Archive for category Economics
1. First of all, I would like to congratulate the organizers for having this forum at a very opportune juncture in our history. Our country faces new challenges as we approach the year 2020 and we will pay close attention to the upcoming 11th Malaysia Plan that is supposed to take us to the status of a developed country in 5 years’ time. But at the same time, we need to remind ourselves that the problems of poverty and inequality are still very much present in our midst despite the many self-congratulatory statistics that are being used by the government to highlight our many so called ‘achievements’.
2. The gap between not just the ‘haves’ but the ‘have-a-lot’ and the ‘have-nots’ could not have been in starker display in our country in the past three months. While low income families have been struggling to cope with the increase in the price of petrol, electricity and other basic necessities, billions have been squandered by politically connected individuals on expensive champagne in Las Vegas, penthouses and mansions in New York and Beverly Hills, round the world shopping trips and partying with Hollywood celebrities. While some shopkeepers, especially from the older generation, have been forced to close their business because they cannot cope with the introduction of the Goods and Services Tax (GST), our First Lady of Malaysia hopes that the GST won’t increase the price of her RM1200 hair-dye house call. While the average Malaysian is worried about the increase in the toll charges, taxi and bus fares, the Prime Minister’s Office goes out to spend almost half a billion ringgit on a new plane! Read the rest of this entry »
From Sodomy I to Sodomy II – Malaysia regressing to the darkness and repression 17 years ago when the country should be moving forward to greater freedom, justice, prosperity and confidence after the passage of almost two decades
Wishing all Malaysian Chinese as well as Malaysians, regardless of race or religion, a Happy Chinese New Year as it is now a festivity celebrated by all Malaysians regardless of race and religion.
Chinese New Year, which begins on the second new moon after the winter solstice, has been described as the most important holiday for Chinese people worldwide.
In China, it is marked by the world’s largest annual human migrations with 2.8 billion trips made across the country in the mass exodus of students, migrant labourers, factory workers and office employees making their long journeys home to celebrate the Chinese New Year.
Chinese New Year in Malaysia has become a very Malaysian affair, despite its ethnic origins and associations.
In Malaysia, the Chinese New Year is also marked by major human migrations, but not confined to the Chinese as it affects other ethnic groups as well.
Many issues will jostle for top attention among Malaysians during the Chinese New Year. Read the rest of this entry »
Larry Elliott and Jill Treanor in Davos
25 January 2015
Davos delegates fear possibility of minority government and second poll, as well as uncertainty over EU membership
The general election risks exposing the UK to a “cocktail of political risks” that could threaten growth and force the country out of the European Union, according to business leaders.
The growth of minority parties such as Ukip and the Greens and the fall in popularity of the Liberal Democrats are forcing bosses to prepare for the possibility that a second poll may have to be called months after the one scheduled for 7 May.
The Conservatives’ pledge to call an EU referendum in 2017 if they are in government is also causing anxiety. Doubts over Britain’s political future were voiced openly by executives at the World Economic Forum in Davos.
Speaking on the sidelines at the gathering of political and business leaders in the Swiss Alps, John Cridland, director general of the CBI, said: “Britain is no longer a two-party system, it is a six-party system, and it looks like it won’t be until 5am on the morning after the election until we know what the result is going to be. The UK could end up with a minority government and a repeat of 1974, when there were two elections in swift succession. Read the rest of this entry »
23 January 2015
Thomas Piketty wasn’t there but they were talking about his ideas: they’re committed to progress as long as nothing changes
Committed to improving the state of the world. That’s the motto of the World Economic Forum, which wraps up in Davos tomorrow with the rich and powerful pondering whether to listen to Mark Carney’s views about the global economy or head for the ski slopes.
Many will opt for the latter, not because they have anything against the governor of the Bank of England. On the contrary, the former Goldman Sachs banker picked by George Osborne to run Threadneedle Street is very much part of the Davos family. It is simply that one of the reasons the WEF is held in Davos and not in Atlantic City or Blackpool is that it has plenty of black runs available for those who, after four days, have had enough of hearing Christine Lagarde warn about the risks of rising inequality.
