What financial crisis?’
Readers following the great national debate initiated by Minister Idris Jala in the Prime Minister’s Department on the possibility of the country going bankrupt must be thoroughly confused with the mixed messages from government.
On the one hand, we are told that the country is more prosperous than ever before and that absolute poverty in the country, for example, is almost completely eradicated. We are also told that the country’s economy is in good hands and that the finances of the country are well-managed.
Every few days or so, we are reminded of how fortunate we are to be living in Malaysia and how much foreign investors love us. Just a short while ago, it was trumpeted that our competitiveness had shot up this past year so that we are now ranked number ten in the world – ahead of many advanced economies.
We regularly receive a barrage of statistics and data on not only how well the economy is performing but also how, thanks to the outstanding economic management of the government, we will soon reach dizzier heights of prosperity and affluence.
The New Economic Model, it is claimed, will transform the Malaysian economy to become one with a high income and high quality growth. Presently, per capita annual income in Malaysia stands at RM23,100; under the NEM plan, that figure would more than double to RM49,500 by the year 2020.
Lucky Malaysians – according to the government’s plan – to be able to live in a land of milk and honey with fistfuls of ringgit to throw around and to be standing side by side with the developed countries in the foreseeable future.
We have been fed with this optimistic and glowing picture of the country’s economic prospects for so long that many of us can be forgiven for believing that we stand on the threshold of unprecedented economic prosperity if not greatness. Never mind that doubt –in the way of the impoverished in our slums, squatter and ulu areas – is often just around the corner, many Malaysians prefer to close their eyes to this reality.
Idris Jala’s wake-up call
Fortunately or unfortunately, thanks to Minister Idris, we have now received a dose of reality that our economic situation is more complicated and a lot worse than what earlier leaders and the government-controlled media would like us to believe.
Although a few recalcitrant leaders are still living in denial and claiming that the minister has misled Malaysians on the true state of the country’s financial health, a closer look at Idris’s speech during the open house on ‘subsidy reduction’ shows that his concern and warning on the country becoming bankrupt (in the same way as Greece is) was absolutely correct and spot on.
Idris’s warning is based on a number of economic projections including:
-
the country’s GDP would grow at 3% annually
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government debt continues to grow at 12% annually
Both assumptions are not unreasonable.
Average GDP growth has been slowing down in the past two decades. Prior to the Asian financial crisis of 1997-98, the country’s growth rate averaged 9% from 1990-1997. Between 2000 and 2008, growth rates fell to an average of 5.5%. If the trend of slowing growth continues, then the assumption of 3% GDP annual growth for 2011-2020 may well prove correct.
If there is no quick recovery in the global economy and we have a prolonged double-dip recession which seems more likely now following the ongoing financial crisis in the Euro zone, then even 3% annual growth in the GDP may seem optimistic.
As for the country’s debt, government debt in 1997 was RM90 billion. This has grown at a rate of 12% per annum to RM362 billion today. Based on a similar annual increase of 12% over the next nine years, the country’s debt will balloon to RM1.16 trillion by 2019.
The government’s own Performance Management and Delivery Unit’s calculations show that by the year 2019, the following economic scenario will be faced by the Malaysian government:
-
The country’s projected debt will be 103% of GDP
-
The fiscal deficit will reach RM449 billion or 38% of GDP
At that point, what will happen is that government revenue will not be enough to service its debt and to operate the hospitals, schools and other government services. In other words, the country will go into sovereign debt crisis, which is a polite way of saying that the country will become bankrupt.
The bigger subsidies are …
Where Idris went wrong is not in his assumptions and projections but in his focus on subsidies as the main culprit in the country’s perilous financial state. Addressing a public audience and as a member of the Barisan Nasional government, however, he was not in a position to finger the colossal wastage, inefficiency and corruption that has characterized Barisan rule and economic management of the country.
Yes, subsidies are part of the cause of our potential financial downfall but it is not subsidies to the poor that are to be blamed – in fact, the entire food subsidy bill in 2009 was only RM3.4 billion or less than the cost of the two recently purchased low-quality diesel submarines that cannot even dive properly! What is being spent on tolls, sugar, flour, cooking oil, school books, etc. is only a tiny fraction of what goes into the country’s black hole of defence expenditure (see attached box).
Instead of being fixated on subsidies to the poor, let us open the books on the subsidies that have gone to the ruling political elite and its business allies – the cronies, middlemen, consultants, and agents that are key to the massive binge of irresponsible government procurement in all sectors, especially defence.
Finally, it is also the subsidy of a huge, bloated and unsustainable civil service that is swallowing much of public revenue and helping to pile up our debt. Subsidies that have kept the cost of living down for the average Malaysian are only a small part of the larger subsidy equation.
The Black Hole of the Country’s Defence Expenditure
(Source:http://www.janes.com/articles/Janes-Sentinel-Security-Assessment-Southeast-Asia/Defence-budget-Malaysia.html)Although Malaysia publishes an annual defence budget figure as part of the government’s state budget, it is split into just two sections – operating and development expenditure – and it is widely thought that real defence spending is significantly higher than the official budget suggests. The official budget, for example, does not include defence industry funding, nor does it cover certain procurement items which are sometimes settled by other arrangements including barter agreements. What is certain is that actual spending has exceeded the official budget regularly in recent years. According to the Malay Ministry of Defence, expenditure in 2006 (the most recent year for which expenditure details are available) was 8.5 per cent higher than the budget allocation, with the majority of the overspend coming in the operations budget. This was not unusual as the degree to which military spending exceeded budget allocations has been steadily increasing since 2003, going from 3 percent in that year to 3.8 per cent in 2004 and to 5.5 per cent in 2005.2007 and 2008 saw further budget increases, fuelled in part by sustained economic growth of around 6 per cent in real terms, while the government has also seen increase in its revenues and expenditure. However, during 2007 and 2008 overspending was also recorded in the operations budget by 1.7 percent and 6.5 percent respectively with 2008 entailing an operations expenditure of MYR10.597 billion, whereas the actual allocation was MYR 9.939 billion. The 2009 allocation appears to have reflected this with MYR10.65 billion
Consequences of mismanagement
So what happens when the country becomes bankrupt?
When ordinary citizens or businesses become bankrupt, they can hide behind a court order and return to some kind of normal life thereafter. Those who have borrowed from Ah Longs, of course, cannot throw themselves at the mercy of the courts. They are more likely to be forced to rely on family members or friends to help them reach some kind of settlement or have to flee their aggressive creditors by changing their residence or even identity.
Countries that are in default do not have the luxury of changing their identity or getting a court to provide some measure of protection. In Argentina which defaulted on sovereign borrowings and debt repayment in 2001, the consequences were horrendous. The country experienced a brutal spiral of inflation followed by hyperinflation, soaring unemployment soared and a collapse in the currency.
The economy imploded, shrinking by 13 per cent in a year and the government was forced to cut public sector wages, slash the state pension and other social benefits. Unable to pay for goods with cash and with banks rationing withdrawals, citizens had to resort to bartering. Imported goods became unattainable.
Economic shock was followed by social trauma and political crisis. The quality of life of the average Argentinian was lowered drastically and many businesses closed or went bankrupt. Argentinian society has still to recover fully from the mismanagement of the country’s economy during the late 90s.
Let us pray – but prayer is not enough – let us make sure that the government never mismanages the Malaysian economy to the stage when we have to go through what the people of Argentina have had to suffer.
#1 by ENDANGERED HORNBILL on Thursday, 10 June 2010 - 7:08 pm
Has anyone noticed that this 1Najib guy seem to sense that his tenure as PM is going to be a shorlived one & I think he is trying to make haste while the sun shines; so this spending spree on mega projects and peripheral items that’s costing mega-bucks?
Do u guys sense that? I think he knows the end is near. Gut riddance.
