Consultants paid to sabotage, says Malaysia Minister

25 November 2015 Consultancy.uk

According to Malaysia’s minister of Information and Communications, international media consultants are being paid to orchestrate negative sentiment globally on the country’s government and economy, in a ploy to weaken the economy through “economic sabotage”, thereby undermining the democratically elected government.

In recent years the Malaysian currency has seen ups and downs. In the currency crises that affected many Asian countries in the 1997/1998 the Ringgit (the country’s currency) hit the lowest historical point against the dollar at RM4.73 to $1 dollar. At the time, president Mahathir Mohamad intervened and pegged the currency to the dollar at RM3.80, bringing some stability back to the market. In 2005 Malaysia, following China’s lead, unpegged its currency, allowing it to float semi-free and trend towards the value placed on it by the market – well below the RM3.80 mark.

In July this year however the currency for the first time broke through the RM3.80 barrier, and in recent months, starting on the 1st of August, the Ringgit rapidly depreciated against the dollar, and has since been pushed on through to the height of RM4.45.The reasons for the rapid depreciation of the currency remain relatively speculative. Different sources are circulating radically different explanations, even while the currency continues its downwards swing.

Malaysia, Kuala Lumpur

Political factors
One major cited cause of the rapid decline is controversy surrounding the 1Malaysia Development Bhd (1MDB) set up in 2009 during Prime Minister Najib Razak’s ascension to office. The fund was designed to turn Kuala Lumpur into a financial hub, and attracted a significant $11 billion in investment from banks and bondholders. In recent months the mega-fund failed to pay back its debts as planned.

As the fund appears to struggle to pay its debts, pundits have turned to questioning the funds’ construction. The former President Mohamad said that the fund lacks transparency and appears to be being used to fund a “lavish lifestyle” for Najib’s family. Investigative journalists from the Wall Street Journal recently added fuel to the debate, reporting that up to $700 million from the troubled fund has been funnelled into the personal bank accounts of Najib. In response to the claims, the attorney general implemented a special task force that raided the offices of the 1MDB and took away some documents. The investigation was scuttled shortly after however, when Najib removed the attorney general on health grounds. International focus from Swiss prosecutors has too been directed at the 1MDB with suspected criminal activity including "corruption of public foreign officials, dishonest management of public interests and money laundering". The FBI is also reported to be actively investigating the fund.

Earlier this year the Malaysian Public Accounts Committee (PAC) launched an investigation as to why 1MDB had dismissed its auditing firm KPMG back in 2012 and commissioned rival firm Deloitte instead to complete its 2013 financial year audit. To date, the PAC says it is still unsure on the motivation behind the switch of firms.

The result of the political crisis has been, claim some pundits, that trust in the Malaysian authorities has been undermined, with the resultant jittery activity of investors leading to large outflows of money leaving the economy.

1Malaysia Development Bhd

Economic factors
Other factors affecting the currency include the continued strengthening of the US dollar. In combination with the expected increased interest rates in the US, many speculate that emerging currencies – such as the Brazilian Real or Malaysian Ringgit – could be hit even harder in the coming years. As US interest rates rise, investors are expected, according to Hak Bin Chua, an analyst at Merrill Lynch in Singapore, to unwind their investments further in Malaysian Government bonds. Further economic fundamentals affecting the slide have been attributed to the decrease in demand for Malaysian export crops, notably Palm Oil.

Political motivations
The Malaysian Government itself points towards the role of speculators, whose aim, according to Communications and Multimedia Minister, Datuk Seri Salleh Said Keruak, is to use economic forces to destabilise the democratically elected government. In his view, foreign “media consultants” are spinning stories to force a decrease in investor confidence, which would in turn create a vicious economic cycle, bringing the country to its knees – and the political apparatus out of power.

According to Salleh the 1MDB scandal is being used to further political ends. Calls from various parties about the on-going political crises are: "[…] not only mischievous but treasonous as well. Economic sabotage, especially one that is engineered and financed by Malaysians, is without a doubt an act of treason," Salleh says. "To strengthen this allegation, there are even efforts to attack the Ringgit to 'prove' that the world has totally lost confidence in Malaysia.” He adds that these traitors must be exposed and appropriate action be taken against them.

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Project management industry adds £156 billion of value to UK economy

15 April 2019 Consultancy.uk

Project management has grown into one of UK’s largest areas of business over the past decade, amid the increasing ‘projectification’ of work. With the gross value added to the UK economy by project management estimated to be £156 billion, this trend is likely to continue in the coming era.

