Archive for category Economics
The last days of Umno are beginning
Posted by Kit in 1Malaysia, Anwar Ibrahim, Dr. Chen Man Hin, Economics, Najib Razak, NEP on Thursday, 19 January 2012
By Dr Chen Man Hin, DAP life advisor
UMNO shows no signs of genuine reforms despite claims by PM Najib that UMNO is on the reform road as shown by the verdict of freedom for Anwar over the Sodomy 2 conspiracy. If there are no signs of reforms than UMNO will collapse in time, similar to what happened to the Soviet Union which collapsed in 1990.
Like Najib, Mikail Gorbachev tried to save Russia with his policies of ‘glasnost and perestroika’ but these failed to save Soviet Russia, because he could not introduce democracy and economic restructuring as there was no policies or infrastructure to modernise Russia.
Najib is also claiming that he has great plans to reform the country, ever since he introduced his 1 Malaysia program. However, all he had to deliver are just promises. Nothing concrete he promised to cut down corruption, but every day corruption is the rule in government departments, judiciary and the police. Events have overtaken Najib and there is no way he could reverse the corruption cancer pervading the country.
Read the rest of this entry »
Guan Eng says national debt ‘dangerous’, potentially disastrous
Posted by Kit in Economics, Finance, Lim Guan Eng on Wednesday, 11 January 2012
By Shazwan Mustafa Kamal
The Malaysian Insider
Jan 11, 2012
KUALA LUMPUR, Jan 11 — Massive borrowing and irresponsible spending by the Barisan Nasional (BN) government will result in Malaysia becoming a fully indebted nation before the end of the decade, Lim Guan Eng said today.
The Penang chief minister said that Putrajaya’s debt to Gross Domestic Product (GDP) ratio has increased yearly from 53.1 per cent in 2010 to 53.8 per cent last year and is expected to hit 54.8 per cent this year.
“This is extremely dangerous, and even more disastrous when coupled with statistics from Bank Negara’s Annual Report 2010, which revealed that Malaysia’s household debt at the end of 2010 was RM581 billion, or 76 per cent of GDP, thus giving us the dubious honour of having the second-highest level of household debt in Asia, after South Korea.
“In absolute terms, federal government debt rose by 71 per cent in four years to RM456 billion at (the) end (of) 2011 from RM266 billion at end (of) 2007,” said Lim in a statement today.
The DAP secretary-general said by following the same expansion rate, national debt would be a projected RM780 million by 2016 and RM1.3 trillion by 2020. Read the rest of this entry »
Time to Pull ‘CSI: Malaysia’ Off the Air
Posted by Kit in Anwar Ibrahim, Economics, Najib Razak, NEP on Wednesday, 11 January 2012
By William Pesek
Jan 11, 2012
Bloomberg: The Ticker
If there’s any economy in Asia that needs a change in narrative, it’s Malaysia.
When the resource-rich nation of 28 million people has made headlines globally in recent years, they have been about sodomy charges against opposition leader Anwar Ibrahim, tension between Muslims and Christians, Beyonce’s bellybutton offending local sensibilities or murder investigations involving high-ranking officials. Malaysia really could have its own CSI crime drama.
Far from finding all this entertaining, many foreign investors eye Malaysia with skepticism. That’s a shame given the huge potential of an economy growing 5.8 percent. When you consider Asian economies that deserved far more attention in 2011 than they received, Malaysia is Exhibit A. It’s high time for Prime Minister Najib Razak to change the story, to shift the focus toward reforms, not tabloid scandals. Announcing the end of affirmative-action policies that hurt Malaysia’s competitiveness might be just the thing. Read the rest of this entry »
National debt to equal GDP by 2019 if Putrajaya remains spendthrift, say economists
By Yow Hong Chieh
The Malaysian Insider
Jan 10, 2012
KUALA LUMPUR, Jan 10 — Malaysia’s national debt will hit 100 per cent of the Gross Domestic Product (GDP) by 2019 should Putrajaya continue to borrow more than it earns, economists say.
Malaysian Institute of Economic Research (MIER) distinguished fellow Mohd Ariff Abdul Kareem warned that the federal government revenue was growing too slowly to keep up with its borrowings, which hit 53.1 per cent of GDP in 2010.
He said while the current size of government debt relative to GDP was not troubling, the pace of its growth in recent years was cause for concern.
Debt-to-GDP ratio jumped from 41.4 per cent in 2008 to 53.1 per cent in 2010 while government debt grew 14.6 per cent in 2008 and 18.3 per cent in 2009, far outpacing the country’s GDP growth, Ariff noted.