#2 by a-malaysian on Thursday, 10 June 2010 - 7:23 pm
Plan after plan and nothing comes out of it except to bankrupt the country by 2019.
Another Plan, The 10 Malaysia Plan (10MP)..Does It Really Help?
GE 13 – Change The Federal Government No matter what, we must ensure that racist umno bn do not regain the power like they had for over the past fifty two years.
#3 by -ec- on Thursday, 10 June 2010 - 7:34 pm
keynes fiscal policy to drive economy is a short term solution to grow economy out of crisis, favored by short termisms and rent seeker politicians. as friedman criticized, keynesian economics could grow on nominal terms only and would bring stagflation.
malaysia should focus on long term contemporary institution economics to drive structural and fundamental changes. institutional changes bring long term sustainable growth.
#4 by -ec- on Thursday, 10 June 2010 - 7:39 pm
low growth? we had it for the last decade. high inflation? it will happen when the subsidies plug is pulled away and gst is brought in.
#5 by bennylohstocks on Thursday, 10 June 2010 - 8:54 pm
1BANKRUPT
#6 by ReformMalaysia on Thursday, 10 June 2010 - 8:57 pm
“………….Idris’s warning is based on a number of economic projections including:
the country’s GDP would grow at 3% annually
government debt continues to grow at 12% annually………….”
Perhaps one of the projection being omitted was……
3. that the country continued to be ruled by the corruption-prone Barisan Nasional
#7 by Jong on Thursday, 10 June 2010 - 9:28 pm
Very troubling indeed and I know this BN government is not telling the true state of our nation’s economy which they should.
Malaysia has one-third of the world’s total monarchs, does anyone know how much is being spent each month/year just to maintain the 9 Sultans, 4 Governors and their royal palaces/official residences?
Whilst we the rakyat are finding it difficult and struggling even to put food on the family table and now being threatened with ‘withdraw of subsidies etc’, what about them?
Don’t think we tax-payers can further afford to maintain their expensive lifestyles and that of their families. Lead by example your Royal Highnesses and Excellencies, please.
#8 by habis on Thursday, 10 June 2010 - 9:34 pm
The only way to save our country is to send all the corrupt BN leaders 2 jail and elect a new govt.They have been destroying our beautiful motherland.Just look how Brunei and Singapore manage their country. Time for a change. Hope our fellow East Malasians join us in our crusade to topple to save our country from all those Crooks who plunder our motherland
#9 by PRU13 @ pollkad.com on Thursday, 10 June 2010 - 9:37 pm
Doubts remain over Najib’s reform agenda @ http://www.facebook.com/group.php?gid=129006973786779
10MP Feedback
#10 by ktteokt on Thursday, 10 June 2010 - 9:38 pm
1 POKKAI!
#11 by johnnypok on Thursday, 10 June 2010 - 9:56 pm
We started to suffer from economic problem long time ago when the ringgit was in danger of losing its value, and almost touched RM4 to the dollar. The country was already bankrupt. The wife of PM donated some of her jewelries, and appealed for public donations. Petronas had to work overtime to pump additional barrels of oil to rescue BBMB on two occasions. Fortunately, the hard-working Chinese and Indians stayed back to rescue the economy. The situation leading to 2019 may not be so fortunate.
#12 by ENDANGERED HORNBILL on Thursday, 10 June 2010 - 10:30 pm
I find it very hard to make comments and analyse anything based on the Najib/BN government’s statistics because I know they are lies, damned lies and not statistics!
The Hungarian government lied about their economic data. The Greeks cheated on their books too, so i understand.
Now, since Malaysian Maverick’s times, Tun M had fine-tuned the art of the impossible with creative public accounting.
Puzzle: do we know what govt stats to believe anymore. It’s alaways the Houdinis or the Evil (Evel) Knievel or David Copperfield in our government that is killing our economy, ain’t it?
#13 by House Victim on Thursday, 10 June 2010 - 11:13 pm
So Najib did mislead and manipulated the figures in his “dispel fears of possible Bankruptcy”!!
1. So, the actual or more “official” total debt is 362 billion iso of 233.93 billion (let’s round-up as 234) as “told” by NJ.
2. Therefore, the Debt to GDP % mentioned by IMD as 53.73% is correct in 2009 when the Budget in 2009 was 207billion!
3. So, what is the difference of 362 & 234 =128 to be? And, since the Foreign Debt figure “presented” by Najib is also doubtful. Could this be for the Foreign Debt?
4. From all information available, including BNM (Bank Negara) Statement, there seems to have nowhere that the Financial situation of Malaysia can be traced, such as debt and Government Asset. What had invested in the past 30-50years have gone to WHERE?
5. Don’t forget there were/are at least 20 Corporations under the Ministry of Finance who have borrowing power had not provided Audited account to the Auditor General.
6. The Oil Money was not in the picture or full picture!!
According to IMD, they use 60% Debt GDP as the Cap “bearable” debt, depending on the International Reserve, the Government Asset, etc… Spain is in Great Trouble or in the ruin of Bankruptcy, by Debt GDP % close to 60 or over in 2010, Foreign Debt in 2009, Euro 55billion = 220billion RM. Yet their GDP in 2009 is 1.6trillium USD= 5120 billions (around 8 times of Malaysia’s).
SO ADMINISTRATIVELY, THE GOVERNMENT ALREADY BANKRUPTED IN HIDING OR MISPLACING THE FIGURES!!
Figures wise, it is close or already in the similar shoes as Spain and even worse, because Capability, Accountability and Transparency has already gone!!
The Financial cost of 362billions per year is already a snowball eating-up any possible Growth, even budget to remain at 207billion per year!!
All previous “mega” investment/project, besides being inflated they had not cut the cost of the production, efficiency or benefit the People with lower cost of living or higher employment. The bring up the so called “living standard” forcing higher salary but actually less buying power!! What happened in Spain is the growing of Unemployment coming to 25 or more!!
I WOULD AT LEAST SAY MALAYSIA: A BANKRUPT”ED” GOVERNMENT!
#14 by voice2009 on Thursday, 10 June 2010 - 11:23 pm
10th Malaysia Plan confirmed we are heading to bankrupt nation caused the government cant get rid of the country development blockage of the article 153 quota.
Those smart citizens should dissappointed the nonsense of the 1Malaysia after the announcement of 10th Malaysia Plan.
Talk only no guts to do it.
How can Malaysia be excellent when others national citizen share equally and work as one.
Malaysia here more interest in pracitising unequally among the citizen.
1Malaysia, talk only no guts to do it.
#15 by boh-liao on Thursday, 10 June 2010 - 11:26 pm
On d way 2 b a bankrupt nation, come 2020
Ha, ha, even datukship kena tarik balik bcos of ?? reason
Advice 2 all men: Don’t lah bcome an artificial datuk, b a real datuk dat cannot b removed fr U – encourage your children 2 procreate fast n furious
LKS is in fact a true DATUK, thanks 2 LGE n wife
#16 by chengho on Thursday, 10 June 2010 - 11:27 pm
johnnypok,
and the capital control 1998 , RM no value in Singapore bank , how many billion cameback to KL…
#17 by BoycottLocalPapers on Thursday, 10 June 2010 - 11:51 pm
According to Mahathir, Abdullah Badawi wasted $2 billion in Terengganu to build “Crystal Mosque.”
A few tips on how to save Malaysia from bankruptcy:
(1) Malaysia should spend lesser money on building places of worship. Most of the tax payer’s money is spent on unnecessary things such as mega mosques (e.g. “Crystal Mosque”) in Terengganu and the one in Putrajaya, new Parliament in Putrajaya, etc.
(2) Stop giving money to the Palestinians and Thai separatists in southern Thailand.
(3) Educate our own children instead of Palestinian kids (e.g. Nik Aziz should stop sponsoring Palestinian kids).
