The Malaysian economy: Argument beyond corruption — Wan Hong (Loyarburok.com)

The Malaysian economy: Argument beyond corruption — Wan Hong (Loyarburok.com)
Another big weekend for Thailand — Nicholas Farrelly (New Mandala)
Love still exists — Sin Chew Daily
Approval rate and inflation rate — Lim Sue Goan
GM reshuffle to test Opel CEO’s turnaround skills
One man’s rubbish, another man’s artwork

Posted: 21 Dec 2013 05:00 PM PST

DEC 22 — rom national news front pages to alternative online media sites to kopitiam talk, the Malaysian economy seems to be a topic of conversation that pops up from time to time. And I have realised that once on the path of discussing our economy (insert jargons like fiscal consolidation, national sovereign debt and such here), at one point, the conversation will tend to gravitate towards the issue of economic corruption. Over teh tarik and roti tissue, we bemoan about how Datuk so-and-so has so many millions, alleging figures and numbers of ringgitthat has been drained out of our economy.

But I wonder, from an economic point of view, if hypothetically all this 'money' that has been allegedly stolen by cronies were to be returned to the country, would Malaysia then have what it takes to achieve a truly high-income developed state?

Notwithstanding corruption, which is seen to be and is a serious national issue, my point here is to discuss about Malaysian economy beyond the sighs of corruption. I want to provide an economic framework to think about the economy and hopefully gain some insight, and not end the conversation with the typical lament about how corruption has hurt the economy.

Let us talk about economics.

To those uninitiated, it is indeed puzzling when one reads economic news. "Bank Negara announces that the country will be relying more on 'domestic consumption growth' to 'accelerate' the 'next quarter growth' of the economy". What exactly does it mean? Applying economic theories, allow me to break things down into the simplest sense, just to get the discussion going:

Aggregate Output Function

Output/Gross domestic product (Y) = Consumption (C) + Investment (I) + Government spending (G) + Net export (NX)

Y = C + I + G +NX

This is the most fundamental equation to understanding what makes up the total output of an economy, the gross domestic product (GDP). Consumption (C) refers to the domestic consumption of our economy — that is, how much the people in our economy spend on local goods and services. Investment (I) refers to the money spent investing in our economy, by the rakyat or by people from overseas. Government spending (G) refers to the annual government budget, which is the economic responsibility of the government to tax and to spend in our economy (indeed, the government is a big player in an economy). Lastly, net export (NX) refers to the sum of national export after subtracting how much the country imports (it can come out as either a negative or a positive number, depending on whether the country imports (negative) or exports (positive) more).

Any increase in either component of C, I, G, NX will increase the economy's output (Y). Without saying, any decrease in either or all of the components will, in turn, lead to a decrease in output. The aim here is to increase the output. The higher the output, the higher the country's gross domestic product. The economy is producing more and consuming more, thus reflecting more wealth and the higher income of the nation.

Of course at this point, if you have taken Economics 101, you would realise that I have neglected some fine print from the equation. As a caveat, I do not intend to give a lecture on economics, but rather would like to focus on some of its basic structures, just to provide an insight to the economy.

Yes, this equation is imperfect, and relying on gross domestic product as the sole indicator of the economy is a fallacy. But what you need to know is that this equation neatly breaks up the components of what makes up an economy.

That being said, one has to understand that each component has its respective growth rates and that each component has its respective size of contribution to the output. Say, when Bank Negara announced that "domestic demand remained the key driver of growth, expanding by 8.3 per cent, while exports turned around to grow by 1.7 per cent" , it was referring to the fact that the 'Consumption' (C) had increased by 8.3 per cent in that quarter and that 'Net export' (NX) had increased by 1.7 per cent in that quarter. On another matter, the percentile of contribution of each component to the economy is another matter. For instance, C could contribute, say, 30 per cent to the output while the other components, (I, G, NX) collectively contribute to the remaining 60 per cent of the economy. Unfortunately, I do not have the actual statistics with me at this point, but from a theoretical framework, this is one way of measuring the economy.

Relating it back to the corruption issue, when money is leaked out of the economy, it means that the money that should have been reflected in the output (Y) has not been accounted for.

Aggregate Production Function

Understanding the aggregate output is just one side of the coin. The economy can be broken down in yet another method, the aggregate production function.

