Ramadan Karim

Assalamualaikum and Peace be Upon All,

It is now that special time of the year again :) Muslims throughout the World are now welcoming the Holy month of Ramadan, a blessed month where the 'final revelation' i.e. the Holy Book of Quran was revealed to our beloved prophet Muhammad S.A.W (Peace be Upon Him). This month we Muslims are ordained to fast during the day and encouraged to read the Holy Book of Quran and increase our ‘ibadat’ especially on the Sunnah deeds such as ‘Tarawih" prayers.

On this occasion I would like to wish the Muslims throughout the World “Ramadan Karim”. Let us utilise this holy month to make ourselves better Muslims and use this golden opportunity to make supplication to Allah Taala for the betterment of the Muslim Ummah.

For this Holy Month let us supplicate “Allah Humma Innaka Afu’un Karim, Tu Hibbul A’fu Fa’fu anna” as many times we can because our prophet Muhammad used to supplicate this doa a lot especially during the last ten days of Ramadan.

Don't forget to say your niat to do your fast...

Wabillahi taufik Wal hidayah Wasalamualaikum Warah Matullahi Wabarakatuh, Peace be upon all.

What has the Beijing Olympics 2008 taught us?

The Beijing Olympics 2008 has produced many hot stories in the Media around the world, but for Bruneians, the hottest and the most important story was that of Brunei’s very public expulsion from the Opening Ceremony. That was indeed a sad day for Brunei.

From my understanding, “participating” in the Beijing Olympics 2008 does not necessarily mean having to have guaranteed-gold-winning-bruneian-competitors competing in the games. It would have been enough just to participate as an observer. Some people may argue that to actively compete is the sole purpose of the games. Well in my humble opinion, what is more important within the spirit of the Olympics is having our country’s name being proudly called out by the Masters of Ceremony (MC) and seeing that bright yellow-black-white-and-red in the stands and on the track or field. This would’ve let more people know about the existence of our small country and have it actually recognised by the World by being more than ‘that country that’s oil-rich’. This type of relatively-free publicity is priceless. Patriotism comes in many forms, there’s nothing shameful about not being guaranteed to win back home a gold medal, because the people who would have participated were our own homegrown children and I for one, am proud of their spirit, that desire to see Brunei’s flag proudly raised and swaying in the breeze, alongside the other proud nations who had united their fellow countrymen and women together in the spirit of the Games, in the spirit of patriotism. It takes a lot more to face defeat and failure than it does to win all the time and the bruneian competitors had not expected to win at this stage, but the possibility of winning was still there, slim chance though it is.

So now, after being expelled from the opening ceremony, what? Well, in my humble opinion, it is very important to learn from what happened. We should prevent the same thing from happening again in the future. After all, “Once beaten twice shy, twice beaten forever shy”. I love Brunei, there may be so many crap ATTITUDES in it but I remain determined to believe that somewhere in there, in each and every one of us who are Bruneian, whether they were born as one or permanently reside as one, there still exists that core that is fiercely proud of Brunei, regardless of gold or oil or riches OR tapau-fever. What makes Brunei into Brunei, is our stubborn determined spirit to survive and succeed beyond all the obstacles set in our way, we’ve gone through wars and occupations, we’ve had our country cut down into a small land area compared to what it once was out of necessity, we’ve had to deal with irksome people who think we’re ‘part’ of Malaysia or Indonesia or Africa or Myanmar and now we are facing the shame, the utter utter shame of being called out on global-wide media of being expelled from the Olympics. So I say we push on, of course I am NOT condoning those who had been responsible for lacking the foresight to use the Olympics as a mechanism to catalyse and instill a deeper sense of patriotism in our people, especially the young, but most of us with no power to punish those people would do better to pool our energies towards a better Brunei, in many more ways than one.

There is a book called “La Tahzan” which translates as “Don’t be sad” in Arabic, in which we are taught that we should think positively despite what happened in life. This may be applied to us in the case of the Olympics Public Expulsion 2008. Although it was incredibly frustrating and utterly humiliating, and although it caused a huge dent in the patriotic Bruneian’s pride, what’s past is past and no matter how much we rant and rave and gripe, we still can’t do anything about it. All we can do is to learn from the past and come up with solutions to improve our nation. So, instead of breaking down, we should all keep our chin up and work together to turn this around. Blame games are all very well and in this case, seemingly well-deserved, but maybe we should try to turn this negative into a positive for the country, however far away this might seem.