(4) Our country should stop relying on Indonesian & Bangladeshi workers as these workers will bring back our money to Indonesia & Bangladesh. How to stop relying on Indonesian & Bangladeshi workers?
There are many unemployed local “graduates” who are supposed to be taking the place of these Indonesian & Bangladeshi workers but they are not willing to do the dirty jobs because of their “graduate” status.
Without the “graduate” status, I’m sure many of them won’t mind filling up the jobs given to Indonesians & Bangladeshis.
I am not a graduate and because of my “non-graduate” status, I don’t mind working as a waiter in Singapore after STPM. Now, can you see the flaw of giving “graduate” status to undeserving students?
These so-called “graduates” shouldn’t have been allowed/forced to study in the public universities in the first place as there are many others who are more qualified (such as me :D) than these useless “graduates” but were not allowed to study in the public universities because they are not of “bumiputera” race.
So UMNO regime is actually wasting billions of Ringgit on useless & unemployable “graduates” who should’ve been doing the jobs given to the Bangladeshi and Indonesians.
Why is the UMNO regime wasting money on students who didn’t do well in SPM/STPM? Most of these students weren’t interested in studying in the first place. Why force them to study?
Why are you sending them to the Universities for free instead of sending more qualified students (like me :D)?
#18 by undertaker888 on Friday, 11 June 2010 - 12:04 am
datuk, datuk seri, tan sri, tun, all bestowed upon umno and bn could only indicate one thing – who is the biggest scoundrel of them all.
tun samy, tun mamak …hmmm u get the idea.
#19 by sheriff singh on Friday, 11 June 2010 - 1:11 am
Have they completed the investigations into the hundreds of millions of ringgits sent overseas by the Dato-datos, Tan Sri- tan-sris etc through the illegal muslim money changers?
This is a very big leakage.
No one is guilty?
#20 by boh-liao on Friday, 11 June 2010 - 2:33 am
Very funny, guy who skrued someone not his wife, guy who was caught running around with cash in bags, guy suspected of murder, guys who r into corruption n led d nation 2 bankruptcy in a few years 2 come CAN still keep their titles – ridiculous n illogical, right
#21 by House Victim on Friday, 11 June 2010 - 6:22 am
“The government’s own Performance Management and Delivery Unit’s calculations show that by the year 2019, the following economic scenario will be faced by the Malaysian government:
The country’s projected debt will be 103% of GDP
The fiscal deficit will reach RM449 billion or 38% of GDP
At that point, what will happen is that government revenue will not be enough to service its debt and to operate the hospitals, schools and other government services. In other words, the country will go into sovereign debt crisis, which is a polite way of saying that the country will become bankrupt.
======================
1. The fiscal deficit here is THE ANNUAL DEFICIT, and not the Accumulated!!
a) 2009 Budget is at 4.8% at 207 billions.
b) so for 2010 to go at 470billion and without other ADDITIONAL REVENUE, the Government will already be operating at a FISCAL DEFICIT of 263/680=38.68+4.8%=43.48% GDP of 2009.
2. GDP is Gross Domestic Product, it is not Government Revenue.
It is similar to Cost of goods which is produced but could be at a loss or profit. Any increase does not mean an increase of Earning or Surplus available to be spent!!
It may be related if and only if GST is to be imposed such that Government will have the Tax disregard if the Product is at a Loss or Gain!!
But, it will cost a fortune to collect GST and it will increase all cost for the Product, cutting competitiveness, creating burden for everyone. (Hong Kong has been postponed since 1997, but, they dare not take it up until now!!)
3. According to IMD 2009 report, Malaysia Debt GDP % is already at 53.73 in 2009. IMD sets 60% for some countries to run on a Deficit Budgeting. But, it depends very much on Cash Flow, Fixed Asset, possible annual surplus to come. And, surely if it is a CAT government. But, Malaysia does not even have one, (in my opinion), NOT EVEN UNDERSTANDING WHAT GDP COULD REALLY MEAN FOR BUDGETING AND OPERATION CONTROL. but only used to mislead the People for more Deficit Budgeting.
4. Deficit Budgeting should be an emergency measure to stimulate internal momentum during recessions or for Structural Reform for the better of the future. However, a number of countries, had shown that it crippled the Operation even future. Many example can be taken from the IMD report. Spain is one of them.
5. From BNM statement ending May 31, 2010, the cash flow of the Federal Government cannot even standing one month Operating Expenditure and not even to include the Development Expenditure.
6. Deficit Budgeting had been running for years in Malaysia which unfortunately does not mean to have a positive contribution to the economic. The Deficit Budgeting in 2009 at 207 billion is because the Government wants to paid one month bonus to the Public Servants….. with the misled of using GDP Growth. http://www.scsglobal.com.my/article/Budget%202009%20Summary.pdf
Government running at Deficit Budgeting is already in the situation where their Revenue ALREADY cannot cover their expense and not until 38% Fiscal Deficit!!
Any percentage can cripple or Bankrupted the Government if they cannot BORROW NO MORE MONEY, or, they are CANNOT MEET THEIR REPAYMENT. Externally, it is the International Reserve, and Internally, the Cash Flow or the least the Fixed Asset. That’s why Najib is emphasizing that the Government can meet 4.2 times short-term foreign Debt. BUT IS HE TELLING THE TRUTH ON THE AMOUNT OF FOREIGN DEBT? AND THE TOTAL DEBT?
7. FINANCIALLY, anyone is BROKE, when they do not have the Asset to balance their Debt!!
a) Where is the Balance Sheet for Malaysia to show what the full financial status of the Government?
b) The Debt (Domestic/International) and the Asset is not on BNM statement.
c) The Pension/Provident Fund is not there neither!!
d) The best Revenue of Malaysia – the Oil is not in the picture!!
What to base on to provide Debt to Malaysia Government or EVEN WITH BUDGETING?
BANKRUPTCY WILL COME ANYTIME, IF THE GOVERNMENT CANNOT PROVIDE ANY CREDITOR THE BALANCE SHEET TO PROVE THAT THEY ARE FINANCIALLY SOUND AND NOT BROKE!!
WITH ALL THE FLIP-FLOP AND MISLEADING FIGURES FROM NON-CENTRALIZED SOURCES AND EVEN THE PM, THE GOVERNMENT NEED TO PROVE THAT THEY ARE NOT BROKE!!
#22 by House Victim on Friday, 11 June 2010 - 7:02 am
Malaysia’s US$1.25 Billion Global Sukuk Rated ‘A-‘
=====================
KUALA LUMPUR – Standard & Poor’s Ratings Services on Monday assigned its ‘A-‘ long-term foreign currency issue rating to Malaysia’s US$1.25 billion global Sukuk trust certificates due in 2015.
The rating, Standard & Poor’s said in a statement, is based on the final offering memorandum dated May 27, 2010, and various agreements, undertakings and the declaration of trust, dated May 31, 2010.
The rating on the trust certificates of the issuer, 1Malaysia Sukuk Global Bhd (1Malaysia), reflects the strength of the transaction documentation, including the lease and purchase undertaking agreements.
Under these agreements, the sovereign as the lessee is obliged to make all payments needed to ensure that the issuer has funds sufficient to pay the certificate holders. 1Malaysia is a special purpose vehicle set up and wholly owned by the government of Malaysia.
The Sukuk is Malaysia’s first foray into global debt markets since its last external bond issue in 2002 and it is Malaysia’s second global Sukuk.
The sovereign credit ratings on Malaysia are supported by strong external liquidity, net external creditor position, and a diversified and competitive economy.
The ratings are constrained by sustained fiscal deficits, moderately high and increasing general government net debt and a moderately high level of contingent liabilities.
========================
The above is news from pagi.com
=======================
My questions or interpretations are
1. Is this a Government Trust Certificate?
2. But, then why 1Malaysia Sukuk Global Bhd (1Malaysia)
3. Why has to base on “final offering memorandum dated May 27, 2010, and various agreements, undertakings and the declaration of trust, dated May 31, 2010.” and NOT Government or BNM guarantee:?