“If nothing is done to reverse the current trends in government expenditures and revenues, extrapolation suggests that Malaysia’s national debt will explode to 100 per cent of GDP by 2019.
“Should the debt growth gather speed, this can happen sooner,” he told The Malaysian Insider via e-mail. Read the rest of this entry »
The Shah Alam Declaration
Posted by Kit in DAP, Economics, nation building on Monday, 9 January 2012
WE, the national delegates of the Democratic Action Party, assembled here at the National Conference in Shah Alam, Selangor, on 8th January 2012, hereby reaffirm the principles of the DAP and so duly commit to lead the way in effecting much-needed change in the form of democratisation and economic well being in order to achieve the Malaysian Dream of a more prosperous, democratic and dignified Malaysia.
We convey our highest salutations and heartiest congratulations to the Duli Yang Maha Mulia Seri Paduka Baginda Yang di-Pertuan Agong Tuanku Abdul Halim Mu’adzam Shah on his proclamation as the 14th Yang di-Pertuan Agong of the Malaysian Federation. May his sovereign reign encourage and foster the spirit of democracy and human rights amongst his loyal subjects. Daulat Tuanku!
On the cusp of change
All around the world, change is happening with a ferocity unseen since the end of the Cold War. People in every corner of the globe, from Tahrir Square to Wall Street, are rising in unprecedented numbers. Formerly passive societies have suddenly discovered newfound courage to stand up and reclaim their dignity.
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Malaysia rises in illegal money chart, RM150b lost in 2009
By Shannon Teoh
The Malaysian Insider
Dec 15, 2011
KUALA LUMPUR, Dec 15 — Malaysia lost RM150 billion in illicit outflows in 2009, the fourth highest in the developing world, says US-based watchdog Global Financial Integrity (GFI).
According to its report on illicit financial flows from developing countries released today, Malaysia lost a total of US$338 billion (RM1.08 trillion) over the first decade of the century.
“This report should be a wake-up call to world leaders that more must be done to address these harmful outflows,” GFI director Raymond Baker said in a press release.
GFI had reported in January that RM930 billion flowed out of Malaysia from 2000 to 2008, growing to RM218 billion per year from an initial RM71 billion in that period.
It said the increase was “at a scale seen in few Asian countries.” Read the rest of this entry »
Glum economic outlook nudges Najib closer to polls
Posted by Kit in Economics, Elections, Najib Razak on Wednesday, 14 December 2011
By Clara Chooi | December 14, 2011
The Malaysian Insider
KUALA LUMPUR, Dec 14 — Datuk Seri Najib Razak may have to rush into elections within three months, analysts have predicted, due to a bleak economic outlook and a world backdrop that is more hostile towards “strongmen and corrupt establishments”.
“The economic dynamics will be most crucial in determining the election (timing), and the window is narrowing,” one analyst, Singapore Management University associate professor Bridget Welsh, told Singapore’s Straits Times newspaper in a report published today.
The article noted that Malaysia’s economy is expected to expand by just three per cent next year, according to Nomura International, well below this year’s targeted 4.7 per cent growth rate and the government’s five per cent forecast.
Others have also noted that Malaysia’s rising federal debt load and over-reliance on commodity exports could see the country’s economy hit the hardest among its Southeast Asian neighbours.
Read the rest of this entry »
Malaysia among most vulnerable to euro crisis, says Nomura
Posted by Kit in Economics, Finance, international economic crisis on Wednesday, 7 December 2011
By Lee Wei Lian
The Malaysian Insider
Dec 07, 2011
KUALA LUMPUR, Dec 7 — Malaysia will be hit harder than its Asian peers by the economic crisis in Europe due to its relatively weak public finances and dependence on commodities, said Nomura International today.
Its chief economist for Asia ex-Japan, Robert Subbaraman, said that unlike most countries in Asia, Malaysia will be negatively affected by an expected drop off in commodity prices while the government will also find it difficult to keep up stimulus policies.
“Malaysia is one of the economies that will weaken the most; it is in the weaker group of economies,” said Subbaraman at a media briefing here today.
Nomura economist for Southeast Asia Euben Paracuelles said Malaysia’s growth in the first three quarters of this year was largely led by government spending, but as public finances were relatively weak, he doubted that it would be sustainable.
Subbaraman also noted that Malaysia ranked third in Asia ex-Japan in terms of exposure to European bank claims, after Hong Kong and Singapore, which could mean a drying up of liquidity should European banks start to cut their exposure to the region. Read the rest of this entry »
Government facing an economic dilemma
By Ramon Navaratnam | 25 Nov 2011
The Malaysian Insider
NOV 25 — At least two economic ministers, Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah and Tan Sri Nor Mohamed Yakcop, the minister in charge of the Economic Planning Unit, yesterday sounded greater caution on our economic outlook next year.
