Archive for category Economics
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 »
By William Pesek
Feb 4, 2014
Indonesia is growing at 6 percent, has rejoined the ranks of investment-grade nations, and after decades under the corrupt and repressive Suharto, has reaffirmed its place as the world’s third-largest democracy. Yet somehow enough Indonesians remember the Suharto years fondly that his Golkar Party has hopes of regaining power in upcoming elections.
Golkar isn’t alone in trying to exploit nostalgia for past strongmen (and -women). India’s Congress Party is trying to squeeze any remaining good feelings about the Nehru-Gandhi period (from 1947 to about 1989) to elevate lackluster heir apparent Rahul Gandhi. Even as China’s Xi Jinping pushes ahead with market reforms, he continues to pay homage to Communist icon Mao Zedong (1949-1976). Thais are destroying their economy rather than cut off support for tycoon Thaksin Shinawatra (2001-2006) and his sister Yingluck. Many Malaysians wax sentimental about the boom days of Mahathir Mohamad (1981-2003). Japanese are indulging Shinzo Abe’s dangerous stroll down memory lane.
What gives with nostalgianomics? The yearning for yesteryear speaks to our disorienting times and a dearth of visionary leadership when it’s most needed. This is an upside-down era when the unthinkable has a way of becoming reality: The U.S. is a developing nation again; Europe is hitting up “poor” China to bail out its debt markets; central banks have gone Islamic with zero-interest rates everywhere; the free trade that once raised living standards now foments poverty. Many simply want to get off this crazy ride. Read the rest of this entry »
COMMENT The simultaneous increase in fuel and sugar prices, electricity tariff and toll hikes have got Malaysians worried and bewildered as to how they will manage their household expenses. Compounding matters will be the Goods and Services Tax (GST) that will kick in in 2015. The already weakened ringgit and the sudden withdrawal of subsidies on essential goods will hit hard where it hurts most – the pocket.
Not unlike Marie Antoinette, the prime minister is obstinately insisting that the people can afford these massive hikes. Talk about telling the masses to eat cake, he adds insult to injury by saying these increase are not a burden!
The entire cabinet and prime minister suddenly woke up from their slumber. It dawned on them that the budget deficit, huge public and household debt have to be narrowed. What is shocking is that for 16 continuous years, the deficit and the mounting debt did not raise any alarm bells.
In fact the pro-government economists and mainstream media stoically reminded the rakyat that economic fundamentals were positive and our country is on track to become a developed nation by 2020. But all that propaganda did not convince the world. Fitch Rating Agency, in a startling report, downgraded Malaysia from stable to negative. And the game was up.
The media propaganda failed and even more frightening, instead of being developed Malaysia, by 2020, may be a bankrupt nation!
The acrimonious Fitch report had a jolting effect that aroused the Malaysian government from its deep slumber and self-delusion. It suddenly dawned upon the cabinet that the lies they had believed to be the truth, were, in fact, lies. Read the rest of this entry »
7:40PM Dec 31, 2013
In anticipation of a gloomy 2014, demonstrators took to the streets in Kuala Lumpur tonight to protest the rising cost of living as a result of the government’s austerity measures.
The New Year’s Eve protest, organised by a coalition of NGOs led by Gerakan Turun Kos Sara Hidup (Turun), saw participants gathering at three meeting points – Sogo Shopping Complex at Jalan Tuanku Abdul Rahman, Pasar Seni and Masjid Jamek
They then marched to Dataran DBKL before proceeding to the adjacent Dataran Merdeka where the Kuala Lumpur City Hall is organising a New Year’s concert.
The authorities have accused protest organisers of planning to overthrow the government and police have branded the rally “illegal”.
Police claim to have intelligence that dangerous weapons and bombs will be present at the demonstration but protest organisers have vehemently denied this.
Turun chief Mohd Azan Safar said the government was attempting to distract attention from the cost of living issues, which is the focus of the protest.
1.00am – This conclude our LIVE coverage of the rally. And no, the federal government has not been toppled. Happy New Year.
12.15am, Dataran Merdeka – Addressing the crowd, Turun chief Azan Safar leads the protesters to pledge for a corruption free 2014, while Solidarity Anak Muda Malaysia (SAMM) chief Badrul Hisham Shaharin later takes over the microphone and asked: “Was there any violence? Was there any bombings?”
He then leads the protesters in a comedic song which contains the lyrics “We love the police and the police loves us… We are only just upset that BN cheated us because they said toll will go down, but instead it went up”.
Read the rest of this entry »
Liew Chin Tong
Dec 6, 2013
The spate of new taxes and price hikes, the latest being the electricity tariff hike, have caused me to doubt whether the government under Najib Abdul Razak has any idea about the macroeconomic risks that Malaysia faces.
Against the backdrop of an uncertain global economy and the likeliness of the quantitative easing tapering, domestic demand is crucial in sustaining the Malaysian economy. Yet the spate of new taxes and price hikes will produce an opposite result: the further decline of domestic demand.
Will the electricity tariff increase become the last straw on the camel’s back that will see the Malaysian economy collapsing due to the confluence of several domestic and global factors?