4. What are the lease and purchase undertaking agreements that could reflect the Strength of Malaysia Sukuk Global Bhd (1Malaysia)
5. Will they be taken as part of Government Foreign Debt?
6. Where will it be accounted or reflected? Or, at least, it will not appear under BNM.
6. Since it is for payment at 2015, then 5 years is considered as Long-term.
7. What happened to the First one issued in 2002?
In this respect,
1) If this is the model of Government Debt, for 5 years as long term,then, within 5 years, Malaysia will be busy in repayment of the existing 362billions and not to mention any additional in due course.
2) Another copy of PKFZ fund raising?
3) A question should be posted to Auditor General on
How many these type of “special vehicles” are owned by the Government? And, are they in the book of the Government audited by the Auditor General?
Is Sukuk in the book?
DON’T THE MALAYSIAN GOVERNMENT HAVE ENOUGH CREDIBILITY TO ISSUE 1.2BILLION TRUST CERTIFICATE?
NOT UNTIL THE MINISTRY OF FINANCE CAN GIVE A FULL PICTURE AND LIST OF THIS TYPE OF WHOLLY OWNED SPECIAL VEHICLES WITH THEIR FINANCIAL STATEMENT, THE MINISTER IS NO MORE CREDITABLE FOR ANY FINANCIAL OPERATION!!
#23 by House Victim on Friday, 11 June 2010 - 7:06 am
Will this indicates that some project will go ahead or had agreement signed even without Parliament Approval? Similar to what had happened to PKFZ?
#24 by House Victim on Friday, 11 June 2010 - 7:12 am
The Ministry of Finance already broke,
a) When they cannot take up the responsibility on the manipulation or mis-appropriation of projects approval, such as PKFZ!!
b) when they have at least 20 corporations which had not provided accounts for Auditor General in 2006!
#25 by Bigjoe on Friday, 11 June 2010 - 7:43 am
If you look at past Malaysia plans, except for a few ideas here and there, most of the major plans basically are duds. Badawi also made plans to cut deficit by cutting spending but ended up being bailed out by high oil prices. There was also rosy plans of investments and growth figures and most of it fell short except when it got bailed out by rising markets in China, India, US or commodities.
Our system is not capable of planning. Our future depends a huge part on luck and the money we have to spend. THERE IS NO PLAN..That is why the plan sounds like wishfull thinking because it is. We have been very lucky for many years so no reason why we can’t be lucky for a while more..After all who would have thought that Singapore property market would quadruple since Mahathir left office to put billions into Najib’s hand..
#26 by HJ Angus on Friday, 11 June 2010 - 7:45 am
house victim provides some very interesting questions about the MoF companies.
My own belief is that the MoF should not be involved in running any companies as there will definitely be times when conflict of interests arise.
Even the PM holding 2 portfolios is a bad idea.
#27 by k1980 on Friday, 11 June 2010 - 8:28 am
Removing subsidies and imposing GST will make malaysia the richest in Asia
#28 by dagen on Friday, 11 June 2010 - 8:55 am
“On the one hand, we are told that the country is more prosperous than ever before and that absolute poverty in the country, for example, is almost completely eradicated. We are also told that the country’s economy is in good hands and that the finances of the country are well-managed.”
That is why we are caught in this really weird situation, going by what umno is telling us. In 2019 we will face bankruptcy and yet in the very next year, 2020, we will enjoy high income as a developed nation. This is exactly like an incoherent lie told by a child with bits and pieces of it made up on the go.
“The economy [of Argentina] imploded, shrinking by 13 per cent in a year and the government was forced to cut public sector wages …”
Interesting. The author didnt mention this. So let me point it out here. A shrinkage of 13% requires a growth of 13% to recover all lost ground. Wrong! 15%. So you see. Its hard to grow but easy to shed. How nice if this logic also applies to body fat.
#29 by limkamput on Friday, 11 June 2010 - 9:13 am
We have been talking about deficit reduction since 1998 when it first occurred in the aftermath of Asian Financial Crisis. Year in and year out, especially during the annual budget, the government will announce some fiscal consolidation measures. But what we saw is the continual ballooning of deficit irrespective of the state of the economy. In other words, irrespective of whether the economy is doing good or bad, the government must incur deficit in its annual budget to finance its operation. It shows the deficits we are now facing is structural, not cyclical. The government is too big, the wastage too colossal, and corruption to endemic.
Over time we should balance our book, i.e. some years of deficit should be counter-balanced by some years of surplus so that overall the financial position of the government is balance. However, what we have seen was that before we could consolidate, another “stimulus” was proposed and implemented with total carelessness and adventurism (you want to puke if you looked into some of the irrational stimulus programmes). If we take an average of RM20 billion deficit a year, the total deficit spending since 1998 was RM260 billion. Politics aside, I think as a nation, we have lost the way to govern and manage prudently our resources. Please don’t say the growth of this country was due to our prudent management and past leadership. Everybody knows it is not true.
#30 by dagen on Friday, 11 June 2010 - 9:15 am
You think so k1980? Umnoputras will then plot their subsequent scandals on the scale of 2 x pkfz.
Yeah. But seriously, GST works only if people have money in their pockets. GST is no robinhood. GST strikes everyone – men, women, children and senior citizens – equally (but not fairly) the very moment an economic activity is engaged. A 4% GST on a RM50 meal is nothing to those who earned a lot like say umnoputras. Only about (wot?) 20% of our working adults pay taxes. Using this as a convenient yardstick to determine one’s ability to meet GST payments, that means (wot?) about 80% of the working population (or something like 90% of the whole nation) would find it hard to bear GST. That would be like squeezing blood out of stones. Umno is heartless, cruel and savage.
#31 by ablastine on Friday, 11 June 2010 - 9:17 am
Projects and national spending in Malaysia has been and will continue to be creamed off by BN and cronies as long as they are in charge in the Federal Government. They will go for maximal extraction from the national treasury to enrich themselves and families because it has been so easy. All these battle cries from Perkasa to maintain NEP and status quo is of course aim at allowing such plunder to continue in the name of special rights and racism. One thing is certain. When the BN economist himself says the country is going to be bankrupt by 2019 you better believe that it is going to be sooner because he probably was painting the most optimistic picture. Second, when and if PR can take over it will be taking over all the shit left over by these scoundrel politicians who will be long gone to enjoy their immense spoils, compliments from an ignorant nation who have voted them in time and again. Things is going to be much worse for Malaysia before it can become better if at all. If the BN regime does not fall, the future of our beloved Malaysia is indeed extremely bleak.
#32 by boh-liao on Friday, 11 June 2010 - 9:41 am
Don’t expect things 2 improve
D flip-flop NR is a classic liar who said ‘2 succeed, we must b brave enough 2 think outside 2 box’
But he remains transfixed in d middle of d box
His affirmation dat d 30% Malay quota 4 corporate ownership would remain unchanged contradicted his NEM
On another issue, beware PR, MCA has given itself a 6-month deadline to consolidate n recapture Chinese support in d race towards d next general election, wooow, DAP si liao lah
#33 by boh-liao on Friday, 11 June 2010 - 10:05 am
Don’t forget d BN gomen is very good at covering up things n beautifying bad news
A recent example is d contradictory figures by gomen agencies on M’sia’s total subsidy bill (as reported by The Malaysian Insider)
Treasury: Total bill 4 2009 = RM18.6 billion, total bill per household = RM3,246
Semua OK, rosy
PEMANDU (Performance Management and Delivery Unit) headed by Idris: Total bill 4 2009 = RM74 billion, total bill per household = RM12,900
Scary figures, road 2 bankruptcy
At dis rate, drug users in d nation pok kai n no $$ 2 buy drugs 2 get high
Expect more ppl 2 steal used panties n bras 2 sniff them 2 get high loh, thanks 2 NR n BN
#34 by Jeffrey on Friday, 11 June 2010 - 10:07 am
House Victim, thanks for input, what you said – about lack of transparency about the real financial state – adds further alarm to an alarming situation. But frankly which Govt in the world give transparent balance sheet of its assets/liabilities???
