Malaysia
Thursday, October 22, 1999
Hello
I've just found an Internet cafe in the largest skyscraper, called Komtar, in Penang (Georgetown). My virtual voyage web site project is coming along piecemeal. I haven't been able to upload anything to my web site but I am writing, photographing and videoing. I hope to edit and upload when I get to the states. Writing and thinking about countries and their interactions is enjoyable. The New York Time's foreign affairs correspondent Tom Friedman's work inspires me to write about how people and countries think.
Traveling with my parents is fun. They are good company and they have insights into ship life.
Your life sounds as busy as mine has been in the Field Office. Since the second and last big sale of trip is over, things should ease up soon. We scanned about 800 scantron forms, ran lotteries, printed and distributed "Statements of Confirmed Trips" yesterday. Each port involves some preparation but the big sales are now past.
The trip from Penang, Malaysia to Madras (Chennai) India takes about three days. It takes 8 or nine days to get to Egypt from Madras, then 2 or 3 days to Istanbul, and about the same to Dubrovnik, Italy, and Morocco. Although, it doesn't feel like it, we've been underway 38 out of this 100 day voyage.
I'm just recovering from a big cold, which came on after Viet Nam and Cambodia. We just arrived in Malaysia this morning, leaving Viet Nam 3 days. We spent about 9 hours anchored off Singapore refueling. We got announcements on board during the refueling not to smoke but some students smoked anyway - addictions are strong. Malaysia, a couple island of 20 million, attempting to industrialize and playing its own somewhat independent cards in the global market place, seems a little less interesting than the previous three ports - less 'big' or U.S. related history, fewer monuments, etc. We would have visited Indonesia except for its political instability. Malaysia wants to intentionally increase its population to 70 million by the year 2050.
One professor presented some statistics recently describing projections of world population growth in the next century which I found a little depressing. As you mention, the six billionth baby was recently born, continuing the trend toward 9 billion by the middle of the next century. The fact I found disheartening was that the developed world will stabilize its poplulation at current levels of about 1 billion while the rest of the developing world will support the 8 billion coming inhabitants. The divide between the rich and poor lands will grow. In China, Viet Nam, Cambodia and here in Malaysia, to some degree, we're seeing poverty.
Hope to be in San Francisco around December 30 or 31.
A Saturday in October October.23 1999
Georgetown, Malaysia is steamy and feels safe. Most people speak English and while it isn't rich, its prospects for economic growth are strong. Many well known San Francisco Bay Area and U.S. computer companies have established manufacturing sites just south of Georgetown. On the way to visit Dell computing on Thursday, I first saw an Intel factory, then Hewlett Packard, Seagate, Iomega and other U.S. high tech companies. This Silicon Valley of the east is located a stone's throw from the airport and in close proximity to Dell's parts' suppliers which contributes to a quick delivery time in Dell's "direct to customer" model. I'm presently flying to Kuala Lumpur to visit Yuen Lok Mok, my friend and studymate from Fettes College in Edinburgh, Scotland 23 years ago.
Sunday, October 24, 1999
I just returned from Kuala Lumpur where I met a friend I knew in Scotland whom I haven't seen for 23 years. I wrote Lok a post card before I left but got no response. We were study mates in 1977 at Fettes College. I got his address by writing Fettes and hearing back from my - what a surprise - old Housemaster, Mr. Preston, who is minding the Old Fettesian records.
I called Lok's number, which I got through a friendly Malaysian telekom office, yesterday morning and reached him. He had just returned from his honeymoon in New England. I flew to Kuala Lumpur from Georgetown, Malaysia and met him at the Bangsar Shopping Complex. Lok is now 1 of 4 owners of an accounting firm with 130 employees. Kuala Lumpur is a steamy tropical city, attempting to modernize quickly, but containing lots of poor areas. I only saw some of the new downtown buildings.
His house, in a Kuala Lumpur Chinese style, made out of brown, pink and adobe stone and tile, is very lovely with a view of the newly built tallest towers in the world, the Petronas towers. Mahathir, a strong arm politician with economic policies and tactics that have made him more feared in Malaysia and disliked by many other nations, built these new structures partly with the intention to put Malaysia on the world map.
