Mapping the Natural Rubber Value Chain in Malaysia

Happy New Year, everyone! It’s been a tumultuous end to 2021—the Philippines was ravaged by Typhoon Odette, Malaysia faced one of its worst floods in decades, several countries around the world were reporting and/or expecting a surge in Omicron infections.

The floods has triggered yet another wave of anger against the government, with frustrated Malaysians taking to social media to criticise officials for their incredibly slow response. Citizens and migrants are forced to help each another once again, this time under the #BanjirDarurat (Flood Emergency) campaign. Questions are also heating up on deforestation and the source of log jams in rural zones. As usual, we have the relevant social media data which we will explore in our next post under the Data and Analysis page.

For this post, a brief moment of happy news for us: in mid-December 2021, WWF released two reports exploring the sustainability issues surrounding the Malaysian natural rubber industry, both of which Segi Enam authored. What we found was that while the rubber supply chain is generally straightforward, the lack of transparency, traceability, and publicly available data makes it a difficult industry to evaluate when it comes to sustainability standards. Much of the root of the problem lies within the production system—for instance, smallholders dominate in this area and are typically not afforded the incentives to adopt more sustainable practices.

Segi Enam (WWF; 2021): Indicative map of rubber plantations in Malaysia based on the 2013-2014 dataset and maps retrieved from the Global Forest Watch (GFW) platform. Rubber dominant zones (dark green and mid-green) include: (1) Gua Musang, Kelantan; (2) near the Gerik, Perak-Southern Thai border; (3) Serting and Palong, Negeri Sembilan; (4) Lipis and Raub, Pahang; and (5) FELCRA/RISDA projects in Sarawak and estates in Sabah.

Read the full report here: Mapping the Natural Rubber Value Chain in Malaysia.

For the second report focusing specifically on the rubberwood sector: Addendum Report on Rubberwood

ChinaDaily: Jabs Key to Malaysia's Tourism Revival

Last week, ChinaDaily published an interesting piece by Prime Sarmiento on how vaccinations are the key to reviving Malaysia’s struggling tourism industry. The article follows news that the government is mulling plans for a travel bubble to Langkawi, a quintessential tourism region, for fully vaccinated individuals (note: the bubble comes into effect on 16 Sep 2021). Several experts have voiced cautious optimism for this move since, as explained by People’s Health Forum’s Dr Micahel Jeyakumar Devaraj, it is now no longer possible to maintain a zero-case policy in the country.

Photo: The Langkawi Sky Bridge by Manish Tulaskar/Unsplashed. Known as the Jewel of the Kedah state, Langkawi is one of Malaysia’s wildly popular tourist destinations. In 2019, the archipelago recorded 3.92 million tourist arrivals, raking in an estimated revenue of RM1.7 billion (USD410 million) to nearly 5,000 businesses operating on the island. Approximately 70% of Langkawi’s residents are reported to rely on the tourism sector for income.

Deakin University’s Dr Catherine Bennet emphasised the need for vaccinations, explaining that restricting travel to only fully-vaccinated individuals would lower the risk of serious illnesses even in a case of infections. This would mean continuously pushing for more and more people to get the jab—Segi Enam Advisor’s Khor Yu Leng has pointed out that this may not be a significant issue for Malaysia considering that vaccine hesitancy is relatively low in the country.

NEW! Khor Reports' PolTracker: Malaysia—1 Sep 2021

Debuting under our brand new—and long in the making—Products page, Khor Reports is proud to present our first PolTrackers report on the Malaysian political economy scene!

The [SAMPLE] Poltracker: Malaysia—1 Sep 2021 tracks hot topics and themes relevant to the Southeast Asian nation based on data obtained from social media and human-sourced intel. The 6–8 paged briefing includes: (1) questions about Prime Minister Ismail Sabri’s taking over for an embattled Muhyiddin; (2) Twitter Malaysia, e.g. hashtag protests and netizen reaction to the “new” cabinet; (3) eye on the opposition response, e.g. Mahathir's Council or Muhyiddin reform deal; (4) Covid worries persist; and (5) a Q&A session, including a 20-min session for subscribers.

Interested? Just add the report to your cart (it’s free!) and check out. Request for access and allow us one (1) working day to verify your email address before granting you access to the report.

Please note that the document is view online only.