Here subsidies affecting rakyat most are but a fraction of total subsidisation of wastage from mega projects, various affirmative programs (including feeding overbloated civil service) and defence expedtiture (pointed out by Lim Teck Ghee). For eg forgetting even the two Scorpene-class submarines which are subject of French investigation, why award without open tender Armoured combat vehicle costing RM8 billion to DRB Hicom as if the latter just because its car manufacturer has track record to this ???
To even reduce basic food subsidies they have already to think twice as it affects their vote bank more poignantly, much more to think of the NEM dismantling in stages the NEP or subsidies related to NEP, facing resistance from right wing groups.
If one believes kleptocracy, like NEP, is entrenched in system, then it will not abate but continues in its self feeding course…..whereas income generation is a big question mark in a milieu of NEP engendering brain drain instead of brain gain, capital flight instead of capital influx!
There is an obvious gridlook in this: one gives toll conecessions to politicians’ cronies as part of largesse and patronage. Toll concessions are subsidised. Govt could not afford and want to cut subsidisation. Crony toll collectors would not absorb. Neither will millions of car users unwilling to pay more for toll concessionaires benefit when subsidy is withdrawn.
On macro nation level there is always a gridlock where income generation prospects are dismal, wastage expenditure prospects continuing or increased – and deficit financing thereof – being real running all the way to 2019!
Per Lim Teck Ghee point – “As for the country’s debt, government debt in 1997 was RM90 billion. This has grown at a rate of 12% per annum to RM362 billion today. Based on a similar annual increase of 12% over the next nine years, the country’s debt will balloon to RM1.16 trillion by 2019” – and by then when our debt equals or exceeds our GDP, we’re done for!
To the first question: what’s likelihood on best guess basis of similar annual increase of debt of 12% over the next nine years? Answer – good.
And the second question : what’s likelihood on best guess basis our GDP remaining stagnant and won’t grow or have a corresponding increase matching expediture? Answer – also good.
On balance of probabilities, we’re done for!
Other related questions: What’s capacity of govt honoring guarantee of deposits in banks? And how long will our Property Market to which our people run for sanctuary to hedge against inflation and poor FD rate hold? Whats our gas/oil reserves by 2019?
#35 by victimofcorruption on Friday, 11 June 2010 - 10:45 am
I think we should promote this blog in our facebook/space/MSN etc.Or else no point keep ranting among ourselves here. We need the truth to be known by all Malaysians so that they can wake up from the nightmare.
#36 by caretakers on Friday, 11 June 2010 - 10:49 am
I think these politicians should start learning how to play this game Plants vs Zombies first so that they know how to better manage our country.
#37 by limkamput on Friday, 11 June 2010 - 11:10 am
By all means privatise some of our infrastructure projects, but for goodness sake they should be done properly. There was no protection of public interests in any privatisation project because the government that represents us (the public) is not capable of doing that. So all privatisation projects, in addition to the normal profits that they duly deserved, have become profiteering crony projects where no due diligence on costing and the rates to be paid by users are ever carried. I can say with 100% certainty all toll roads projects are sweet-heart deals saddled with cost padding, unreasonable toll rates and unnecessary government subsidies paid to the toll operators/owners.
The government has been talking about reviewing the tolls since before the March 8 election. Until now, nothing substantive has come up. Everybody knows nothing will be done because cronies’ interests are more important public interests. PM, you want to cut subsidies, this is what I will advise you: you stop subsidies payments to all the toll operators right NOW and freeze the toll increase for the next 5 years. I can assure you that the present toll operators will continue to make normal profit. If they are not able to, ask them to sell out (with the conditions that I have proposed so that the price would be reasonable). There are more capable people around able to deliver what I proposed, i.e able to operate the toll roads with no subsidy payments from the government and with no toll increase for the next five years.
Dear PM, there is no need to talk long and wide, NEM, GTP, PEMUDA and Pemudi. These are bunkums which carry no meaning to most of us. You identity all the wrongs that have been committed and make them right one at the time, then may be, just may be, you will continue to be the PM of this country.
It is good to talk about kleptocracy in concept. But I am asking you to dismantle kleptocracy with specific actions.
#38 by limkamput on Friday, 11 June 2010 - 11:17 am
sorry repost, mistakes:
#39 by Brats195 on Friday, 11 June 2010 - 11:25 am
Kick BN out!!!!!
Talking about RM800Million building in this difficult period,huh!!!!
Need a newer building or reason to spend money to enrich the cronies…..
Just nonsense….pure nonsense….Hopeless BN….Useless BN….
Kick BN out !!!
Don’t let BN touch our hard earned money ever again!!!
#40 by HJ Angus on Friday, 11 June 2010 - 11:34 am
The toll companies do not consider payments made by the government to be subsidies but what is due to them based on the agreements the government signed.
They are being paid compensation as the government want them to freeze agreed toll hikes.
The best thing for the government is to reveal all details of the toll agreements so that we can decide:
1.There is no legal basis to compensate the toll companies for a freeze in toll rates.
2.The government committed a real blunder in the toll increase clause.
To me the tolls should not be increased if the company makes more than 10% profit on turnover, based on a formula of agreed director/executive pay scales.
Also toll rate is fixed as long as the company has a soft loan from the government/EPF etc.
#41 by son of perpaduan on Friday, 11 June 2010 - 11:48 am
What main stream media report of result on our economy is just a figure for us to see or to know. The facts of living standard on our daily and monthly or yearly end meet portrait the real circunstances which is far and not tally with our actual living scenario. More and more people facing hardship in their end meet.
For ALLah sake, during the past 50 years ruling, Umno-BN control two third parliment which means easiy they can transform Malaysian economy to become one with a high income and high quality growth without obstacles from opposition barking, but now opposition denial their two third, how can Umno-BN claims that figure would more than double to RM49,500 by the year 2020.
TOO late to implement, malaysian of all race burden with debts from your mismanagement, corruption, disrimination and marginalization the chinese, tamil and even your own race.
All malaysian curse your goverment when they travel to work daily stucks in traffic jam, paying high toll rate and please..Mr. Minister..look at all the vehicles who stuck in the traffic jam, 90% above with only single person inside. How MUCH our country wasted??? Please tell the rakyat..Mr. Minister hooi…Look at the bus terminal…how you people manage??? Please Mr.Minister..pay a visit at Johor Larkin, Ipoh Medan Gopeng and Bukit Jalil too. Fcuk…Rakyat facing all this hardship lah, not you all bast*d Minister Fcuk again.
#42 by waterfrontcoolie on Friday, 11 June 2010 - 12:28 pm
Hj Angus, The objective of the Toll by the Master Builder was very very clear: to enslave Malaysians for the next TWO generations to support their Political programmes. See how smart he was! You pay BN to bercome their slaves! This programme is even more brilliant than than the discovery that the world is round. Malaysians, or at least the majority of them have been brain-washed so much so they will need another 5 generations to wake up. All those you thinking Malaysians can do is to tickle them and try to awaken them from their stupor; though I have some doubt as to the speed they can be done. Hopefullu before we all go bankrupt!
#43 by HJ Angus on Friday, 11 June 2010 - 12:44 pm
Yes the first toll agreement was indeed a master-stroke to get us “enslaved” to never-ending tolls. Remember how the agreement was tweaked when they “upgraded” the highway and gave a further extension on the toll period.
If grading works can cause an amendment, why not also amend the clause of future rate hikes? After all the government is a major share-holder.