In its simplest variation,

Output/Gross domestic product (Y) = Technology (A) x Capital (K) x Labour (L)

Y = A x K x L

What this equation essentially does is break down the source of output (Y) into the multiples of three components — technology (A), labour (K) and capital (L). This way, the output of the economy is measured by the inputs of labour, capital and technology. The elegance of this equation is that it is a theory of economic growth. An increase of either a single input component or all components (A, K, L), will lead to an increase of output (Y).

In the case of Malaysia, we have all these years been relying more heavily on the labour (L) component and not on technology (A), relative to the Asian Tiger economies – Taiwan, South Korea, Singapore, Hong Kong. Some economists argue that this is one reason why Malaysia is still a developing country – because Malaysia is more focused on perspiration (labour intensive) rather than inspiration (technological improvements).

The point of difference between the first and the second equations is that the first equation, the aggregate output function merely breaks down the components of the economy. It does not inform us on how to achieve economic growth. The second equation, the aggregate production function is more for the purpose of analysing the source of growth through the input components.

The attentive reader will realise that mathematically speaking, both the aggregate output and aggregate production equation should be equaled. That is,

C + I + G + NX = A x K x L

However, as these both equations were developed independently of each other and are based on different fundamental theoretical assumptions, it is rare to equate them in this form. In short, these two equations, though referring to the same thing, should be viewed separately for understanding and interpretation.

Thus far, the reader will most certainly have some questions regarding the assumptions and credibility of these given equations. Unfortunately, I apologise for I am unable to provide a full-length explanation of both these equations here (the task would require an economics textbook). However, it is safe to say that if you ask any economics degree undergraduate, s/he should be able to explain them in further detail. Both are rather essential parts of economic studies.

But my intention here is to provide an example of an economic framework we can use to discuss the economy. Going back to my initial question — if the money loss from corruption is somehow returned to the economy, how then would our economy fare? The answer to that question (bearing in mind the first equation) is that no matter which component the money back re-enters the economy through, whether it is via C, I, G or NX, the country will be economically richer due to the increase reflected in output (Y).

However, to have more money in an economy is not the same thing as growing money in the economy. After all, anyone can spend a ringgit, but it is the return of the ringgit spent that makes the difference – the bang for the buck. Therefore, in order to understand economic growth, we have to bear in mind issues beyond corruption (thus where the second equation comes in handy) — to understand the source of growth and to realign our input resources to propel our nation to a high income nation.

To tie this back to the point I raised at the beginning, I believe that to an extent, every country has its fair share of corruption, if not in the form of outright money-under-the-table business, then at least in some form of collusion or government-discriminatory economic interventions. These are interpreted in economic terms as opportunity costs. Rather than always harping on the issue of corruption when discussing the economy, I believe that it is more productive to have foresight on the growth of the economy, when giving our twenty sen-worth of armchair criticism.

Of course, there is much more to learn if one is to truly master the ins and outs of an economy. However, these two fundamental equations of macroeconomics can form a starting point in gaining a little more insight on how to approach the topic of the economy. — loyarburok.com

* This is the personal opinion of the writer or publication and does not necessarily represent the views of The Malay Mail Online.

Another big weekend for Thailand — Nicholas Farrelly (New Mandala)

Posted: 21 Dec 2013 04:49 PM PST

DEC 22 — Another big weekend in Thai politics is coming up. Suthep Thaugsuban — the anti-Thaksin insurrectionist — is calling for a million people to hit the streets and bring Bangkok to a standstill.

But for those of you keeping score the weekend marks another milestone. It is now almost six years since the 23 December 2007 victory of Thaksin Shinawatra's Thai Rak Thai 2.0 (more officially known as the "People Power Party) in the post-coup election.

As more years tick by, I am increasingly convinced that the savvy pro-Thaksin campaign of that year, spearheaded by the indefatigable and divisive Samak Sundaravej, marks a key period in the country's long-term battles.

Those of you who are intrigued by this history will enjoy Michael H. Nelson's series of detailed New Mandala posts about the 2007 campaign in Chachoengsao province. There's an especially interesting post on the oath for a "clean and fair" campaign and another on the provincial-level advertisement of the election. There's also Chris Baker's superb map of the result.

What has changed since then? For all the blood spilled, speeches given, crowds rallied, and votes cast, has Thailand managed any progress? Are there signs that good things will follow?

In response to these questions, and in preparation for this weekend's anti-government protests, it's worth drawing attention to Joshua Kurlantzick's thoughtful analysis of the Thai scene. He fires a broadside at the idea that Thailand's politics are exceptional and, along the way, offers insights about political change across the Southeast Asian region.