BFM: Politics Roundup—Vote of Confidence, Muhyiddin's Appointment

It has been almost three weeks since the appointment of Ismail Sabri as Prime Minister, making him Malaysia’s second premier appointed during the Covid-19 pandemic. Together with parliamentary consultant Maha Balakrishnan and Merdeka Center programme director Ben Suffian, Segi Enam Advisors principal Khor Yu Leng joined BFM’s Inside Story for a 40-minute discussion surrounding the various political upheavals—and their long-term implications—the country has recently experienced: Politics Roundup—Vote of Confidence, Muhyiddin's Appointment

We round up on political developments by looking at the the ramifications of the Attorney General saying that there’s no need for a vote of confidence in the upcoming Dewan Rakyat sitting. Then, we explore what the larger impact of former PM Tan Sri Muhyiddin Yassin being appointed the chairperson for the National Recovery Council will have. And finally - we talk about what this all says about Ismail Sabri’s administration.

Image Source: zmpixes, Shutterstock; produced by: Tasha Fusil, Alia Zefri, Loo Juosie; presented by: Sharmilla Ganesan, Lee Chwi Lynn

BFM: Competency Needed in New Cabinet

Following his appointment as Malaysia’s Prime Minister, Ismail Sabri promises to announce his new Cabinet this week. As speculations abound on who will make it onto the administration line-up, one thing is for certain: competency from this new Cabinet is non-negotiable. Segi Enam Advisors principle, Khor Yu Leng, was on the BFM Morning Brief yesterday to join in on the discussion, including who the new Deputy Prime Minister might be and possible investor reaction: Competency Needed in New Cabinet

Khor Yu Leng, Political Economist at Segi Enam Advisors speculates how the new cabinet would look like and its size under Datuk Seri Ismail Sabri as Prime Minister. Would it be sizeable to appease all parties? And who might become Deputy Prime Minister(s)?

Image credit: Shutterstock.com; produced by: Arleen Webber; presented by: Shazana Mokhtar, Noelle Lim, Khoo Hsu Chuang

BTS of the BFM Morning Brief! Parti Warisan Sabah President Shafie Apdal joined the call for a brief moment in preparation for the next segment, Shafie: It Comes Down to Leadership.

BFM: Moving Forward with Challenges in Migration Issues

The US State Department released its annual Trafficking in Persons (TIP) report earlier this month, and in it was a damning development: Malaysia was downgraded from Tier 2 Watch List to Tier 3. The downgrade essentially suggests that the country has failed to fulfil the minimum labour standards and is not putting significant effort to do so.

An important issue for sure, BFM invited Segi Enam principal Khor Yu Leng to discuss the matter: Moving Forward with Challenges in Migration Issues.

COVID-19 has complicated migration, with a pause being put on migrant labour flows, and concerns about how this could worsen the problem of human trafficking. First, we find out how the pandemic has affected migration trends in the region. Then, we discuss Malaysia's downgrade to Tier 3 in the US State Department’s Trafficking in Persons report, and how this affects businesses. And finally, we hear what it’s like for migrants here in our country.

Image Source: John Salvino, Unsplash; produced by: Loo Juosie, Kelvin Yee, Azlyna Mohd Noor; presented by: Lee Chwi Lynn, Sharmilla Ganesan

#BenderaPutih Trending on Twitterjaya

As the country continues its movement order control—this time with seemingly no end in sight—Malaysians have again banded together to help each other without waiting for official aid, this time in the form of the #BenderaPutih (white flag) movement. A “sister” hashtag to last year’s #KitaJagaKita, the movement encourages those facing financial difficulties to reach out for assistance by flying a white flag at their homes without fear of humiliation (embarrassingly, like its “sister” hashtag, several politicians attempted to piggyback on #BenderaPutih movement, only to receive the outrage of netizens).

The online campaign has trended significantly on social media—data shows a relatively high usage of the hashtag in many major areas outside of Kuala Lumpur/Selangor, including Kota Bharu, Kuala Terengganu (east coast, Peninsula), Alor Setar, Johor Bahru (west coast, Peninsula), Kuching, and Kota Kinabalu (East Malaysia).

Heatmap showing concentration of #BenderaPutih usage across Malaysia. Note: map is indicative and not to, i.e. bigger than, scale

In comparison, social media attention on #BenderaPutih is significantly higher than some other related hashtags, such as #ProtesDarurat and #BantahDarurat, which cumulatively only received around 16,000 mentions since they were first used in October last year compared to #BenderaPutih’s 73,000 mentions (and counting) this week.

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Sources for aid/if you’d like to help (please note that this list is not exhaustive):

1. #BenderaPutih: Where to get help: MalaysiaKini has compiled a list of programmes that can provide help, which include locations of Shell petrol station food banks and 99 Speedmart’s grocery package programme.

2. Facing #BenderaPutih, Malaysians help each other with free meals, food baskets, free tuition, listening ear: The MalayMail has prepared a list of programmes which include free online tuition by Projek Didik.

3. #KitaJagaKita: #KitaJagaKita maintains a “one-stop shop” website of initiatives where people can either ask for or volunteer help.