#44 by boh-liao on Friday, 11 June 2010 - 1:35 pm
It’s actually very easy 2 understand Y Umno/BN gomen signed d obviously stupid toll agreement dat enslaved rakyat but enriched d company directors n shareholders
Who else but Umno/BNputras n their relatives, n also royal members, r d company directors n major shareholders
D rakyat truly kena sodomised kuat kuat by Umno/BNputras
#45 by k1980 on Friday, 11 June 2010 - 2:06 pm
http://www.ipsnews.net/news.asp?idnews=51750
…it was revealed that companies received 18 billion Malaysian ringgit out of total subsidies of 74 billion ringgit in 2009. In contrast, the poor received only 1.7 billion ringgit.
D rakyat truly kena sodomised kuat kuat by Umno. But unlike saiful, they defaecate and the dna was lost. So no case to take to court
#46 by dagen on Friday, 11 June 2010 - 4:19 pm
Someone mentioned the keynesian thingy. I said “thingy” because it really is outdated. Here in malaysia we are way better because we have jibbonomics – the economics of flipping patties.
Perkasa and umnoputras are really and truly rotten. They are way beyond salvage. Hopeless. Incurable. Dont even let them rot. Just kick them out. And do it decisively and quickly. Digusting. I mean look at the indon kiddie who smoked 40 cigs a day. A two year old child. Even he is begining to kick his addiction. And umnoputras have the audacity to say that they are still dependant on the nep and that they cannot even begin to kick that nep addiction!
#47 by Dipoh Bous on Friday, 11 June 2010 - 7:50 pm
[deleted]
#48 by siamo on Friday, 11 June 2010 - 8:10 pm
[deleted]
#49 by boh-liao on Friday, 11 June 2010 - 9:44 pm
Smart ppl shd b like UmnoB/BNputras transferring RM out of d country n keep d money in other currencies
Soon RM just like banana notes – bagful of them dat no one wants or 2 exchange 4 1 egg
#50 by boh-liao on Friday, 11 June 2010 - 9:53 pm
NR announced d 10MP
Good meh? No lah, just like doing d ronggeng, occasionally 3 steps forward, 2 steps back, but most times, 2 steps forward n followed by 3 steps backwards
Mana ada progress? Bankrupt ada
#51 by House Victim on Friday, 11 June 2010 - 11:38 pm
#26 by HJ Angus on Friday, 11 June 2010 – 7:45 am
1. If one cares to read those Acts governing the setting up of Corporations under MOF, the “freedom” to set up and financing/accounting had already made them quite Independent from the Governmental Administration and a monopoly outside the touch of the Parliament. It is against a good governance practice. Further problems, is many could even be under NO Acts!! Such as 1Malaysia Sukuk Global Bhd (1Malaysia) and those raising funds for PKFZ. A responsible Parliament should invalid such kind of company as they have no right to Represent MOF without the approval of the Parliament. Any violation of proper procedures will have to face personal responsibility.
2. From the understanding of the PKFZ project, the Parliament is powerless or even had been skipped with the necessary approval procedures. So, basically PKFZ is an illegal project.
What ends up today, is because of a BIAS constitution, crippled parliament and absolutely over-power of the PM with no fear of mis-appropriation, misleading, or, ……
PR should motion a No Confident Vote, as the Government had not been able to present the whole financial picture of the Government and in many cases been distorting or misleading or even deceiving the figures.
This is to let the People see that PR is exercising their responsibility relaying to them during 3.8.2008. At the same time see how how many Red Herrings that PR have!!
IT IS NON-SENSE FOR THE PM OFFICE TO PROVIDE MISLEADING & ….. INFORMATION FOR DEBATE AND APPROVAL IN PARLIAMENT!!
Such is not what a Responsible Administration should do!! This should not even happened in a properly managed company or company who should follow a reasonable accounting and auditing practice.
#52 by House Victim on Saturday, 12 June 2010 - 12:20 am
#33 by Jeffrey on Friday, 11 June 2010 – 10:07 am
House Victim, thanks for input, what you said – about lack of transparency about the real financial state – adds further alarm to an alarming situation. But frankly which Govt in the world give transparent balance sheet of its assets/liabilities???
=====================================
The Euro Countries, Canada, USA, Singapore, Hong Kong, etc….are doing it.
1. Those doing it are working with system under Laws. That’s why even Greece can get help from the Euro Country as well as Brazil. Those who see that to be done are ethical, or, else it is non-ethical.
2. Even a simple S/B company have to present a balance sheet with Asset and Liabilities. So, why should the Malaysian Government be skipped? Especially, when they need to raise fund. It is a joke when Malaysian Government cannot even raise 1.2 billion USD by itself! and Najib seemed to have gone to US to market something like 1billions USD bonds?
3. If not presented, how can the Parliament debates and approve the budget. With a distorted information knowingly that they are not correct with the intention of leading people into a wrong decision is nothing less than DECEIVING!!
4. Having accounts or Companies outside the proper account, in my opinion, is MISAPPROPRIATION!!
5. Declaring responsibility to one who does not have the legal responsibility is WHAT??
The Country has no liability towards what MoF suggested or promised if they had not been properly approved by the Parliament.
YET THE PARLIAMENT HAS A DUTY TO PROVIDE THE NECESSARY TRANSPARENCY, ACCOUNTABILITY TO THE PUBLIC UPON RECEIVING THOSE FROM THE CABINET!!
The problem of Malaysia is it has been run by Crony Politicians and not by Laws!!
Jeffery, are your with the People to go by laws or are you a Politician?
DON’T EVEN INDICATE THAT MALAYSIA IS FOLLOWING THE NORMAL INTERNATIONAL PRACTICE!!
WHY THE FINANCIAL SITUATION BE EXPLAINED BY THE SO CALLED “Performance Management and Delivery Unit” and not the Ministry of Finance + the Auditor General, the BNM?
Shouldn’t Najib be using data from all these Departments including the Statistic Department?
And, why the Parliament is not discussing, debating with data from all these Department but depending on Oral presentation?
The Main Issue is NO ONE HAS EVER PRESENTED the full set of information necessary for all these exercises?
=====================================
What DO PROPER PROCEDURES MEAN TO THE GOVERNMENT/PARLIAMENT, POLITICIANS & THE PEOPLE in Malaysia?
#53 by johnnypok on Saturday, 12 June 2010 - 3:54 am
If Malaysia bankrupt, who will help us?
Maybe Mugabee will call TDM and pretend to drop tears.
#54 by yhsiew on Saturday, 12 June 2010 - 7:02 am
Judging from the way the BN government spends money, Malaysia could be half-bankrupt in 2019 even if it is not fully bankrupt.
#55 by Jeffrey on Saturday, 12 June 2010 - 9:21 am
Re #1 by House Victim on Saturday, 12 June 2010.
If one uses company’s balance sheet as metaphor for govt’s budget, there is no contention.
Surely a country’s budget (disclosed) is look alike of a company’s assets and liabilities position in balance sheet but still as a norm they’re not the same.
Though both ought to be as transparent as possible, in company’s case the directors signing financial statements as true owe it to shareholders/investing public higher fiduciary degree of disclosure but in any government’s case, though govt is considered trustee of people’s welfare has an excuse that national security – and by extension full transparent disclosure- is neither to people’s or country’s interest – never mind whether that is true in some cases and not so true (as a veil to hide corruption) in other cases.
Just take one example, does Singapore government give a full disclosure of its reserves (as a normal company does in its BS)? I think LKY said that except in general terms it was not to national interest to bare everything in terms of details!