As Kurlantzick helpfully points out:

…other countries in the region have made a gradual transition toward building trusted formal institutions of conflict mediation and away from having disputes mediated by informal institutions gathered around one or two top leaders, as was common in Suharto's Indonesia and has been the case with Thailand's network monarchy for years. Indonesia slowly has built a more stable and trusted court system, and more trusted institutions designed to monitor elections and address potential electoral fraud. Poorer than Thailand, and in many ways far more divided and harder to govern, Indonesia nonetheless has created reasonably stable formal institutions, allowing politics to be channelled through a system, and no longer through the hands of a small handful of men and women.

So what happens next? Is Thailand showing any appetite for an Indonesia-style transformation? Of course, there's coup talk again. — asiapacific.anu.edu.au

* This is the personal opinion of the writer or publication and does not necessarily represent the views of The Malay Mail Online.

Love still exists — Sin Chew Daily

Posted: 21 Dec 2013 04:42 PM PST

DEC 22 —The pace of modern life is rapid. Particularly in urban areas, everyone is busy dealing with a variety of living pressures and together with poor public security, the society is complicated and fraud cases can frequently be heard. It is difficult to differentiate between good people and bad people. To protect themselves, everyone is forced to stay alert and beware of strangers. With the lack of communication and trust, sensibilities seem to have gradually faded and disappearing. Therefore, the society becomes indifferent. When everyone is sighing for the weakening sensibilities, several recent incidents have deeply touched and warmed out hearts.

A 16-year-old boy suffering from congenital liver disease urgently needed RM600,000 for a liver transplant operation and after his condition was reported, readers had enthusiastically made donations and the needed amount of medical expenses was raised within a few days. The boy's mother was not able to donate liver to her son due to arrhythmias and a few kind-hearted people aged from 24 years old to 70 years old actually expressed their willingness to donate their livers to the boy. They were neither relatives nor friends of the boy, but simply wished to safe his young life.

The spirit of selfless love has not only brought hope to the people suffering from diseases but also sent poor young people to study abroad and pursue their dreams. An excellent student from Penang was sent to Taiwan to study medicine with the help and encouragement of a group of kind-hearted people. The student was born in a poor family and despite the path of studying was difficult, he remained optimistic and positive. His perseverance and spirit have touched the hearts of many people and thus, they helped him pursue his dream. He recently wrote a long letter to thank those who had helped him, setting a good example to his peers while warming the society which is gradually losing its sensibilities.

In fact, there are always good people doing good things in every corner of the society. Because of them, we can see hope in desperate situations. Malaysian Yong Vui Kong, who was given a death penalty in 2009 for bringing 47 grams of heroin into Singapore, has had his death sentence commuted to life imprisonment and 15 strokes of the cane. The love and persistence of his lawyer M Ravi had much contributed while a group of people who spared no effort in making petition for him had also showed us the tolerance and compassion of the people for young people who had done wrong.

Although the society is chaotic due to poor policies and weak enforcement, love still exists. Many people have lent their helping hands to recent flood victims, showing that the society is still warm and full of love.

In the midst of the crowd, despite the hectic pace of life, we should never forget to timely offer a helping hand to vulnerable groups or those who are in need, because the greater the number of kind people in the society, the warmer it will be. — mysinchew.com

* This is the personal opinion of the writer or publication and does not necessarily represent the views of The Malay Mail Online.

Approval rate and inflation rate — Lim Sue Goan

Posted: 21 Dec 2013 04:33 PM PST

DEC 22 — The Prime Minister's approval rate has dropped from 62 per cent in August to 52 per cent in December and the biggest reason is, the reduction of government subsidies and good prices hikes have brought the people miseries.

The word 漲 (meaning inflation) has been chosen as the Chinese character of the year 2013 for Malaysia, reflecting the people's grievances. If the inflation next year exceeds 10 per cent, the Prime Minister's approving rate might set a new low record.

The overall direction of the moves of the government in rationalising government subsidies to reduce fiscal deficit; implementing goods and services tax (GST) to increase revenue to avoid burdening descendants, as well as rejecting the four demands of Congress of Unions of Employees in the Public and Civil Services (Cuepacs) to improve civil servants' welfare, are correct to avoid fiscal deterioration.

Although the goal is correct, the planning and strategies used are full of mistakes. As a result, it seems like they are causing suffering to the people while the executive team is sitting back and relaxing.

Firstly, they lack a careful planning for the time to cut subsidies. The government had repeatedly postponed the move of cutting subsidies due to the general election and it immediately cut petrol subsidy, abolished sugar subsidy after the election. In addition, electricity tariffs and toll charges will be increased next year. How are the people and business operators going to bear the strong wave of price hikes?