Covid-19 and the Johorean Property Market

As the pandemic drags on, one obvious victim is real estate. Market outlook in 2020 have been unsurprisingly bleak, although experts have expressed cautious optimism for 2021 as some aspects within the sector gradually improve. Still, it would seem a relatively long way off until a more significant recovery occurs, as owners of property in Johor Bahru would tell you.

Channel News Asia’s Amir Yusof wrote an interesting piece on how the residential property market has been hit by the Covid-19 pandemic. According to a report by property consultancy firm Henry Butcher, Johor contributed 20% of overhang residential properties in Malaysia in 2019, making it the state with the highest proportion of unsold residential property even before the outbreak of the coronavirus. Segi Enam Advisors principal, Khor Yu Leng, contributed her opinion on the matter, explaining that:

“The spending power of the former Johor daily commuters and Singapore residents who visited Johor weekly or otherwise has diminished or disappeared from the Johor economy… A year later, with Johor’s economic umbilical still cut off from Singapore, and Malaysia suffering a big wave of COVID-19, informal social support activities (to help the lower-income households) have been ongoing.” 

Head over here to read the entire article: How Johor’s residential property market has been hit hard by COVID-19

BFM: Travel Bubble with Indonesia Gets Green Light

Segi Enam Advisors principal Khor Yu Leng was invited on BFM to give her thoughts on the recent developments in the trade relationship between Malaysia and Indonesia. This remains a highly relevant issue, especially in light of the recent meeting between Prime Minister Muhyiddin Yassin and President Joko Widodo, which saw the two leaders discuss various regional concerns, including the two countries’ ongoing defence of palm oil and the political unrest in Myanmar. Click on the following link to listen to the podcast: Travel Bubble with Indonesia Gets Green Light.

With Malaysia and Indonesia agreeing in principle on a Reciprocal Green Lane, we speak to Khor Yu Leng to understand if this would strengthen trade ties between both countries, and if this points to the re-opening of our economy internationally.

Image Source: Afif Kusuma, Unsplash; produced by: Adeline Choong; presented by: Lee Chwi Lynn, Sharmilla Ganesan

Malaysia-Indonesia Top Exports (4 HS code)

Top Indonesia exports to Malaysia

1. Coal, briquettes, etc.

2. Petroleum coke, bitumen, etc.

3. Palm oil and its fractions

4. Flat-rolled products of stainless steel

5. Copper, refined, alloys, etc.

Top Malaysia exports to Indonesia

1. Petroleum oils, etc.

2. Polymers of ethylene

3. Polymers of propylene, etc.

4. Semi-finished products of iron or non-alloy steel

5. Electronic integrated circuits

SCMP: Palm Oil, Trade, and Talks of Cooperation

Last Friday, Malaysian Prime Minister Muhyiddin Yassin met briefly with Indonesian President Joko Widodo to discuss several ongoing regional issues, one of which included a reaffirmation of the two governments’ intentions to combat against palm oil discrimination. This follows Malaysia’s recent move of filing an official complaint with the World Trade Organisation (WTO) against the EU for its anti-palm oil campaign.

SCMP reported the meeting between the Southeast Asian two leaders, and Segi Enam Advisors principal, Khor Yu Leng, was quoted. Here are her full comments:

“In Indonesia and Malaysia, palm oil remains a popular and even a hot topic in high politics. So we won’t be surprised if Muhyiddin and Jokowi touched on it when they met in Jakarta this week. Palm oil producing countries have formally set up a Council in Jakarta (CPOPC), but we’ve yet to see its muscle. We now have an ASEAN-EU ministerial level Joint Working Group on Palm Oil, whose first meeting was attended by Indonesia, Malaysia, Cambodia, Thailand, Laos, Vietnam (Philippines and Myanmar are also rising producers of palm oil). Indonesia’s big palm oil production has shifted policy leadership to Jakarta, which influences the market with its biodiesel mandate.

“Talk of cooperation wafts through these lofty circles, but this floats above the reality of cut-throat competition for export between dominant producers, Indonesia and Malaysia. Malaysia eyes its monthly export market share by tweaking its export duty relative to Indonesia’s. Earlier, the duo were inking bilateral FTAs with big importers so that relative tariff advantages would flip annual majority market shares from one to the other. Malaysia’s recent problems with US Customs and Border Patrol is seen as a boon to Indonesia exports.

“Moreover, Indonesia is quite ahead of Malaysia in trade negotiation with the EU. Vietnam’s recently inked EU trade deal is now in force and it has acceded to stopping forced labour, and we should expect Indonesia to do similar. Neither have the big immigrant labour force conundrums faced by Malaysia. Even with CPTPP in the bag, Malaysia’s trade (and labour) policy needs to find better footing as its ASEAN powerhouse neighbours eye more big trade and FDI deals.”