The electricity tariff will be increased by an average of about 14.89 percent for Peninsular Malaysia, and by about 17 percent for Sabah and Labuan from next year.
The average electricity tariff in Peninsular Malaysia will be up 4.99 sen per kWh or 14.89 percent from the current average rate of 33.54 sen/kWh to 38.53 sen/kWh.
For Sabah and Labuan, the average tariff will be up 5 sen per kWh or 16.9 percent from current average rate of 29.52 sen per kWh to 34.52 sen per kWh. Read the rest of this entry »
A speech by Y.B.M. Tengku Razaleigh Hamzah
The Perak Academy, Perak Lectures in Ipoh: 15th Series 2nd Talk
Saturday, 23rd November, 2013, at 8.00 p.m.
Ladies and Gentlemen.
I would like to thank the Academy for inviting me a second time to give a talk on the current state of the economy. After the presentation of Budget 2014 in Parliament last month and the ongoing debate in the august house, the state of the economy is indeed a relevant question to ask. Economic reality however may not be what it is made out to be when one engages in political debate in respect of the Budget: often it is the unstated issues in the Budget and its underlying strategies and proposals that should be of great concern to thinking Malaysians.
Ladies and Gentlemen,
2. The Budget 2014 projects that GDP growth rate next year will likely be around 4.5 to 5% and 5.5% in 2015. These figures had remained in that range for the past budgets since 2000, reflecting some kind of paralysis of policy given the global economic situation and our own model of growth that depends so much on our external markets and the optimism of foreign interests in our economy. But, these figures conceal some forewarnings that are not highlighted.
3. Take for instance, the budget deficits, which had remained in negative territory for over twenty years; now the Najib government has promised to bring the budget into balance by 2020. The federal deficit has been sustained by borrowings that are now reaching close to the statutory debt ceiling of 55% of GDP. In fact the federal debt levels in absolute terms doubled since Dato’ Seri Najib took over as Prime Minister. Coupled with private debt currently at 83% of GDP (an issue I will come back to later), the total debt exposure which will have to be carried over into the next generation will now approach 140% of GDP at current prices by the end of the year. Read the rest of this entry »
– Ramon Navaratnam
The Malaysian Insider
November 21, 2013
After the earlier cautious Fitch Rating Report on Malaysia’s sovereign credit outlook, the Moody’s Investors Service’s upgrading of our credit outlook from “stable to positive”, uplifts our mood on our country’s economic prospects.
Yes Moody’s has given us a good mood on our economic prospects. But unfortunately the question lingers as to whether this feel good mood, about our sovereign credit and economic outlook, can be sustained and for how long?
The upgrading had been due to the positive and bold promises made in Budget 2014 Speech by Dato Seri Najib Tun Razak. His speech has obviously made an impact on Moody’s. Read the rest of this entry »
Sakmongkol AK47 | NOVEMBER 17, 2013
The Malaysian Insider
Government leaders preach inclusiveness and togetherness. At the very least they pretend to want that. The idea of togetherness and inclusiveness can be summed up in the powerful idea of unity.
Something of that nature cannot be sold like an advertising product and commoditised- it must be secured by living out that experience. It must be practised as an everyday life experience.
Something of that nature too must be formed on the basis of earning and giving trust. The government has neither earned our trust and they have never trusted the people.
PM Najib paid a lot of money to consulting firms to come up with slogans to reflect the idea. He has actually paid RM7.2 billion to a number of consultants since 2009. Over a 5 year period, the fee is like RM3.945 million a day.
We won’t know how much PM Najib paid consultants who came out with slogans and follow through plans of 1Malaysia and now Endless Possibilities. What seems truly endless is the rapacious appetite to gobble up taxpayers’ money.
Read the rest of this entry »
The Malaysian Insider
November 07, 2013
Business confidence in Malaysia plummeted in the third quarter of this year as the post-election boost has vanished, according to the Global Economic Condition Survey.
In a statement issued today, the Association of Chartered Certified Accountants (ACCA) and the Institute of Management Accountants (IMA) said the survey revealed that 65% of the respondents believed conditions in the Malaysian economy were stagnating in the third quarter of this year.
This is an increase from the 55% of respondents who felt business conditions in Malaysia were deteriorating or stagnating in the second quarter of the year. Only 13% of businesses reported confidence gains in the third quarter, down from 28% in the second quarter. Read the rest of this entry »
by Budget analyst
A careful analysis of the 2014 Budget Speech by the Prime Minister-cum-Finance Minister, Datuk Seri Najib Razak is most revealing and disappointing as there is little by way of an exposition of the challenges the economy faces.
The customary presentation of data on the performance, in the current year and prospects in the year ahead, are matters that are dismissed in a few perfunctory sentences.
The speech gives little information on basic macro-economic assumptions used in basing the revenue and expenditure forecasts that make up the Budget.
The speech gives no hint of how the Government proposes to deal with the less than robust external environment in which the key Malaysian export markets – China, US, the EURO zone – will continue to record sluggish demand.