Since the government's debt is approaching 55 per cent of the Gross Domestic Product (GDP), the government is eager in controlling its debt, so it just takes measures without taking into account the civil and private sectors' acceptance capability.

Subsidy reduction should be done gradually to reduce the pain. It is inconsistent for the BN to blindly please the people before the general election but stressed after the election that it does not practise populist approach in national administration.

Secondly, shouldn't the government strengthen the resilience of the civil society and industries before rationalising subsidies?

For decades, the government has subsidised the people and businesses with revenues of the national oil company, causing the lack of competitiveness and productivity in all areas.

Even though the country has spent a great amount of resources to develop education, no significant progress has been made due to racial policies and political interference. The number of students scoring straight As in government examinations increases every year but their true abilities show when they come to international assessments like the Programme for International Student Assessment 2012 (Pisa ).

With such competitiveness, how are we going to survive with the absence of protection after subsidies are abolished?

A smart government should have a set of sound economic growth strategies, including good management, so that the people can be self-reliant.

The government lacks foresight in management and relies only on the huge oil revenues over the past few decades. It has become excessive generous, resulting in a swelling executive team requiring the government has to pay over RM10 billion of salary each year.

The government is currently highly dependent on the iron votes of the 1.4 million civil servants and thus, it dares not to cut administration expenditures while not being able to curb waste and fraud. Therefore, it suffers overruns every year and now, it can only cut subsidies.

Allowing highway concessionaires to increase toll charges every three years is also a result of poor management. The number of cars on the road increased 600,000 each year and thus, it is a business that will never suffer losses. Then why should it be specified in the concession agreements that the government must compensate if it does not allow toll hikes? The negligence has heavily burdened a few generations of people.

Politically, to implement the Bumiputera economic agenda, Umno has continuously supported Bumiputera entrepreneurs, including the issuance of government projects. However, many projects are full of flaws, forcing the government to spend more money to remedy the situation, such as the Serdang Hospital had cost the government RM30 million of repairing fees. How long can the government sustain it?

If subsidising necessities does not bring economic benefits, then political subsidies and appropriations should also be cut as soon as possible or it will be difficult for the government to justify its move.

Subsidy rationalisation should be a continuous process, instead of distributing money during election and reducing populist measures after election.

In addition, the move of allowing toll charge hikes has also violated the BN's election manifesto.

Since there are too many inconsistencies, it is not surprising that in the latest polls, more than half of respondents said that they do not believe in the government's economic growth statement.

Price hikes, the implementation of minimum wage system and the reduction in the US quantitative easing (QE) are expected to make the economy next year thorny. Once manufactures can no longer bear the increased costs, the exports will slump and the domino effects could collapse the economy.

Some non-governmental organisations (NGO) have called for a mass rally on December 31, making people realise that 2014 would not be an easy year. Najib must learn the lessons of former Prime Minister Tun Abdullah Badawi, who had failed to control price rises during his term and resulted in massive public grievances, which had later turned into a strong civil force.

The people's perception towards government has also dropped to 38 per cent and if the support rate does not rise, the Sarawak state election, which must be held no later than in 2016, should then be a very challenging battle for the BN. — mysinchew.com

* This is the personal opinion of the writer or publication and does not necessarily represent the views of The Malay Mail Online.

GM reshuffle to test Opel CEO’s turnaround skills

Posted: 21 Dec 2013 04:23 PM PST

File photo shows an Opel Mokka car on display at the Essen Motor Show on November 29, 2013 at the fair grounds in Essen, western Germany. The scaling back of General Motors' alliance with PSA Peugeot Citroen created uncertainty over the US carmaker's strategy for Opel. — AFP picFRANKFURT, Dec 22 — A management rejig at General Motors and the scaling back of its alliance with PSA Peugeot Citroen have created fresh uncertainty over the US carmaker's strategy for Opel, just as the European business seemed to have secured a settled future.

Karl-Thomas Neumann, Opel's sixth boss in the past decade, has made a big splash at the loss-making business, helping to land a multi-billion euro investment from bosses in Detroit.

The 52-year-old German also appeared to win an important victory when GM said it would drop its Chevrolet brand in Europe and instead focus resources on Opel and sister brand Vauxhall.

But some Opel staff worry these advances are in doubt after the appointment this month of new GM chief executive Mary Barra. Outgoing CEO Dan Akerson said Barra had been chosen because she had "brought order to chaos" in global product development, and tasked her with making vehicle development even more efficient.

