Today is Black Friday. The Kuala Lumpur Composite Index plunged 34.88 points or 3.6 per cent to close at 934.01, falling to its lowest level since July 2006.
We are feeling the effects of the world financial meltdown as the United States Government’s US$700 billion (RM2.5 trillion) bailout has failed to inspire confidence that it is sufficient to avert a looming world economic depression.
But this is not the only bad news for Malaysia, which has been aplenty lately particularly our deteriorating national competitiveness.
Yesterday, for instance, it was announced that for the second consecutive year, not a single Malaysian university has succeeded to get listed in the 2008 THES-QS World Top 200 Universities while a fortnight ago, Malaysia’s ranking on the Transparency International Corruption Perception Index 2008 plunged 10 places to No. 47 in 2008 from No. 37 five years ago in 2003 when Datuk Seri Abdullah Ahmad Badawi became Prime Minister.
What disturb Malaysians is that the Barisan Nasional government is totally at sea and unprepared to face the looming world financial crisis, as the Ministers and BN leaders are too preoccupied fighting for survival in their respective political parties to be able to plan out a strategy to save the Malaysian economy from the world financial meltdown.
Parliament is reconvening on Monday after a six-week recess and the first item of business is the beginning of the 2009 budget debate.
I have always been uncomfortable about the presentation of the 2009 budget on August 29 and the immediate adjournment of Parliament for six weeks for the fasting month without any debate until six weeks later on Oct. 13.
So many things would have happened in the national and world economy in the intervening six months as to make the 2009 Budget presented six weeks ago quite outdated and irrelevant – as has been proved to be the case with the fast-paced world financial meltdown in the past six weeks.
Why wasn’t the 2009 Budget be presented on the Friday before the reconvening of Parliament on Oct. 13, i.e. today on Oct. 10, so that the 2009 Budget that would be debated in Parliament on Monday would be timely and relevant to the latest economic scene, both local and global?
There is now another reason why the presentation of the 2009 Budget on August 29 and its debate on Monday on Oct. 13 is most odd – as there is now a new Finance Minister, with Datuk Seri Najib Razak taking over the portfolio on Sept. 17 when pressures mounted in Umno to fast-track Abdullah’s power-transition plan.
Is the 2009 Budget Abdullah’s Budget or Najib’s Budget?
These are two reasons why before the parliamentary debate on the 2009 budget begins on Monday, Najib should present a revised 2009 Budget which should take into account the financial maelstrom in the past six weeks and present the government strategy to counter the adverse impacts of the looming world economic crisis on Malaysia.
(Speech at the Rasah DAP Solidarity Dinner in Seremban on Friday, 10th October 2008 at 9 pm)
#1 by yhsiew on Saturday, 11 October 2008 - 12:07 am
I hope Najis will not come up with more purchase of submarines and defense weaponry – the rakyat have had enough of that kind of hanky -panky!
#2 by peterchiang on Saturday, 11 October 2008 - 12:29 am
The optimism that there is no more Black days next week is commendable. Najib can offer excuse that market has yet to bottom out and a revision is not yet forthcoming
#3 by raven77 on Saturday, 11 October 2008 - 12:38 am
Good God…this is really turning out to be a disaster……will Malaysia survive….
#4 by BloodSucker on Saturday, 11 October 2008 - 1:34 am
The World Shares Markets are nose diving toward recession period. Malaysia export market will decline tremendously with poor foreign market.
Can Malaysia economy sustained to decline in foreign direct investment in Malaysia?
Can the new PM able to save the financial and economy of Malaysia ?
Can the new DPM is able to bring in more foreign investment funds via MITI ?
The commodities prices are decreasing daily the petrol price is zooming down , what happen to our petrol prices ?
IT IS A D-DAY FOR ALL MALAYSIANS TO BET ON NAJIB LEADERSHIP TO STIR UP THE ECONOMY AND FINANCIAL STANDING OR OTHERWISE, THE NATION WILL SUFFER IF THE NEW PM IS WEAK WITH POOR VISION.
#5 by Godfather on Saturday, 11 October 2008 - 1:51 am
This is rugby’s equivalent of a “hospital pass” – Najis getting the finance portfolio only for the market to tank, and there’s nothing that he or anyone else could do about it.