All of which raises a couple of obvious questions: is Davos simply an excuse for the 1% to have a big bonding session in which they convince themselves that we are all in it together? And does it actually do any good? Read the rest of this entry »
By P Gunasegaram
Jan 22, 2015
QUESTION TIME Granted we have lots of problems in the country and tonnes of wastage. We overpay for contracts, we have a strategic investment fund which has gone amok and is investing willy nilly with borrowed money, we have a looming disaster in the form of RM30 billion at risk in a private finance initiative gone wrong and we have loads of patronage.
Does this necessarily mean that the economy is in crisis if we put all this together with a weakening ringgit and oil prices which have fallen off a cliff? Does this mean this year will be a disaster and one of gloom and doom for Malaysia?
It is tough to do but this is when we need to be rational about things and assess economic conditions with a cool head, separating this to some extent from the sad state of politics in the country which leads to a whole host of economic concerns.
Let’s just take a couple of the most serious concerns and examine them in some detail to see what gives. First, the weakening ringgit which was at its lowest levels in six years. But why was it low six years ago – early 2009 to be precise? Read the rest of this entry »
The Malay Mail Online
January 20, 2015
KUALA LUMPUR, Jan 20 — Malaysia has been ranked 35 out of 50 countries in international business school Insead’s global talent competitiveness index (GTCI) for 2014, trailing behind Singapore, which retained its number two spot for a second-year running.
The index placed Switzerland at number one, followed by Singapore and Luxemborg in second and third places, while Australia came in at number nine.
Malaysia scored higher than China, Brazil and Greece, which came in at number 41, 49 and 50 respectively.
The study, produced by Insead along with the Human Capital Leadership Institute of Singapore (HCLI) and Adecco Group, measures a nation’s competitiveness based on the quality of talent it can produce, attract and retain.
This is the second time Singapore, the only Asian country, was featured in the top ten rankings of the index.
Malaysia moved up two notches from the number 37 spot in GTCI’s 2013 rankings index which continues to be heavily-dominated by European countries. Read the rest of this entry »
19 January 2015
The countdown has begun to September’s summit on the sustainable development goals, with national governments now discussing the 17 goals that could transform the world by 2030
What are the sustainable development goals?
The sustainable development goals (SDGs) are a new, universal set of goals, targets and indicators that UN member states will be expected to use to frame their agendas and political policies over the next 15 years.
The SDGs follow, and expand on, the millennium development goals (MDGs), which were agreed by governments in 2000, and are due to expire at the end of this year.
Why do we need another set of goals?
There is broad agreement that while the MDGs provided a focal point for governments on which to hinge their policies and overseas aid programmes to end poverty and improve the lives of poor people – as well as provide a rallying point for NGOs to hold them to account – they have been criticised for being too narrow. Read the rest of this entry »
January 19, 2015
Oxfam warns of widening inequality gap, days ahead of Davos economic summit in Switzerland
Billionaires and politicians gathering in Switzerland this week will come under pressure to tackle rising inequality after a study found that – on current trends – by next year, 1% of the world’s population will own more wealth than the other 99%.
Ahead of this week’s annual meeting of the World Economic Forum in the ski resort of Davos, the anti-poverty charity Oxfam said it would use its high-profile role at the gathering to demand urgent action to narrow the gap between rich and poor.
The charity’s research, published on Monday, shows that the share of the world’s wealth owned by the best-off 1% has increased from 44% in 2009 to 48% in 2014, while the least well-off 80% currently own just 5.5%.
Oxfam added that on current trends the richest 1% would own more than 50% of the world’s wealth by 2016.
Winnie Byanyima, executive director of Oxfam International and one of the six co-chairs at this year’s WEF, said the increased concentration of wealth seen since the deep recession of 2008-09 was dangerous and needed to be reversed. Read the rest of this entry »
DAP proposes a two-day special Parliament meeting on Jan 26 and 27 on the revised 2015 Budget instead of Najib unilaterally announcing restructuring of the 2015 Budget in utter contempt not only of Parliament but also of Cabinet
The Prime Minister, Datuk Seri Najib Razak, seemed bent on announcing his restructured 2015 Budget tomorrow.