I’ll close my thoughts on this matter by reciting a famous “doa” which asks Allah s.w.t to make it easier for us to deal with any problem, “Allah Humma Yasir Wala Tu’asir”, meaning, Oh Allah Make it Easy and Do Not Make It Difficult.

And on that note, Wabillahi taufik Wal hidayah Wasalamualaikum Warah Matullahi Wabarakatuh, Peace be upon all.

Investment Basics…

Assalamualaikum and peace be upon you,

First of all I would like to thank “Zai” on the request to what to invest? Whilst investment is an easy word to say, yet there are few things that we need to consider before making an investment anywhere. I like to remind everyone reading this blog that the information I am going to give you is based on the basics of investment taught in investment discipline. For now I like to highlight what we have to know before we invest. Before that I need to warn the reader that this blog is for educational purposes only so that you know the basics of investment, and if you want to make real investment you better consult professional advice.

In financial theory, there is a positive relationship between risk and return meaning the higher the risk the higher the return. Examples of higher risk higher return is debt financing investment such as in banking. If we see any bank offering higher return meaning that they are involve in higher risk investment. Another example of higher risk investment is gambling (but for the purpose of fearing God the Almighty we must abstain from this kind of investment). Further, currency exchange investment is also considered as high risk high return type investment because it depends on the volatility of American dollars vs foreign currencies in the world stock market. This type of investment is cumbersome to explain in one breath, nevertheless, if we have time I will touch on this issue in the future. Also there is special case of real life example that is Skim Cepat Kaya (Easy Rich Scheme), this kind of investment is very persuasive, and many people easily trapped on this kind of scheme because they are blind-folded with the rate of return shown to them. I strongly advise those people to avoid this kind of scheme because there are several cases that this kind of investment turns out to be a hoax.

A low risk investment on the other hand tends to yield lower return. Yet, this kind of investment is safe and guaranteed return. Examples of lower risk lower return investments are, fixed rate of saving (Banks called this term deposits).

In between we have investment instruments such as shares, debentures and bonds. In Brunei Darussalam shares can be obtained from private companies (please see the company’s article A and B on the right to get shares in the private company), shares issues using cross-listing such as those offered by previously known as IBB (Saham IBB). Also new evolution of shares is those shares issued by cooperatives such as KOWIRA, SOAS College cooperatives, Persatuan Pemilik Stesen Minyak and so on. If you have access to this group, it’s your opportunity to invest because it’s a guaranteed return, for sure every year we’ll get some amount of dividend from the business.

I’m not sure in Brunei Darussalam the practice of debentures is done openly, because it is only offered to some key people in the company. This is because debentures are the backbones of the company to ensure that the companies stay alive. They are the first one to receive some percentage of profit if the company makes profit and if the company’s goes bankrupt, the debentures statutory rights will not be affected. In other words, the company must pay them first.

Finally is the Bond. It’s not 007 or James bond. It is one type of investment product normally issued by government or big companies who borrow money from us. If we have bond it means that the government or company make promise to pay us what they have borrowed. Bonds is written in a paper containing promise from the government or big company to repay us back the amount they borrowed plus some interest or profit rate. So if you find an opportunity to buy bond whether from the government or big companies it’s a good way to expand your investment pools.

There is a way to balance risk and return in investment. That we called as pooled investment. This is done by combining (pooling) higher risk investment and lower risk investment into a pooled investment. However, this strategy requires higher dedication, so if we do not have time we can hire fund managers. I think banks nowadays have the service of fund managers for those who wish to make pooled investment. The advantages of pooled investment are since we have fund managers we don’t have to worry about our investment because someone is looking after it. However, there is some amount of service charge billed to us because no one does business for free. But its better than troubling ourselves thinking about the performance of our investment. A word of advice, in choosing the fund managers make sure we look at their expertise, background and make sure they are transparent to us on what they do. After all it’s our money.

Last but not least, first for the Muslims we must have faith in Allah that the “rizq” comes from Allah. Secondly I advice for the Muslims to recite Surah “Al Waqiah” every night because our prophet Muhammad (Peace be Upon Him) used to say “ Who ever reads surah Al Waqiah Allah will not let him/her in the state of poverty”. Return on investment does not necessarily come in the form of money, sometimes it comes in the form of happiness, tranquility and health.

To be continued…See you in the next issue…Wabillahi Taufik Wal Hidayah, Wasalamualaikum Warah Matullahi Wabarakatuh.