The European economy is weakening and the finance minister stated that government is “closely monitoring the European situation”. This shows his serious concern as to how low the European economies can go and how much we would be adversely affected.
The economic planning minister at the same time stated that “the global economic recovery is likely to stay weak and bumpy with a higher probability that things could get worse.”
We cannot therefore take it for granted that Malaysia can achieve a 5-5.5 per cent growth in our economy this year and anything near 5 per cent next year. Inflation could exceed 3.5 per cent next year and we could move towards stagflation which means stagnant economic growth and rising prices.
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World Bank: KL a ‘mini Los Angeles’ of inefficient urban sprawl
Posted by Kit in Economics, Transport, university on Monday, 21 November 2011
By Lee Wei Lian
The Malaysian Insider
Nov 21, 2011
KUALA LUMPUR, Nov 21 – The World Bank said in a report today that Malaysian cities needed to adopt more compact urban forms to improve livability and attract talent.
The report noted that Kuala Lumpur had sprawled to accomodate unrestrained motorisation and had been referred to as a “mini Los Angeles,” referring to the fact that the US city has been widely derided for its unlovely and inefficient sprawl.
The World Bank’s Senior Country Economist for Malaysia, Frederico Gil Sander told The Malaysian Insider in an interview prior to the launch of the report that the country needed to review its land use policies and make it cheaper to develop along public transit arteries and make it more expensive to develop further away from public transport.
“Create incentives for people to develop along public transport arteries,” he said.
Sander also called for universities to be integrated more tightly into the urban fabric and attract more city dwellers to take classes or attend cultural events. Read the rest of this entry »
Asia must safeguard its growth by protecting its people
By Noeleen Heyzer | November 18, 2011
The Malaysian Insider
NOV 18 — While European and North American leaders struggle to regain fiscal credibility by cutting back social entitlements, those of the Association of Southeast Asian Nations (ASEAN) meet in Bali this week at a historic turning point, an economic coming of age for their region, which may require them to move in the opposite direction.
Asia remains by far the most dynamic region in the world and the locomotive of global growth. Its growth rate is one and a half times that of any other region. But this growth has been accompanied by growing inequalities, and remains fragile.
The region’s recovery has come under pressure in recent months from multiple crises — increases in food and energy prices, the continuing global financial crisis, and severe disruptions in Japan and six ASEAN countries caused by adverse climate conditions and natural disasters. Because of these multiple shocks 42 million additional people will fall into poverty by the end of 2011, according to estimates by the UN’s Economic and Social Commission for Asia and the Pacific (ESCAP).
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Malaysia’s economy likely to slow despite earlier boom
By Debra Chong | November 18, 2011
The Malaysian Insider
KUALA LUMPUR, Nov 18 — Malaysia should brace for a protracted economic slump despite the expected announcement today that its economy has grown by up to 4.8 per cent in the past three months, analysts have warned, as the mushrooming debt cloud from the US and Europe spreads eastwards.
As the country heads into the last six weeks of the year, Bloomberg News reported today that most Asian currencies have been falling in the past three months on concern the nations that led the recovery from the 2009 global recession will falter.
“It’s part of monetary easing if they let their currencies weaken,” the business news agency reported United Overseas Bank economist Ho Woei Chen as saying.
The ringgit has fallen more than five per cent in the past three months while the Thai baht has weakened 3.3 per cent but neither countries have cut their rates even as Indonesia and Australia lowered borrowing costs in this last quarter.
Read the rest of this entry »
Pakatan Rakyat MPs are the real heroes fighting for the interest of Malays and poor Malaysians
Posted by Kit in Economics, nation building on Thursday, 17 November 2011
By Tony Pua
Pakatan Rakyat members of parliament have over the past 2 weeks exposed the fact that many of the goods sold in Kedai Rakyat 1Malaysia (KR1M) were not only substandard, illegal and unhealthy, many of these products were also not cheaper than products sold in existing hypermarkets.
We were criticised by the Domestic Trade, Cooperatives and Consumerism Minister, Dato’ Ismail Sabri as being unfair by not comparing “apple to apple”, that is we should not be comparing 1Malaysia products with house-branded products from Tesco, Giant or Carrefour.
However, we have proven that the comparison was indeed not “apple to apple” for products such as the “oyster sauce” because the sauce from Tesco contained real oyster extracts, the 1Malaysia product had only flavouring and no oysters.