This will mean that the revised 2015 Budget is made not only without parliamentary sanction or approval, but also without Cabinet approval or sanction.
This is because the Cabinet would only meet the day after on Wednesday, January 21 2015.
This is most irregular and improper, revising the 2015 Budget after the Dewan Rakyat had approved the original budget on Nov. 25 after more than a month of debate, both on general policy as well as during the detailed committee stage, by MPs from both the Barisan Nasional and Pakatan Rakyat in the Dewan Rakya
This could only mean that what the MPs from both BN and PR had said on the 2015 Budget, both during the policy and committee stage debate, were an utter waste of time, resources and effort as far as the Finance Minister was concerned!
Now Najib proposes to announce his revised 2015 budget tomorrow, when clearly it has not been cleared or approved by the Cabinet.
Read the rest of this entry »
Revised 2015 Budget should declare war on corruption, incompetence and extravagance to provide example and leadership of government commitment to austerity, accountability and integrity
The revised 2015 Budget should declare war on corruption, incompetence and extravagance to provide example and leadership of government commitment to austerity, accountability and integrity.
Such a campaign would save the Malaysian government and taxpayers scores of billions of ringgit, which would help the country tide through the looming economic crisis as a result of the sharp fall in prices of oil and commodities and the weakening of the Malaysian ringgit.
Despite the greatest investment in anti-corruption campaign, with the Malaysian Anti-Corruption Commission developing into a huge bureaucracy but with very little to show in terms of results, the Najib premiership is still far behind the Abdullah and Mahathir premierships in both ranking and score of the annual Transparency International (TI) Corruption Perception Index (CPI).
Malaysia lags seriously behind other countries in the battle against corruption, particularly Indonesia and China, and Malaysia is at risk of being overtaken by these two countries which had occupied the bottom two of rungs of the TI CPI 1995 two decades ago in a matter of a decade.
Read the rest of this entry »
Rash Behari Battacharjee
The Malaysian Insider
17 January 2015
It is as plain as daylight that Budget 2015 must be revised in the wake of plunging world oil prices, given that some 30% of government revenue comes from petroleum. In addition, it has been noted, the unprecedented ferocity of the year-end floods which will require a multi-billion ringgit reconstruction effort means that development expenditure must be reallocated to rehabilitate damaged infrastructure and restore normalcy to the victims’ lives and the economies of the affected regions.
Last week, Prime Minister and Finance Minister Datuk Seri Najib Razak indicated, not a day too soon, that an announcement about a possible restructuring of the budget to address these challenges would be made this week.
Analysts have noted that a confluence of external and internal factors in recent months – including the oil price shock, capital outflow, flood devastation and 1MDB’s performance, besides corrosive political developments – have heightened concerns about the prospects for the Malaysian economy, both in the immediate future and the longer term. Read the rest of this entry »
by Anisah Shukry
The Malaysian Insider
3 January 2015
As Putrajaya responds to falling global oil prices by prioritising domestic spending and investments, a leading economist has warned that the national budget for 2015 was unsustainable if it is not revised to account for the price drop in the commodity, of which Malaysia is a net exporter.
Tan Sri Dr Kamal Salih, an adjunct professor of Economics and Development Studies at Universiti Malaya, said no amount of tax increase could compensate for Petroliam Nasional Bhd’s (Petronas) lower revenue contributions to Putrajaya.
“Of course, the government has to revise the budget. The assumption of the oil price was quite high and now it must be reduced to a realistic level, especially as the price may go down for a long time,” he said.
“The current budget is not sustainable now.” Read the rest of this entry »
Tan Siok Choo
The Sun Daily
29 December 2014
WITH 2014 drawing to a close, I have several questions about issues that arose this year but could impact Malaysia’s future.
Question 1: Why does Putrajaya persist in maintaining Malaysia’s growth in gross domestic product (GDP) in 2015 won’t be affected by plummeting prices of oil, a commodity that contributes significantly to federal government revenue?
