Sorry off-topic
From CheDet.co.cc

THE INDICES
By
Dr. Mahathir Mohamad
on May 8, 2009 9:40 AM | Permalink | Comments (0) | TrackBacks (0)

(This is the conclusion to the series on the trends that led to the present financial crisis)

///1. I have listed and explained a little on five schemes for making money out of non-business. The amounts of money involved in these money make money schemes are huge. The hedge funds alone handle 620 trillion dollars. The trade in currency involves 20 times the value of total world trade.

2. These money make money schemes are huge and the earnings of those who manage and invest in these schemes are equally huge.

3. They are not business because they produce nothing and they supply no services. They also create hardly any employment, nor spin off other productive business. ///– TDM

It is certainly not true that money make money ‘non-business’ do not provide employment, or that they have contributed nothing to the activities such as those for which the reasons why stock market and commodities future were established in the first place. The Russian MPS system used in their compilation of GDP until she moved over to SNA in 1990s would not have recognized services. Russia moved to SNA after compiling ‘productive GDP’ for seven decades.

///4. Yet the money they generate is real because they can be used to buy goods and services from the real business world.

5. The earners of this money i.e. the fund managers, the bankers and the investors are truly rich and they live the life of the wealthy.

6. Quite naturally the players, i.e. the fund managers, the investors and the banks and bankers make large sums of money. And their earnings must contribute to the national wealth.

7. Since we have developed indices for the wealth of countries, the Per Capita Income and GDP of the countries where these money make money games are played must be high.///– TDM

The same is true in almost all countries except perhaps Myanmar and Zimbabwe.

///8. But if we deduct the wealth from these schemes from the computation of the Per Capita and GDP, obviously the figures would not be as big as claimed.

9. The bubble has now burst and the true Per Capita and GDP can now be seen. And they must be much lower.

10. So the real Per Capita Income and GDP of the rich countries are really not so high compared to the poor countries whose Per Capita and GDP are based on real business.///– TDM

The bubble has now burst and the countries which are in recession are talking about minus 5% growth in GDP, or even minus10%. At 90% of what they had, Singapore, USA, Japan and many others having per capita five times more than that of Malaysia are still having four and half times more after the bubble has burst. That would be the magnitude comparing entirely on ‘real business’.

///11. The people in the rich countries who are furiously trying to regain their statistical wealth should not be in denial. You will never be able to recover to your pre-crisis self no matter how many trillions you spend on bailouts.

12. If you accept this fact than you may be able to end the slide to national bankruptcy.///– TDM

Conspiracy theories abound, but it is definitely incorrect to blame the statistical agencies of the countries responsible for compiling GDP statistics for being motivated to prove that the countries concerned were richer than others. They follow standards, not double standards, which are established by the United Nations Statistical Commission.

It is true that the claim for the right to intellectual property offers the developed countries more and easier income when the developing countries have to pay through their nose. But then when Malaysia had the potential to catch up in knowledge based economy, the people who were responsible for national policies were more concerned about their perpetual tenure to the development of the nation. The advent of NEP has sent over two million employable Malaysians abroad to become foreign nationals. The racist discriminatory policies in university enrolment and scholarship awards have prevented Malaysians of the wrong racial origins from fulfilling their potential, and hence Malaysia’s achievement in attaining high income earning capability.

One can wish that the west would never recover from the current crisis. But it might be more realistic for country to pursue proper race-blind policies so that in time the country could catch up with the west. But then it was always easier to be member of the rich countries through migration for those who had made huge profit such as in government or government services.