Only right thing to do is to postpone expenditure – the proposed Eurocopter purchase, the ongoing nonsensical corridors, the hydroelectric dams in Sarawak, the double-tracking projects. Will Najis do this for national interest or would he put UMNO’s interests above everything else and bankrupt the country ?
#6 by mrx on Saturday, 11 October 2008 - 5:49 am
Three new Polls on UMNO Elections: –
1. Who do you want as the new Youth Chief for UMNO?
2. Who do you want as the new Deputy President for UMNO?
3. Should Members of Barisan Nasional converge to form a Single MULTIRACIAL Party?
HERE – http://thexblogs.blogspot.com/
#7 by kyototan on Saturday, 11 October 2008 - 7:53 am
What new budget? As pointed out in YB TonyP blog the revenue from petroluem shall be very much less and the pump price is still at USD102/barrel. Now that the government is not subsidising the pump price but instead making income from it. The RON 92 petrol run out of stock in many petrol station even at today USD83/barrel price (83 X 3.50 /158). The good intention of helping motorcyclist by providing the cheaper RON 92 has gone hay wire. With such low oil price the government may only review the road tax rebate or just withdraw them.
#8 by Jimm on Saturday, 11 October 2008 - 7:58 am
Hello Guys,
These question can be only answer by Mrs NTR.
Who is NTR without her ?
This guy don’t know what is the golden rule in politic life until Mrs NTR came along and took over the driver seat.
We, rakyat will be fortunate to witness another ‘mishaps’ in umno government as what they claimed “RAHMAN”.
As this will be their final replacment before the whole umno goes into history, lets us just pray for a shorter suffering rather than a full term.
Mrs NTR, please answer our cries.
#9 by abunsui on Saturday, 11 October 2008 - 9:22 am
We don’t need MEGA PROJECTS if the rakyat suffer. We don’t want to proud of “TWIN TOWER” if there are still people who are aired on “TV3 – BERSAMAMU”
#10 by limkamput on Saturday, 11 October 2008 - 9:41 am
The US and the UK have the most number of top ranked universities but I think their economies are also the most scr*wed up. They practised go-go economics and thought they have free lunches forever. Of course while they were doing that, the rest of the world watched and urged them on. Now the whole world is paying for the free lunches and excesses others have taken years back. If the governments everywhere can create fiat money at will, there is no function for cost of money (interest rates) and savers. This is precisely what is happening – building one bubble bigger than the previous ones. The way they tried to resolve the crisis today will only help to build a bigger one in the future, we shall see.
To be fair, I think Malaysia is not as badly affected when compared to many countries but the reason is not because we are more prudent or cleaver. I think we are simply less exposed globally or may be we still do not know how to be as gang-ho as others. Imagine we have lots of money and started to buy Lehman Brothers, Merrill Lynch and UBS like some other countries’ sovereign funds. These countries also have higher ranked universities but I think many have probably lost their pants in their recent deals. There are simply lots of unknown out there.
So the moral of the story, please stop harping on university ranking ad nauseam. Good universities are important, but they don’t explain or account for everything that is happening in a country.
Before I go, let me share with you this story that I gathered from an email:
If you have difficulty understanding the current world financial situation, the following should help…
Once upon a time in a village in India, a man announced to the villagers that he would buy monkeys for $10.
The villagers seeing there were many monkeys around, went out to the forest and started catching them.
The man bought thousands at $10, but, as the supply started to diminish, the villagers stopped their efforts. The man further announced that he would now buy at $20. This renewed the efforts of the villagers and they started catching monkeys again.
Soon the supply diminished even further and people started going back to their farms. The offer rate increased to $25 and the supply of monkeys became so little that it was an effort to even see a monkey, let alone catch it!
The man now announced that he would buy monkeys at $50! However, since he had to go to the city on some business, his assistant would now act as buyer, on his behalf.
In the absence of the man, the assistant told the villagers: ‘ Look at all these monkeys in the big cage that the man has collected. I will sell them to you at $35 and when he returns from the city, you can sell them back to him for $50. ‘
The villagers squeezed together their savings and bought all the monkeys.
Then they never saw the man or his assistant again, only monkeys everywhere! Welcome to WALL STREET.
