jauh dari permainan zero-sum di mana bekalan kepada satu pihak bermakna satu pihak lain tidak mendapatnya. Perkara lain pula akan menjadi rebutan antaranya bahan mentah untuk membina panel suria dan bateri.

Namun itu pun tidak sepenuhnya zero-sum kerana apabila bahan tersebut telah menjadi panel solar ia akan terus menghasilkan tenaga. Bila sudah rosak, boleh dikitar semula. Tidak seperti bahan bakar yang akan hangus apabila digunakan.

Perubahan ini hanya sekelumit cuma daripada apa yang akan datang. Menggantikan keterbatasan sumber dengan limpahan akan menjungkirbalik pemahaman kita terhadap teori dan praktikal ekonomi. Persaingan tidak lagi menjadi perkara pokok dalam teori dan strategi bisnes. Perubahan ini akan mengubah hidup manusia dalam skala yang lebih dasyat berbanding revolusi industri.