This country is supposed to have good growth prospects in the next 20 years. Many Silicon valley high tech companies have made substantial long term investments based on prospects of favorable tax status, the potential for stable relationships with suppliers such as Intel and Iomega who have facilities in very close proximity to Dell and Hewlett Packard here, and proximity to air transport and 12 important southeast asian countries. Malaysia must have offered them good terms because so many big companies have a presence here.
Lok is very warm and outgoing, with slightly shorter hair than I remember and more than 2 decades of life experience behind him since we last saw each other. He used to play water polo, studied Maths, Physics and Biology and then took a degree in brewing at the University of Edinburgh. We used to listen to Beatles music, Eric Clapton and much other music. It was fun recollecting old friends and incidents. He is one of the main marketing people at his firm - he seals the deals which often focus on structuring intial public offerings - and his friendly personality would make him good at this. Most of his family live in K.L.;family ties are very important in Chinese society. He showed me a very warm welcome, taking me all around the city. I also enjoyed meeting his new wife Siew Ping, who was a little jet lagged after returning from the west. They live something of a high life, with Lok tending to buy what he wants when he wants - things such as Gucci bags and other fancy consumer goods. It seems as if many of his family and friends have BMWs. He also showed me hotels, bars and a nice restaurant - the somewhat innocent night life of K.L., a part of life I don't often explore. Fettes was quite an austere school where we wore tweed jackets, dress pants and shirts. Materialism wasn't on display in the same way I sensed it is with Lok now. He is very social and has many friends. As an entrepreneur he had many good ideas about how to seek out investment and financial advice.
We talked at some length about index investing and he invited a professional investor friend from childhood over to describe the the economic and miutal fund situation in Malaysia; we talked with for an hour or so. The Mutual Funds business is basically a marketing and distribution game, offering products that are basically similar to toothpaste and razor blades.
In Malaysia, the state plays a role in this economy which doesn't have a parallel in the U.S. Ninety percent of the country's assets are in the EPF, the Employees Pension Fund which is state controlled. Because of this, the prospect of a trading system where the government plays an insignificant role seems unlikely in the next few years. The government is unlikely to give up its advantageous position overseeing these assets. The market here is volatile and illiquid. Rules to make trading transparent and fair, which exist in the U.S., don't exist here and trading is very expensive, costing something like 1% per trade - i.e. each time one buys or sells. Lok's friend gave me the impression that the costs of rebalancing a portfolio on a regular basis to match the index that one is following, which is required in index investing, would make this kind of investing prohibitive. I got the impression that index investing based on the Vanguard model may be unfeasible although I would like to get a few more opinions. It's an interesting idea to take an index investing approach, successful in the U.S. and bring it to another country where it is untried.
Because of Lok's cheeriness and warm hospitality - which may be characteristic of people in Malaysia, I am very glad to have rekindled this friendship. He may come to S.F. in January. Malaysia is no longer the land of Indian culture of hundreds of years ago or under the yoke of the British East Indian spice trade, rubber and tin plantations. It's a country of 23 Million Malaysians, with about 55% of the population ethnic Malay, and the rest ethnic Chinese and Indian. Race tensions are very quiet these days; the Indonesian anger against ethnic Chinese - in the world's fourth largest country - is not spreading to Malaysia. The city state of Singapore is one of the closest neighbors and K.L. seems to reflect some of Singapore's intent to succeed but has faced a recent economic downturn which the 80 year old prime minister Mahathir needs to outlive if his somewhat repressive policies will be viewed in any kind of favorable light. The country may be on the rode to growth with or without him.
Most Malaysians, like Singaporeans, speak English which makes getting around this safe country easy.
Sunday, October 24, 1999
Dear Lok,
Great to see you after all these years. What a pleasant surprise to hear first Siew Peng's and then your voice on the other end of the phone yesterday. It was great fun to travel around K.L. yesterday and vist so many landmarks. Your house is beautiful. Thanks for the tasty dinner, teas and hot chocolate and thanks for your warm hospitality.