#11 by Kulim Folk on Saturday, 11 October 2008 - 9:45 am
Fall! Fall! Fall! It’s the word we heard everyday. The debate on the 2009 budget should focus in addressing the financial crisis that is hitting us. We would like to have a leader who can lead us to storm throu’ this financial typoon. Sad to say that, we never see any. All we can witness is the fighting for political survival of all the political leaders from the BN component’s parties. It’s a pity that as a “rakyat” in this country, we’ve no hand on the selection of candidate for PM . It’s the small clique of Supreme Councils of Umno who decided for us.
The 2009 budget shall be replaced with the new one by the NEW Finance Minister as what happened in the finnacial world has made it irrelevant . We want to see what strategies he has in place for us. We can expect the “old wine” to fill in a special sesign new “bottle”. The same old song to be sinnging by the new singer. Good luck, Malaysian!
#12 by taiking on Saturday, 11 October 2008 - 10:12 am
I first saw the universities ranking news in this blogsite. Our universities are out of the list of first 200 for 2 consecutive yrs. That was the revelation. But I did not realise that save for one uni (i.e. MU) the rest are actually not even within the first 300 universities ranked.
And the star papers reported yesterday that a certain idiot actually expressed satisfaction in seeing movement of some 10-20 places up the rank.
#13 by Bigjoe on Saturday, 11 October 2008 - 10:13 am
You want to know why they are not worried? In a simple answer – oil and palm oil. If you look carefully, while markets have fallen in excess of 20-30%, oil and palm oil prices have fallen by about only 10% in line with KLCI.
Unlike the previous crises in 1997, our corporates don’t have a lot leverage this time around so they are not hit badly by moderate decline.
So the short answer to why we are not in bad shape is WE ARE A LUCKY COUNTRY. Its not by design.
What is going to be hit are the promises – projects can’t take off because of poor demand and tighther credit. In other words, take all Badawi promises of spreading the wealth and throw it out the door basically – the rich will get richer and the poor poorer. They will be fewer riches to hand out and it goes to Najib core way of gaining support over the years.
The govt revenue will be down because oil revenue is going to be lower, so will taxes AND unless we want to break the budget, fiscal stimulus is limited too because Badawi hessitated for his entire career.
This is what happens when we throw away opportunities after, when hard times come, there is no room to manouvre.
Najib has to spend money in Sabah and Sarawak in particular but where is he going to get the money? He could abandon Badawi’s ‘corridors’ but will make enemies of Badawi, KJ and his cronies.
Najib has little non-UMNO political capital. He won’t get much of honeymoon outside of UMNO. And we have seen how UMNO political capital evaporate once those outside UMNO goes against it for a sustained period especially when Najib’s lacks his no 1 tool – patronage.
#14 by taiking on Saturday, 11 October 2008 - 10:17 am
limkamput said this:
“To be fair, I think Malaysia is not as badly affected when compared to many countries but the reason is not because we are more prudent or cleaver. I think we are simply less exposed globally or may be we still do not know how to be as gang-ho as others.”
That is very true.
I also think that it has something to do with the fact that there are not a lot of foreign investment interest in our shares. Therefore we are experiencing the same sort of sell down like in other countries.
#15 by limkamput on Saturday, 11 October 2008 - 10:24 am
Bigjoe, palm oil price has dropped from more than 4k a few months ago to less than 1.8 k and you said it was 10% drop? Crude oil too has dropped significantly from US$140 to less than US $85 now. Where do you come from?
One more than, don’t be fooled by percentages: if price goes up from RM2 to RM4, it is 100% right? If the price drops from RM4 to RM2, it is a drop of 50%. But the amount in absolute term is RM2. Got it?
#16 by limkamput on Saturday, 11 October 2008 - 10:26 am
second paragraph,
One more thing,
#17 by madmix on Saturday, 11 October 2008 - 10:31 am
If you read the papers, you will think that Malaysia is insulated from the rest of the world and in no economic danger: typical headlines and statements: Our economy is resilient; expect 5.5% growth slightly revised downwards 2009 (no possibility of recession, always growth). The recession in US will have minimal impact on Malaysia as our economy is diversified.
If you look at our economy, a large chunk of GDP is derived from the Petroleum industry and CPO. The prices of CPO and energy have tanked 50% or so. No effect on GDP growth? We export large amounts of electronic and wood based products to EU and US, again no effect on growth? Do not be surprised if we suffer negative growth next few quarters.
Overall the reduction in energy prices is far worse for the country than when oil was USD 130+. Even if you subsidised pump prices at old levels, we would have been better off than oil at USD 60 and no subsidy. The government cannot count.