Despite the huge success of project management in recent years, until now there has been relatively little data available on the size of project activity. As a result, there has been a great deal of debate on things like the number of people involved in the sector, the number of projects, and how it contributes to economic output. Due to this need for clarity, APM, the UK’s professional body for project management (the largest organisation of its kind in Europe, with 28,000 individual members) commissioned economists from PwC to shed light on the industry's economic impact.

The research concluded that the profession makes a more significant contribution to the UK economy than the financial services sector. 2.13 million full-time equivalent workers (FTEs) were employed in the UK project management sector, generating £156.5 billion of annual gross value added (GVA). In comparison, the financial services sector contributes £115 billion, and the construction industry adds £113 billion.

Gross value added to UK economy

Commenting on the discovery, Debbie Dore, Chief Executive of APM said, “Project management runs as a ‘golden thread’ through businesses, helping to develop new services, driving strategic change and sector-wide reform.”

Who is a ‘project manager’?

To reach these estimates, PwC’s researchers used detailed models to map out the value of project management activity. They ultimately defined relevant ‘projects’ as “temporary, non-routine endeavours or rolling programmes of change designed to produce a distinct product, service or end result… [with] a defined beginning and end, a specific scope, a ring-fenced budget, [and] an identified and potentially dedicated team with a project manager in charge.”

Building on this, they then went on to define what the act of project management actually is. The job consists of applying “processes, methods, knowledge, skills and experience” so that clients can meet their objectives and bring about planned outputs or outcomes. The analysts added that this includes “initiating the project, planning, executing, controlling, quality assuring and closing the work of an identified and dedicated team according to a specified budget and timeframe.”

Importantly, it should be noted that the profession is not exclusive to only roles explicitly labelled as ‘project manager’, but to any role where specialist project management skills are used. This means that across sectors these roles can have very different titles, from the self-explanatory contract managers of procurement, or the campaign managers of advertising, to the likes of festival co-ordinators in the events sector, and many more. The roles in question also span all strategic levels of the profession, from strategic to tactical and operational positions.

Gross value added of project management profession

From a sector perspective, the financial and professional services, construction and healthcare industries make up almost two-thirds of the total project management GVA. At the same time, understandably, the UK Government has a huge project portfolio, which further drives the size of the GVA the sector contributes, thanks to megaprojects like HS2 and Crossrail.

Commenting on this to the report’s authors, Oliver Dowden, Minister for Implementation remarked, “Project delivery is at the heart of all Government activity, whether it’s building roads and rail, strengthening our armed forces, modernising IT or transforming the way government provides public services to citizens. Getting these projects right is essential if we are to ensure that we build a country that works for everyone.”

Throughout 2019, 26 major government projects were delivered, representing a fifth of the overall Government Major Projects Portfolio (GMPP) of 133 projects. According to the IPA annual report 2017-18, these represented a whole life cost of £423 billion. In addition to this were a plethora of smaller scale projects, and those in early development.

Elsewhere, with the increasing digitalisation of the economy impacting entities of all shapes and sizes, IT and digital transformations tended to dominate the projects of the UK scene alongside new product development projects, with a respective 55% and 46% of organisations in the research sample having undertaken these types of project in the past year. At the same time, this varied across sectors, and unsurprisingly, in the construction and local government sectors, fixed capital projects were the main project type undertaken.

Outlook

Looking to the future, 40% of business leaders expect project management will grow in the coming years due to the increased use of projects – or the ‘projectification’ of the UK. In a trend that has been witnessed elsewhere, organisations have to rapidly and continuously change in the digital age of business, driving the need for project management.

Outlook for project management services

An increased focus on value over cost – especially in the construction sector – and a forecast increase in the number of international projects are predicted to be key drivers of growth, according to the expert contributors. However, this will not happen in the absence of challenges; more than half of organisations expressed concern over the perceived impact of political uncertainty in the UK. Skills and capability shortages were also cited as a potential barrier by a third of organisations.

With regard to budgets, meanwhile, a third of those surveyed by PwC said they expect the size of project budgets will increase in the coming three years, while 40% anticipate a growth in project size. As the profession continues to mature, and as the recognition of the importance of good project management grows, it is expected that a greater proportion of project work will gain more distinct attribution to the profession itself, giving more recognition and appreciation to the role of the project manager.

Speaking on the findings of the study, Sandie Grimshaw, a Partner at PwC, concluded, “The project management profession is relatively new compared to some other professions, such as lawyers, teachers and doctors. However, as project management is a core competence vital to organisations in the UK, the profession is critical and will continue to grow in stature.”