Budget 2015 was prepared when Brent oil – the benchmark for Petronas’s Tapis blend – was in triple digits. Analysts estimate federal government revenue next year is based on an oil price of US$105 per barrel.
Last Friday, amid thin trade, Brent oil for February settlement closed at US$59.45 a barrel.
Labelling the World Bank’s revised forecast of 4.7% GDP growth next year as “too conservative”, top Malaysian policymakers announced the 5% to 6% economic growth target for 2015 will be maintained.
Admittedly, plummeting oil prices could be beneficial – it could stimulate global economic growth and reduce fuel costs for motorists and for sectors like airlines and truckers. Even so, shouldn’t Putrajaya prepare for the worst rather than adopt a wait-and-see attitude? Read the rest of this entry »
By Mark Magnier
Wall Street Journal
Dec 19, 2014
New Calculation Adds About 3.4% More to 2013 Data
BEIJING — With the stroke of a pen, China announced Friday that world’s second largest economy was 3.4% larger last year than previously thought — chiefly due to a more accurate counting of services and their impact on economic output.
China’s 2014 gross domestic product will be calculated using the new methodology when the full-year results are released next month.
The new calculation added 1.92 trillion yuan ($308.3 billion)—or about the equivalent of the economy of a Colorado or a Singapore—to the size of China’s economy in 2013, bringing it to a total of 58.80 trillion yuan.
While at one level the statistical change is fairly arcane, it should give investors and policy makers a more accurate picture of the economy as Beijing tries to pivot from investment-led growth in industry and infrastructure toward services and consumption.
“I think they’re genuinely trying to improve the quality of the numbers,” said Michael Pettis, professor at Peking University’s Guanghua School of Management. “When you have bad numbers, it’s hard to make policy, and this is especially important in China, where the single most important player is the government.”
Analysts said the recalculation likely moves forward the date approximately a decade from now when China’s economy is projected to surpass the U.S.’s as the world’s largest. The U.S. surpassed the U.K. as the world’s largest economy in 1872. China has been expected to surpass the U.S. as the world’s largest economy around 2024 or 2025. Read the rest of this entry »
By Lucky Star
COMMENT At the initial stage of the New Economic Policy, privatised entity and government-linked companies (GLCs) were almost non-existent.
Khazanah Nasional Berhad, the main institution through which the federal government controls GLCs, only came into existence in 1993. Therefore, before 1990, the exclusion of government shareholding owned by Khazanah was a non-issue.
But, when the privatisation policy was vigorously implemented after the publication of the ‘Privatisation Master Plan’ in 1991, the exclusion of government shareholding in privatised entities and GLCs had a significant distorting effect on equity ownership by ethnic group.
Musa Hitam, in an exclusive interview in August 2014 with the Malaysian Insider said, “But the government does not take GLCs into account when they point out that the present bumiputera equity ownership is 24 percent. We are deluding ourselves by continuously pointing a finger at the Chinese.” As a former deputy prime minister and chairperson of a GLC, Musa definitely knew what he was talking about.
For the purpose of showing bumiputera equity ownership, government data are divided into three categories of bumiputera, namely:
1) Bumiputera individuals
2) Bumiputera institutions
3) Bumiputera trust agencies
Read the rest of this entry »
By Little Stars
COMMENT At the outset, we wish to make it abundantly clear that we fully support the New Economic Policy (NEP) objective of eradicating poverty irrespective of race and we completely agree with the 30 percent bumiputera equity ownership target.
In a multiracial country, social engineering using affirmative action to uplift the economic status of a lagging community is necessary. We do not doubt the noble intention of the founding fathers of NEP and we believe the objectives can be achieved if right policies are formulated and implemented.
Government in any part of the world is usually quick to claim credit for any success. However, in the case of Malaysia, with regard to the achievement of 30 percent bumiputera equity ownership target, the government seemed to be more inclined to declare “failure”.