#18 by dawsheng on Saturday, 11 October 2008 - 10:53 am
“To be fair, I think Malaysia is not as badly affected when compared to many countries but the reason is not because we are more prudent or cleaver. I think we are simply less exposed globally or may be we still do not know how to be as gang-ho as others.” – Limkamput
And it is fair to say that we are becoming more like Myanmar and North Korea.
#19 by limkamput on Saturday, 11 October 2008 - 10:58 am
Oh, of course the real sector will be affected when the major trading partners of Malaysia go into recession. What I was saying earlier was the financial sector – banks and other financial institutions may not be as badly affected like in some other countries.
There are many Malaysian unit trusts funds investing overseas. I suspect many of those will be adversely affected which in turn will affect Malaysian investors but hopefully not banks. This is just thinking aloud. I think the monetary authorities (Bank Negara, the Treasury and Security Commission) must start looking at the numbers and getting ready in case we are precariously exposed.
#20 by dawsheng on Saturday, 11 October 2008 - 11:02 am
When the economy is moving from bad to worst, is not that bad as compares to a good economy that plunges from top to the bottom due to global selldown. As it goes, the latter will regain its footing while the former will remains as it is, getting worst.
#21 by limkamput on Saturday, 11 October 2008 - 11:09 am
dawsheng,
i would prefer to be North Korea or Myanmar rather be a sucker of US. But the reality is whether we like it or not, the whole world is the sucker of US. It is just the matter of degree. The US dollars are not even worth the paper it was printed on it and yet the global financial systems are treating it like gold. What is so clever about East Asians other than competing to be poor – oh yes, keep our currencies cheap and let Americans consume goods and services produced out of sweat and blood and in exchange get those US dollars aka toilet papers.
#22 by dawsheng on Saturday, 11 October 2008 - 11:27 am
I wouldn’t go as far as accusing the US of sucking everybody although there are some truths in it. The world economy is working as though it is the sun rising from the east, unless there’s a total collapse and follow by a new world order which is unlikely, we’ll just have to continue to be suckers, it is after all, if it’s a crime, full of heinous criminals. Well, since we are going North Korea, there’s nothing much we a have to worry about, really.
#23 by pizi87 on Saturday, 11 October 2008 - 12:45 pm
najib’s no nothing about the economy… he has no plan how to handle the crisis and keeps on saying we’re in good shape! pls dont fool the people and leave it to people that knows how to manage the economy, there’s plenty of good leaders in PR which knows what to do and have better plans for the nation in terms of economic reform
#24 by Loh on Saturday, 11 October 2008 - 2:22 pm
The Finance Minister makes use of the budget to advance his own agenda rather than that of the nation. AAB wanted the agenda to take care of his interest with another one in 2009. Najib had the unforseen advantage to become FM made possible by Muhyiddin’s transition plot. He would love to present a revised budget immediately after March, if Ku Li is not PM by then. I feel happier with whatever delay possible before he has a big hand on the budget.
#25 by lofuji on Saturday, 11 October 2008 - 2:25 pm
The 2008 global subprime crisis(yes,it originated from here) is not much different from the 1998 Asian financial crisis.Back then in 1997(it started in Thailand,I think) but escalated in 1998.Most of the Asian socalled tiger economies were brought to their knees:Asian economies and currencies were attacked relentlessly by unseen hands and millions suffered(incl yours truly).TDM blamed it on Soros for this sordid episode.But was he really the one responsible? No one knows.What we do know was that before the D-DAy came upon us,there was almost daily announcement by our gurus(read ministers) and analysts that our economy is sound and currency stable.
What happened after that is now in the history books.Even Anwar had to be jailed in order to appease some demi-gods(but that’s another story).
Fast forward to 2007,we have the subprime crisis(no one in Malaysia knows what that is,initially).I had a premonition that it is going to be worse in 2008.True enough,it happened and this is just the beginning.
And we now hear the same old story from our Finance minister that our economy is sound and we are not affected by this global crisis;we will still register 5.5% growth.Can we really believe what the govt say when the last time they tried to remedy the situation,it became cancerous.So many ‘000K got laid off and many listed companies went bust.
My fellow Malaysians, the underlying message is :we must tell the govt to stop playing politics(if UMNO ppl want to kill each other off,that is their problem)We have enough of this for the past 6 months.We want affirmative action or else the nation is going to go down again and countless ppl will be jobless.Fo something!