Such words spark concern at Opel, which feels constant pressure to use global platforms and to minimise the level of expensive customisation for the European market has handicapped its ability compete, a former Opel executive told Reuters.

The management reshuffle at GM will also see Steve Girsky, who successfully campaigned for more investment in Opel, leave his position as GM vice chairman.

"A major Opel protagonist is leaving and nobody knows whether GM will maintain its high-level commitment to Europe," a staff member at Opel, who declined to be named, told Reuters.

A GM spokesman in Detroit said there was no change in its stance on Opel.

In a further blow for the European brand, GM also said this month it was paring back an alliance with France's PSA Peugeot Citroen after it failed to reach cost targets.

Opel was relying on that partnership to develop a common platform to help revamp its range of small cars, some of which like the Corsa have been on the market since 2006, and drive its market share back above 6 per cent in Europe, compared with a high of more than 10 per cent a decade ago.

Starting with Adam

So, just at the time Opel needs to build new cars for the European market, it has seen a key manufacturing partnership weakened and is set to lose a GM board member who fought the brand's corner in Detroit. That has put the pressure on Neumann, a keen marathon runner from Lower Saxony, to deliver.

As recently as April, he helped secure €4 billion (RM17.97 billion) of investment from Detroit to fund 23 new models and 13 new engines by 2016 to overhaul Opel's ageing product range.

But Metzler Bank auto analyst Juergen Pieper said reversing years of neglect would not be easy.

"If you have a weak brand, your cars need to be twice as compelling to persuade clients to switch and to grow sales," he said. "Merely developing cars which are 'as good' is not enough. Clients will stick with the brand they already like."

Neumann's relations with his bosses could depend in part on the success of Opel's recently-launched Adam subcompact city car, built on a cut down Corsa platform with upmarket interior trim and multimedia features.

The early signs do not appear encouraging.

Opel started selling the Adam in January but production at its Eisenach plant - where the Adam and the two-door version of the Corsa are made - ran idle for five days in October, and for six in November, due to a slump in demand.

Opel says this is due to lower sales of the ageing Corsa, insisting that demand for the Adam remains high, with more than 55,000 orders since it was launched. In Germany sales of the Adam are on track to beat 20,000 sales by year end, Opel said.

The latest sales figures from industry body ACEA show that while European car sales rose 0.9 per cent in November, GM sales of the Opel and Chevrolet brands in Europe slumped 3.8 per cent.

"If the cars that are built for Europe to European specifications fail to sell, then the whole rationale of giving Opel more leeway falls away," said another former Opel executive, who also declined to be named.

Focus on Europe

GM, the world's No. 2 carmaker behind Toyota, came close to selling Opel in 2009 before changing its mind.

Opel has suffered for years from management disruption, a scarcity of small cars which resonate with European consumers, and the tension between GM's desire for global economies of scale and Opel's calls for customisations for the local market.

The current Opel Astra is a case in point. By sharing a platform also used in GM's Chevy Cruze, the car is wider, and 20 to 30 kilos heavier than its main European rival, resulting in lower fuel efficiency and slower acceleration, the first former Opel executive said.

The Astra has also been on the market since in 2009, a period during which Volkswagen has put two generations of its rival Golf model into showrooms.

Opel's Corsa has a similar problem. It competes in Europe's small car or subcompact segment, the biggest slice of the market totalling 24 per cent of new car registrations in the region year-to-date, according to data from JATO Dynamics.

Opel's current Corsa subcompact was launched in 2006, making it one of the oldest products being offered in European showrooms where it competes with the Ford Fiesta, the Peugeot 208 and the Renault Clio. In 2012, Corsa sales fell 14 per cent.

A new version of the Corsa, based on a platform developed with Fiat, is due next year. But Peugeot and GM this month said plans to jointly develop the subsequent generation have now been buried, forcing Opel to choose a platform from the GM stable.

Neumann, who studied electrical engineering at TU Dortmund University, came to Opel after starting out as an engineer with Motorola Semiconductor, and moved to become CEO of German auto supplier Continental. He joined Opel only in March after a stint at Volkswagen where he served as head of its China operations.

At Opel, Neumann has moved to pare back the European brand's once global ambitions and repatriated some production from South Korea by moving production of the Mokka subcompact sport utility vehicle to Spain from the second half of 2014.