Read the rest of this entry »
by Lee Shi-Ian
The Malaysian Insider
17 October 2014
Malaysia are 19 years behind South Korea in terms of productivity, the Malaysian International Chamber of Commerce and Industry said today, naming graft, leakages, complacency and archaic labour laws as road blocks.
Its executive director Stewart Forbes said Malaysia’s Gross Domestic Product (GDP) per worker productivity last year was equivalent to South Korea’s – but in 1995.
“Malaysia’s historic productivity growth was unimpressive although at one time, Malaysia, South Korea and Taiwan all started out on the same level playing field.
“Putrajaya is always quick to point out that Malaysia is better than Thailand or Vietnam or Indonesia. But why is Malaysia choosing the worst to make comparisons?
“Putrajaya ought to be comparing Malaysia to Taiwan, Singapore or South Korea. They should set the bar higher when making comparisons,” Forbes said. Read the rest of this entry »
By Steven Sim | TMI
9 September 2014
People say politicians often tell lies. But really, more often than not, they actually give us statistics. What is the difference? I’ll let Mark Twain tell you: “There are three kinds of lies; lies, damned lies and statistics”.
The latest statistics our government proudly brandish at us is the report that household income in Malaysia has surpassed RM5,900 a month. This was presented by Datuk Seri Abdul Wahid Omar, the former Maybank boss roped into the Cabinet as “economy minister”.
Intuitively, most Malaysians know it’s a farce. Why?
Because many families we know, maybe including our own, earn much lesser than RM5,900 a month.
Because even the government itself proudly claimed that its cash transfer programme BR1M has benefited 80% of Malaysian households. The only condition for BR1M is that a recipient household must earn less than RM3,000 a month. Read the rest of this entry »
by Eileen Ng
The Malaysian Insider
9 June 2014
Malaysia risks seeing its economy contract and losing its global market share in key export sectors if it fails to tackle its high levels of public and rising external debts, a United Kingdom-based economist has warned.
Sarah Fowler from Oxford Economics said while the nation’s shrinking current account surplus was not a major concern as it was expected to stay in excess in the next few years, there are worries over Malaysia’s capital account due to rising external debt, which has shot up close to 40% of its gross domestic product (GDP) in recent years.
The country’s public debt-to-GDP ratio has been hovering at an all-time high of more than 50% since 2010 because of large fiscal deficits incurred when an aggressive stimulus package was launched to bolster the country’s economy during the global financial crisis.
“Addressing the concerns would enable Malaysia to achieve a higher growth path, reaching a higher per capita income sooner. We expect the economy to grow by just more than 4% over the next five years but if the concerns were addressed growth could exceed 4.5%,” she told The Malaysian Insider in an email.
Fowler, who produced a report on “Why Malaysia is now a more risky prospect than Indonesia” which was highlighted by global financial news site Bloomberg’s columnist William Pasek last week, used 17 indicators to develop a scorecard to assess emerging market vulnerability to external economic and financial shocks. Read the rest of this entry »
By William Pesek
Jun 5, 2014
From missing airplanes to jail-bound opposition leaders, Malaysia has recently made international headlines for all the wrong reasons. Will the nation’s economy be next?
That’s the thrust of new report from Sarah Fowler of U.K.-based Oxford Economics, which ranks Malaysia the “riskiest country in Asia of those we consider,” more so than India, Indonesia and even coup-happy Thailand. On the surface, she points out, all’s well: Growth is zooming along at 6.2 percent, the external balance is reasonably sound and political stability reigns. But all’s not what it seems. “Prompted by its high levels of public debt, rising external debt and shrinking current account surplus, there has been a shift in the perception of risks towards Malaysia and away from Indonesia,” Fowler explains.
Malaysia wasn’t included in Morgan Stanley’s “fragile five” list of shaky emerging economies last year, as were India and Indonesia. But Fowler scratches at a number of Malaysian vulnerabilities that deserve more attention: external debt levels that in recent years have risen to close to 40 percent of gross domestic product; a higher public debt ratio than India; the biggest short-term capital flows among the 13 major emerging markets Oxford tracks, including Indonesia; and a shrinking current-account surplus. Read the rest of this entry »