Singapore Government Investment Corporation (GIC) set up in 1981 to manage the country’s foreign reserves which are said to exceed S$181 billion (US$100 billion) – one of the highest in the world, thanks to the country’s high savings rates – is a company owned by the government, under the purview of the Ministry of Finance investing in global equities, real estate, venture capital funds and in cash instruments, but it is no ordinary company in that the law exempts it from filing balance sheets, profit-and-loss statements, publish annual reports or report to parliament. It is only accountable to the accountant-general, auditor-general and the president, to whom it submits its financial statements and proposed budgets. The special company is chaired by the elder statesman Lee Kuan Yew, while his son, the deputy premier, Lee Hsien Loong, is the second-in-charge.
Even in the case of military expenditures – point raised by Dr Lim Teck Ghee – governments vary in degree of transparency citing national security for non disclosure of certain items and justifying disclosure on other broad items to alleviate anxieties of neighbours feeling threatened in mitigation of miscalculations of perceptions of threat.
Perhaps I took too literally House Victim’s B/S Assets and Liabilities analogy as I was wondering how or which government discloses valuation for example of its land assets if any and disclose it in its accounts/budget?
#56 by yhsiew on Saturday, 12 June 2010 - 9:38 am
Here are some “spending madness” of the BN government:
1. Build a new parliament when the country is heavily in debt.
2. Give every university student a free laptop.
3. Entice voters with generous gifts during every by-election.
Such thoughtless unbridled spending will propel the country to early bankruptcy.
The words “frugality”, “thriftiness” and “economize” simply do not exist in the BN dictionary.
#57 by HJ Angus on Saturday, 12 June 2010 - 10:27 am
Bribing voters with gifts during elections is not considered “spending madness” of the Bankrupsi Negara government.
It is deemed a necessary strategy to hoodwink the voters to keep them in power.
It does not matter one iota if the nation goes belly up in the process.
After all it is just taxpayers’ monies – so the voters are fools if they vote in this kind of government.
#58 by k1980 on Saturday, 12 June 2010 - 12:00 pm
//2. Give every university student a free laptop.//
The family income and ethnic composition of each and every secondary student given a laptop should be compiled to ensure that fairness prevails. It may turn out to be like the psd scholarships fiasco, with its 80:20 ratio.
1malaysia needs to be replaced by 80:20malaysia. Tuans get 80 and pendatangs get 20.
#59 by House Victim on Saturday, 12 June 2010 - 12:09 pm
#4 by Jeffrey on Saturday, 12 June 2010 – 9:21 am
==========================
Thanks for input. What are normally taking as exception for details can be applied.
BUT,
1. Do you think, the Government should keep 20 companies (or more) away from Auditor General?
2. Do you think the Government should raise money as bond or Trust Certificate without the approval by the Parliament? Especially by companies which is not on open record with the Auditor General?
3. Even without details, or, skipping the sensitive parts, like national defense, should the Government not putting all the financial figures in one picture?
4. Why is Najib distorting the debts figures?
All these have nothing to do with national security that you had mentioned.
5. Government is said to be a major shareholder of Plus, is the share being included in the Government account?
6. How about the Provident Fund and Pension where ALL those who contributed should have a Rights to know where they are. Any figures in the Government Asset/Liabilities?
7.The reasons why the national expenses is not open, it is because there are a lot of hanky-panky. The price of the Submarine or those marine vessel are much over-priced!!
They are irregularities and dishonesties and not in the scope of “exception” that you have mentioned.
The PKFZ case is a typical example of manipulation, mis-appropriation of power and finance, violations of procedures which does not qualify it to be terms as a Government project. But, the losses are accounted!!
WHAT SHOULD BE ACCOUNTED ARE NOT THERE. BUT, what SHOULD NOT BE ACCOUNTED ARE THERE!!
#60 by Jeffrey on Saturday, 12 June 2010 - 12:43 pm
I always maintain govt should be transparent as far and possible including the matters raised by House Victim in #8.
That aside, my postings merely point to the limits of treating a budget as if it were a company’s balance sheet – they are not subject to parallel considerations on all fours – and are not intended to defend non disclosure as a means to facilitate “irregularities and dishonesties”.
#61 by HJ Angus on Saturday, 12 June 2010 - 4:02 pm
The government is using accounting principles like the big banks that failed to disclose (or rather actively concealed) their positions in junk bonds.
#62 by House Victim on Saturday, 12 June 2010 - 7:50 pm
#4 by Jeffrey on Saturday, 12 June 2010 – 9:21 am
Just take one example, does Singapore government give a full disclosure of its reserves (as a normal company does in its BS)? I think LKY said that except in general terms it was not to national interest to bare everything in terms of details!
——
In general, most people will not need it in details. But, at least it should be mentioned so that needed it can be traced. And, they have liabilities to disclose at least to some parties, such as Parliament.
But, here in Malaysia, the Government even tried to skip the HEADing, therefore, People has no way to ask for details. And, even if asked, such as PKFZ, the Government, especially the Cabinet, or at least the PM. MOF, and the Minister concerned just keep silence, ignoring their RESPONSIBILITY.
————————————————–
how or which government discloses valuation for example of its land assets if any and disclose it in its accounts/budget?
————————————————–
Land is a basis CAPITAL for a Government to base on for Quit Rent income for the State. So, it can be reflected somewhere. And, it is a important BASIS for People to see the Potential of Future Development. A great number of Developed country or even Developing countries are more than please to put it in a noticeable place. Dare PKNS shows what they have when a lot of their land were in fact by way of mis-appropriations? PKFZ land is much inflated!!
Assessment for Building is Revenue for the local Government, therefore, it should be displayed somewhere. But, how many local government dare to show openly how much they have for income and how much they had spent?
If a Government depending quite a bit on Public Loan and they do not show their Asset, they are stupid. And, those lending money or deposited money to a Government without a full picture of what the Government is having and how they run the administration is the same. Only a CAT Government can convince the People that they have way to put a stable or even higher interest to People’s deposit.
Do the Government operate well so that they pay better to the P Fund? I do not see there are sufficient evidence to confirm it. But, some cases had shown that they had been used to cover up the Holes of the mis-managements.
PLEASE TRY TO SEE WHAT THE GOVERNMENT SHOULD DO AND NOT TRY TO GIVE ANY UN-RELATED EXCUSES!!
When a Ship is sinking with holes, try to find the holes and fix them. And, not to hide them with LIPS!!
#63 by Jeffrey on Sunday, 13 June 2010 - 12:41 am
///When a Ship is sinking with holes, try to find the holes and fix them. And, not to hide them with LIPS!!/// – HouseVictim
Best Practices to an extent talked about by House Victim will be adopted by government in Utopia. He mentioned the Euro Countries, Canada, USA, Singapore, Hong Kong, etc in posting #1 but does any govt of these for example publish values of land owned by govt in its budget or other disclosed financial documents? Financial assets yes but landed assets?
What for example is the value of (say) all landed assest owned by government of Malaysia? All lands in entire country other than those already alienated to individuals/corporations belong to the state : so how to value (when they are not yet alienated)?
I however agree whatever quantifiable whether assets or liabilities should be disclosed, and even then when it comes to military expenditure there are national security concerns put up as excuse for non disclosure.
[Sometimes these excuses are real concerns, other times a cover for corruption but how is citizen to differentiate and challenge?]
Even in “squeaky clean” Singapore, the government, as I mentioned in #4, does not disclose to public in entirety all financial details of GIC’s reserves and their deployment.
I would imagine that amongst budgets world over some are more transparent and detailed than others; that “stealing” goes on in most governments (whether developed develping or undeveloped countries) by elites and officials, varying in degrees the extent and blatancy.
To pressure one’s own govt to disclose more and cheat less, one has to use “reasonable’ comparative “peer” benchmarks like if these other countries A, B and C and quantify this asset or that expenditure and disclose it to their peoples, why can’t you?
This is already hard enough to do, let alone try to persuade or pressure one’s government why its not entirely transparent about all assets including values of its landed property assets – at both Federal and Municipal level – when no other governments in the world quantify and disclose these!