The Importance of “Prudent Spending” to Brunei

If one were to go and ask most administrative officers or finance officers about how to spend the money that we/our departments/ministries have been allocated by the government, most, if not all, would tell us that we must spend the money “prudently”. Quite often, during the tendering process, open quotations, etc, each and every evaluating officer will emphasise on "prudent spending".

So what is "prudent spending" exactly, and do we truly understand its concept?

First, let's get down to basics. The British meaning of what is "prudent" and what is "spending" has several meanings, depending on context. Being "prudent" can mean being careful, cautious, sensible, practical, wise, far-sighted, etc. Whereas "Spending" means to pay money, devote time or effort, pass time, and use something up. If one were to combine these words "prudent" and "spending" together, to become "prudent spending", in the context of using allocated funds, one may then understand that it means “a careful, cautious, sensible, practical, wise and far sighted spending”. The meaning is therefore very clear-cut and quite simple for everyone to understand.

Now, let's do a reality check…

Let's analyse what is considered as the 'normal practice' among evaluating officers in Brunei Darussalam. I'd have to warn you people out there that what has always been 'done' as normal practice does not necessarily follow the same thing as what is supposed to be in our Financial Regulations.

For example, generally, if we 'open our tender' for goods and services, this means we are inviting several bidders to bid for the goods and services together according to the given Specifications. This tendering selection process selects bidders who fulfills the basic Specifications. In the final selection process, evaluators usually will look at the “prices” offered by the bidders and grant the bidder who offers the lowest prices” as the winning bidder.

Now, i wonder, is this method of selection process which is according to the 'normal practice' really considered "prudent"? Many will say it is just because we pay less, thus 'save money for the government' and get the products we want within the Specifications. Well, perhaps we should think twice and look at it again...

From what I have always observed, it is always the 95%-at-confidence-level bidder who offers the lowest price tag who will most definitely be allowed to supply the tendered goods or services. Yet, i've seen evidence that these winning bidders, despite having fulfilled the Specifications, will, more often than not, supply us with lower quality products, which are easily worn out and therefore less durable. It is obviously not enough to merely look at their papers without doing a more thorough check of the products to really see their quality. Empirical evidence can be seen from government projects that were won by selected bidders who had used cheap products in the building projects, etc (I can't reveal which projects they are but they're out there). Some people will disagree but i invite you, please go and check the quality of the paint, tiles and toilets in some government agencies or departments…I think the people who work in the construction industry would know this is true.

My understanding of prudent spending is basically in one malay peribahasa which is “alah membeli menang memakai”, which literally means that although you have spent huge amounts of money on something, it is still worth buying. From my observations, many of the goods and services which come under the meaning of "prudent" as practiced by administrative officers and financial officers, do not last very long. In fact, if we take into consideration that the slightly higher price with higher quality will last much longer compared to the products with the lowest price and lower quality, we will come to the conclusion that it is more cost effective to go for the more expensive product in the long run. Thinking more deeply on the matter, at first glance we might think that we are saving or spending wisely as what the government wants us to do. Yet, it turns out that it was more "membazir” i.e. more money was spent, instead, because we had chosen the cheaper and lower quality products that ends up easily broken. Combine the cost of the products with the cost of replacing or repairing them once they become damaged, and the total cost of the products significantly increases higher compared to the total cost of the higher quality products that had, before, seemed like an unecessary expense.

The issue of "membazir" is also highlighted in the Quran in which Allah s.w.t states that those whom are given to wasting money are friends of Satan and Satan disobeys the Creator.

So to sum up…
Our understanding of what is considered as "prudent spending" needs to be in-line with what it truly means within its proper context and not necessarily according to "what is normally practiced by others". We adhere to our Financial Regulations which advocates to "berjimat cermat" i.e spend wisely. So, by "berjimat cermat", we must learn to spend wisely by being more far-sighted in our views, meaning, that eventhough the price of a product may seem slightly higher initially, in the long-run, it will be more cost effective and will save us more money, comparatively.

It is therefore very important and necessary for evaluators to obtain a much more vast knowledge of whatever they evaluate…so that they may come to a good and ethical decision.

As a rule of thumb, remember..

Allah s.w.t will ask us on the day of judgement, have we truly done what He had ordained us to do, did we make the proper ethical decisions and judgements in our lives, both socially or in our work environments, have we done our jobs the way the government pays us to do…

As they say, the devils are in the niggly little details..so be careful with your decisions in life because they will catch up with you in the end.