#26 by AsalUsuLMalaysia on Saturday, 11 October 2008 - 2:42 pm
Lets pray MONDAY everything would goes well but i doubt for the worse has yet to come.
BANK NEGARA MALAYSIA should ALREADY start implement zero interest plan for trouble loaner in credit cards/housing/business loans in these days.
Everything seems to be complete halt but lousy UMNO politics in the country, what has done by our government in plan to cope with the troubled Nation had face today remains unknown.
US to buy stake in banks; first since Depression
http://news.yahoo.com/s/ap/20081011/ap_on_bi_ge/financial_meltdown
#27 by m.hwang on Saturday, 11 October 2008 - 3:21 pm
Has anybody noticed that since taking over the Finance Ministry all he talked about is the coming UMNO elections? The only finance talk that I heard from him is that unlike other countries, we are OK, sound fundamentals yada, yada… Does this worry you or what?
What about the aspiring DPM? Any policies to increase trade after almost 7 months helming MITI? Yilek!
If they are not doing anything I think the economic experts left in this country despite the brain drain better come up with something, present it in public and let the Rakyat pressure the government into doing something. There is another event unravelling itself besides the UMNO elections you know?
#28 by imranj78 on Saturday, 11 October 2008 - 3:41 pm
LKS,
It is of course very easy to criticize, but since you seem to think that the 2009 budget is not sufficient enough, maybe you can share some of your own thoughts and ideas? Since you have a lot of comments on the budget. I am sure you have some of your own ideas to improve it.
Like I said, it is very easy to criticize but what the rakyat is looking for are solutions and good ideas, not empty criticisms and empty talk.
#29 by mohrafael on Saturday, 11 October 2008 - 10:24 pm
najis will be worse than the current PM. heard of so many bad than good, he has still not yet stated any improvement initiatives ever since he was designated as a finance minister. it will be a sad time for malaysians.
#30 by isahbiazhar on Sunday, 12 October 2008 - 5:20 am
UMNO is busy with their politics.They are not bothered about the world economy.It is only paper loss and so it does not matter.Their infighting is going to cause the political meltdown and as such the country is going to face the worst economic challenge.Najib is not prepared because he still has the same economic advisers.We need new brains for new problems.It is not 1932 but 2008.
#31 by Godfather on Sunday, 12 October 2008 - 11:39 am
imranj78:
It’s not that the budget isn’t enough. It needs to be rebalanced to suit the current economic crisis. In any crisis, the worst hit will be the poor, so why are we proceeding with the Eurocopter purchase (at ridiculously inflated prices), the new palace, the double-tracking projects, the development corridors ?
On a matter not connected to the budget, why is Maybank paying 4.3 times book for a bank in Indonesia ?
#32 by imranj78 on Sunday, 12 October 2008 - 12:40 pm
Godfather,
Yes rebalancing might be the better word to use rather then not enough. The items that you raised (Eurocopter purchases etc.) are all valid queries even though I think some of them should proceed.
My point is, PR should be making factual criticisms, justifications and proposals rather then shooting blanks.
#33 by cinaindiamelayubersatu on Sunday, 12 October 2008 - 7:11 pm
lantak kau lah…black friday ke white monday ke…aku tetap kaya : pemimpin umno. kebelakangan ini disebabkan oleh penamaan calon pemimpin umno kelihatan ramai pemimpin umno yang mukanya keluar tv, mak datuk daging kat leher depa cukup sihat.ibarat kata terlebih dari cukup makan.isa dari N9 yang dah lama tak dengar cerita ; mat taib dengan wangnya yang berbillion di australia ; muhyiddin dari johor dengan ceritanya makannya semasa jadi mb apatah lagi sekarang ;ramai lagi lah…ahmad ismail pun wah wah wah daging dekat leher dia…bukan main sihat, itu baru pemimpin bahagian…. cukup sihat depa
#34 by undergrad2 on Monday, 13 October 2008 - 3:09 am
“The US and the UK have the most number of top ranked universities but I think their economies are also the most scr*wed up. They practised go-go economics and thought they have free lunches forever.” limkamput
What fu*cking rubbish are you talking about??
#35 by undergrad2 on Monday, 13 October 2008 - 3:11 am
Go-go economics and free lunch?? LOL