To say this is not to defend obfuscation and hiding of information whether by this or other governments so that dishonesty and stealing could easily be perpetrated by politicians and officials… It is merely to point out what reasonably could be done and its practical limits by ordinary citizenry.
If we argue from utopistic and absolute standpoint we ghet nowhere in the discussion.
#64 by House Victim on Sunday, 13 June 2010 - 6:18 am
#12 by Jeffrey on Sunday, 13 June 2010 – 12:41 am
——————–
Best Practices to an extent talked about by House Victim will be adopted by government in Utopia. He mentioned the Euro Countries, Canada, USA, Singapore, Hong Kong, etc in posting #1 but does any govt of these for example publish values of land owned by govt in its budget or other disclosed financial documents? Financial assets yes but landed assets?
—————————–
1. Malaysia was among or even ahead of Hong Kong and Singapore “some years” ago and certainly also some Euro countries who were still under the Communist, or, countries like Turkey, Greece, etc.. In this respect, should Malaysia be termed as Utopia country during that period? And, now the reverse!!
2. Surely, one expects alienated land to be valued and not those not for Development. In many countries, they are termed as Land Reserved for different purposes. A great number of countries are using this to invite Foreign Investment as possible “capital” from the Government.
3. If only financial asset, then, is PKFZ being listed? Has Subang Square be listed where MPPJ “was” supposed to have a share? How many land Asset does Plus hold with “Express Way” going over different States – accounted or just by way of mis-appropriation?
4. In Malaysia, a lot of the Government Properties dare not listed as then they will be subject to survey. Can they survive when a lot of the building cost were much inflated?
The problem is not the “full details” are not there. But, even a line of information is missing there!!
What should Transparently do accounting and auditor wise should be there. Any exception should provide sound explanation which can stand challenge. When there are “prima facie” doubt, omissions, non-consistent, irregularities, the Government has an OBLIGATION to clarify, testify with sufficient documents for verification.
Are the following utopian to seek clarifications from the Government on
1) Where are those Creditors account and their terms – period and rates…?
2) Where are those P F and Pension in the Government Financial Statement?
3) Who are those companies or Corporations under the MOF and where are their audited accounts?
4) Why the Ministry of Finance, the Auditor General, BNM, etc. is not providing the Prospect or forecast of the Financial situation of the Government but by a so called “Performance Management and Delivery Unit”? Using indexes, but not the Debt to GDP %? Which even for those “utopian” countries, it would be capped at 60%. And, for Malaysia, a “non-utpian” country (as could be defined by Jeff) with 362billion Debt and 680billion GDP by 2009, it is already 53.,24%!! Can 12% be applied even once more??
a) It is misleading and confusing to use the past “average Fiscal Deficit of 12% to project 2019. As basically, deficit Budget should not be an habitual policy of a responsible Government.
b) 5% Interest for 362billion is already 18.1billion. It is already bigger than all the Subsidies!!
c) With the interest Rate at 5%, Growth on GDP at 3% , fiscal Deficit at 12% per annum, Debt to GDP% already go up to some 68% in end of 2010. By 2012/2013 it is already 100%. Total Debt will exceed 1 Trillium by 2014/2015. By 2019, it will be over 2 Trillium!!
5) Base on what Najib is saying the country is sound with Total Debt and Foreign Debt but what had been provided are indicating otherwise!!
a) When Najib mentioned total debt to be some 234billion in 2009 but Idris said it is 362billion, then, where is the discrepancy of 118billion!!
b) When the SHORT-TERM Foreign Debt in 2008 is already 80billion, should it be less than 20 billion in 2009 as what is indicated by Najib? Yet the Total Foreign Reserve under BNM is only 95 billion!! So, should the Total Foreign Debt be CLARIFIED!!
c) Greece has Euro 106 billion (RM424billion) and Spain has Euro 44billion (156billions) foreign Debt. And, they got help from EC members and even Brazil. They are “Utopia” and so can get help. Where can Malaysia get??
d) Greece, Portugal, Spain, Italy and Ireland have significant current account deficits. – The Cash Flow. From BNM statement and the Budget for 2009 & 2010, is Malaysia better off when the Cash for the Federal Government is not even good for ONE MONTH Operating Expenditure??
6) Where have all the previous Development Expenditure gone?
THESE ARE WHERE I HAVE COME TO!! ARE WE IN NOWHERE OR JUST SOMEWHERE??
Please read at least the IMD briefing where Malaysia “could be” proud of instead of “imagining” where YOUR Malaysia should be!!
I stand on the following to come to here:
1.http://www.imd.ch/research/publications/wcy/upload/PressRelease.pdf
2. http://www.bnm.gov.my/index.php?ch=12&pg=142&sdate=2010-05-31
3. http://www.statistics.gov.my/portal/index.php?option=com_content&view=article&id=447:gross-domestic-product-gross-national-income-updated-13052010&catid=35:key-statistics&Itemid=53&lang=en
4. http://www.scsglobal.com.my/article/Budget%202009%20Summary.pdf
5.http://finance.klmanagement.com.my/malaysia-budget-2010/
6. http://blog.limkitsiang.com/2010/06/08/pm-dispels-fears-of-possible-bankruptcy/comment-page-1/#comments
AND, WHERE DO YOU STAND??
#65 by HJ Angus on Sunday, 13 June 2010 - 8:48 am
We always compare Malaysia and Singapore; about how the tiny dot has grown without any natural resources except a strategic position and human capital.
When it first started, even the human was not really great as the population had some leaning towards Communism and unemployment was high – so things looked rather bleak for them.
In comparison, Malaysia was beginning to enjoy the palm oil boom plus the oil bonanza.
But that is where the 2 nations diverged.
Singapore’s leaders managed to convince people that a few years of tough endurance would improve their future and the people responded; even accepting the 2-child policy that has been so hard to reverse even when the government now offers generous benefits for children.
In Malaysia, some leaders hijacked the noble intentions of the NEP to enrich themselves and their families and the people slept as they were given some scraps off and on like some subsidies for basic items.
The economic comparison between the 2 nations is now quite startling – Singapore is probably rated triple A+ whereas Malaysia ranks triple B-.
The basic reason for Malaysia’s failure in nation-building is that Bankrupsi Negara leaders are corrupted and cannot take action against the less corrupt.
#66 by Jeffrey on Sunday, 13 June 2010 - 2:00 pm
Re House Victim’s posting #13, it is good you researched and raise/ask those questions. I think they are legitimate. However I have lost the thread of argument, if there were one.
It has never been my (original) position that the Malaysian Government’s or Najib’s disclosures were transparent enough or more transparent than those of more developed countries.
My original position was that the government’s ‘balance sheets’ are not comparable to that of a company’s in terms of full transparent disclosure; and even then degree of transparency is relative depending on governments. From that I would not wish to be ushered by the drift of your exchange to another extreme position that I have never taken, which is to argue that Malaysian govt’s figures are transparent enough to be defended.
#67 by sotong on Sunday, 13 June 2010 - 3:15 pm
Semua OK….from under the coconut tree.
#68 by House Victim on Sunday, 13 June 2010 - 9:30 pm
#15 by Jeffrey on Sunday, 13 June 2010 – 2:00 pm
“… I would not wish to be ushered by the drift of your exchange to another extreme position that I have never taken, which is to argue that Malaysian govt’s figures are transparent enough to be defended.””
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Sorry for “misleading” a bit!!
I believe the most I wish to “usher” are
1) The Completeness of information to allow People to have a Clear picture of What Malaysia Government is having and so to comment on what they are budgeting.
2) The honesty or sincerity of providing information and the way how they “usher” the People into a blur picture of NOW and the Future.
The Balance Sheet is only an effect of the mentality or attitude. The latter are the cause of the mess of many others.
Thank you for your inputs on the “Balance Sheet”!!