The price for Malaysian oil and gas are likely to be weaker because of increasing supply from US shale oil and the re-entry of Iranian oil into global markets. With greater supply and lower demand, prices are likely to be lower. Malaysian oil and gas exports will undoubtedly feel the impact. Read the rest of this entry »
– Liew Chin Tong
MP for Kluang
The Malaysian Insider
October 25, 2013
The proposed goods and services tax (GST) will tax those who can’t afford to be taxed, i.e. 60% of Malaysians who are eligible for BR1M. These are the people who will soon be taxed by the regressive tax, together with the rest of us who live and stay in this country.
I would like to drop the Orwellian double speak so prevalently employed by many GST apologists who are trying to mask the real issue. I will share my views plainly here.
Some argue that the government has to be cruel to be kind. Hence, BN would have us believe that the fuel hike subsidy rationalisation is needed to balance the government’s expenditure and ensure its good financial standing.
In theory, this sounds legit. However, look closer and you will find many flaws in the argument. For one, this argument does not take into account the adverse effects on the man on the street. It also demonstrates an incomplete understanding of how the economy grows or declines.
What is the real reason for the Barisan Nasional government to implement the GST? This tax has hung like a sword of Damocles over our heads since Tun Abdullah Ahmad Badawi’s era in 2005. Read the rest of this entry »
Berapakan jumlah nilai ekuiti yang diperuntukkan untuk Bumiputera, nilai yang masih dalam pegangan dan bagaimana boleh membantu rakyat Bumiputera biasa?
PERTANYAAN DEWAN RAKYAT
TUAN LIM KIT SIANG minta PERDANA MENTERI menyatakan berapakah jumlah nilai ekuiti yang diperuntukkan untuk Bumiputera setakat hari ini, nilai yang masih tinggal dalam tangan Bumiputera, dan bagaimana program sedemikian boleh membantu rakyat Bumiputera biasa.
JAWAPAN: YB SENATOR DATO’ SRI ABDUL WAHID OMAR. MENTERI DI JABATAN PERDANA MENTERI
Tuan Yang di-Pertua,
Untuk makluman Ahli Yang Berhormat, Kerajaan telah menggunakan beberapa pendekatan untuk meningkatkan pemilikan ekuiti Bumiputera. Antara lain, termasuk peruntukan saham khas kepada Bumiputera bagi syarikat yang akan disenaraikan di Bursa Malaysia, lanya dilaksanakan oleh Kementerian Perdagangan Antarabangsa dan Industri (MITI). Ringkasan penyertaan Bumiputera dalam pasaran saham melalui peruntukan saham khas ini adalah seperti dalam jadual di bawah:
|TAHUN||JUMLAH TAWARAN SAHAM KHAS (UNIT)||NILAI (RM)||TAWARAN KESELURUHAN IPO (UNIT)||PERATUSAN TAWARAN SAHAM KHAS BUMIPUTERA (%)|
*sehingga September 2013
Di samping itu, terdapat juga Skim Amanah Saham yang dilaksanakan oleh Permodalan Nasional Berhad (PNB) yang telah berjaya meningkatkan pegangan ekuiti Bumiputera dalam pasaran modal. Sehingga 31 Disember 2012, pegangan pelaburan Bumiputera di bawah Skim Amanah Bumiputera bernilai RM110.3 bilion. PNB turut menawarkan unit pelaburan kepada rakyat Malaysia melalui beberapa skim seperti Amanah Saham Wawasan 2020 (ASW2020), Amanah Saham Malaysia (ASM) dan Iain-lain.
Read the rest of this entry »
By Anas Alam Faizli
Oct. 22, 2013
Malaysia’s current socio economic structure can be summed up in four words, “Rich Malaysia, Poor Malaysians.” Malaysia is blessed with abundant natural resources with petroleum being the most precious. Add the land, other commodity resources, large youthful population and the country has all the essential ingredients to flourish. How then did this small nation of 30 million manage to end up with the unsolicited title of among the region’s most unequal nation between the rich and poor. What happened? Read the rest of this entry »
By Zurairi AR
The Malay Mail Online
August 27, 2013
KUALA LUMPUR, Aug 27 — Industrialisation remains a vital step countries like Malaysia can ill afford to skip if they hope to beat the middle-income trap, the Asian Development Bank (ADB) cautioned as more emerging nations gave in to the siren call of the services sector.
In its flagship annual statistical publication Key Indicators for Asia and the Pacific 2013, ADB noted that Malaysia was among nations whose economies were transforming more slowly compared to heavily industrialised economies such as Hong Kong, Japan, South Korea, Singapore, and Taipei.
This warning comes as Malaysia continues to move away from manufacturing towards knowledge-based economy and the services sector, having started down the route with the Third Outline Perspective Plan (OPP3) between 2001 and 2010.
“Our analysis indicates that manufacturing is a developmental stage that generally cannot be bypassed on the road to becoming a high-income economy,” said a special chapter in the report titled “Asia’s Economic Transformation: Where to, How, and How Fast?”
“Virtually all countries that are rich today industrialised in the past — for a sustained period, their shares of both manufacturing output and manufacturing employment reached at least 18 per cent in gross domestic product (GDP) and total employment.” Read the rest of this entry »