But this has left Opel with only a handful of export markets such as Chile, Singapore and the UAE, and more exposed than ever to Europe, where the industry is struggling to emerge from a six-year slump in sales and dogged by overcapacity.

"Rebuilding a weak brand takes years of delivering outstanding product, the question is whether Europe has so much upside potential that General Motors will decide to make Opel its top priority for years to come," Metzler's Pieper said. — Reuters

One man’s rubbish, another man’s artwork

Posted: 21 Dec 2013 04:20 PM PST

Art is Rubbish/Rubbish is Art. — Picture courtesy of Ernest ZacharevicGEORGE TOWN, Dec 22 — Walk through the Heritage Zone of George Town and you will see crowds of people taking pictures of, and with, Lithuanian street artist Ernest Zacharevic's wall art.

Sure, the laughing children on a bicycle or the little boy trying to reach up to a window... they are a little faded now, but some two years on, they are still as popular with tourists and locals alike.

Now, fans of Zacharevic are in for a treat as the artist will be introducing a series of small murals and street installations all over George Town in the next few weeks before unveiling his first solo exhibition.

The "frame on the hole" in Nagor Road that was put up last week is just the first of many more to come.

The installations are part of a promotional blitz to promote his upcoming solo exhibition next month.

"Ernest has been an artist since he was 12 but he has never had a solo exhibition before so this is his very first, the first big step for him as an artist," said his publicist and creative partner Gabija Grusaite in an email interview.

The exhibition, which will kick off on January 17 and end on February 14, is titled "Art is Rubbish/ Rubbish is Art" and will be at the old Hin Bus depot.

"This is like a first album release for a musician so there needs to be a strong story told, the venue and locations have to be perfect," Grusaite said.

It was after years of planning and searching for the perfect place that Zacharevic decided on Penang as this island and Malaysia have been a continuous source of inspiration for him.

"Art is Rubbish/ Rubbish is Art" is the result of his deep fascination with Penang; he keeps coming back to stay for short periods of time.

Penang is also where he achieved fame for his series of wall murals done under George Town Festival 2012 all over George Town.

"This island and Malaysia in general has prompted him to continuously experiment and look for new ways of expression, this is why he keeps coming back here," his publicist said.

On his choice of an old abandoned bus depot, the Hin Bus Company Depot along Brick Kiln Road, as the spot for his exhibition, Grusaite said, "It has been abandoned for years and still holds layers of history within its walls so Ernest is keen to bring it back to life as a meeting point between new and old," she said.

The old depot has been abandoned since the Hin Bus Company, which was rebranded as KGN Hin Bus, closed down several years ago.

It used to be one of the main public bus companies that plied several routes on the island before RapidPenang was introduced in 2007.

"The depot has a huge space for Ernest to work on so he will fill the space with new, never-seen-before artwork," Grusaite said.

The exhibition, which promises to be different from conventional art installations in modern art galleries, will feature indoor, outdoor and semi-outdoor galleries.

Amongst the artworks to be featured will include his now-familiar style of wall murals, studio artwork and other installations that will only be unveiled when the exhibition opens on January 17.

"He will be producing a series of smaller murals and street installations like the "frame on the hole" all over George Town to promote the exhibition so keep a look-out for these," Grusaite added.

The whole theme of Zacharevic's upcoming exhibition is multi-layered but it is loosely based on recycling of objects and ideas in a very broad sense.

She explained it is meant to tell the people that one man's rubbish is another man's treasure so most artworks will be painted on objects found in the streets of Penang.

"This is to evoke awareness amongst the people about their surroundings and that it is constantly changing so it is up to Malaysians to decide for themselves what is art and what is rubbish," she said.

To Zacharevic, there is astonishing beauty to be found in places where no one is looking and "rubbish" in this sense will lead to an adventurous exploration of the margins, of things lost and forgotten and of the people that dwell on the edge of the society.

The "frame on the hole" drew the attention of Penang Chief Minister Lim Guan Eng who said it will not be removed but will serve as a reminder to the local authorities to take heed when it comes to complaints on public infrastructure.

Zacharevic had turned the small square hole, located near the corner of Nagor Road and Hutton Lane, into a frame with a small ball shackled to it inside the hole while a couple of existing weeds were left to thrive as part of the installation.

A check on the old Hin Bus Company depot showed contractors busily clearing up the place, securing any loose wiring and making it safe for public to walk around.

According to one of the contractors there, the peeling paint on the walls and the aged look of the place will be left as it is as per the instructions given by Zacharevic.

His solo exhibition opens at 8.30pm on January 17.