At the same time, the comparison of 1Malaysia milk powder with that of Nestlé’s Nespray 1+ demonstrated not only that the former is a far inferior product but also the fact that the latter was 24% cheaper. The 1Malaysia milk powder was short of at least 15 legally required vitamins and minerals, deficient in calcium and iron and provided a 802% overdose of Vitamin A, putting at real risk our very young children.
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The 2012 Budget for a class of seven-year-olds… and voters
Posted by Kit in Budget Debate, Economics, Education, Elections on Wednesday, 16 November 2011
By Shern Ren | November 16, 2011
The Malaysian Insider
NOV 16 — Tomorrow my younger brother is going to school to collect the RM100 that the government has promised him as a school-goer. It’s all well and good for him to get a bit more spending money, but what difference does it make in our national Budget? Here’s an imaginary conversation that will take place tomorrow in a school far too close to home…
Hi, and welcome to Class 1 Malaysia in SJK Pelancar(1). As you’re all aware, our class president (who’s also the class treasurer) has magnanimously decided to give RM100 to all schoolchildren — that’s you and me! But before you all line up to receive his magnificent gift, he’s asked me to make a little speech about how far we’ve come as a class.
There are fifty of us in this class, 1 Malaysia. Who’s bringing in the dough? Well, 21 of us are employed, but only six of us will have any qualification higher than the SPM. Only three working people earn enough to pay any class fees at all to the class fund, which makes it all the more interesting that two of you guys are actually working for the class and earning your living from that same class fund. Don’t get too comfortable in your job though — there are eight fellows from other classes like 1 Donesia willing to do our jobs for half the price, or two of them for every five of us.
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Malaysians being ripped off (2) – with photos
Posted by Kit in Brain drain, Economics, nation building, Prices, Singapore on Monday, 14 November 2011
By Mimi Chih
Thank you for putting my article online.
The reason I enclosed those photos was to drive home the point how much more expensive those same items are in Malaysia. If you go back to Sarawak, they are even more expensive. e.g. even after conversion to RM, it is still more expensive in Malaysia e.g. Yoplait yogurt is SGD7.05 while in KL it is at least RM22, Farmhouse milk is 2 litres for SGD4.85…in KL it is RM10 per litre. Did you see how much the US imported cereals are selling for in Malaysia?
As for simple foods, look at how cheap it is, especially when you are earning SGD. You can still get kopi si peng is still SGD90 cents.
That is the reason why my niece sent out her resumes so many times since last year. She finally got a job in Oct, 2011 as an auditor (2 years experience). Her salary is gross SGD2600. When she earned RM2850 at Ernst & Young, she would never eat at Starbuck, didn’t even dare to look at Farmhouse milk or SPAM luncheon meat, and definitely, would never indulge in Yoplait yogurt. She is now able to enjoy all of those and more and she can send home SGD300. Her parents had to subsidize her when she was in KL even though she lived frugally.
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Writing on the wall and the perils of procrastination
Posted by Kit in Corruption, Economics, Najib Razak, UMNO on Sunday, 13 November 2011
— Nawawi Mohamad
The Malaysian Insider
Nov 13, 2011
NOV 13 — Silvio Berlusconi, the flamboyant, scandalous media billionaire who practically jumped into Italian politics by organising the People of Freedom party, reigned for seventeen years. He has now resigned. He left Italy with about €1.9 trillion in national debt.
After being so preoccupied with his scandals, both creating them and defending himself from the repercussions, he had procrastinated in dealing with Italy’s troubled economy and serious financial problems.
Berlusconi only agreed to the proposal to reduce the deficit in June, when in March his advisers had already literally shouted at him to start taking action.
His government managed to get everything in order only by September this year and got the vote of final approval in the Italian Senate by a margin of 156 to 12 just before his resignation; too little too late.
The final straw is not his scandalous life but the neglected state of the economy and finance in Italy.
With our own version of scandals, mismanagement, complacency, wastage, extravagance and callous spending by the Umno/BN government, Malaysia is not much different from Italy.
Unfortunately the Umno/BN government seems to be oblivious to the so many writings on the wall pertaining to our economy, financial status, deficits, national debts and the road that Malaysia is now on. Read the rest of this entry »
Malaysians getting ripped off
Posted by Kit in Brain drain, Economics, nation building, Prices, Singapore on Sunday, 13 November 2011
by Mimi Chih
When Tunku Abdul Rahman decided to expel Singapore from the Federation of Malaya leading to the Independence of Singapore on August 9, 1965, the world did not expect this tiny island Republic with a population of 1.8 million then to stand tall as one of the original Four Asian Tigers, along with Hong Kong, South Korea and Taiwan 46 years later. Well, this Lion City has certainly ventured forth roaring all the way with a lion heart.
How does one measure the success of a country? To the people, it is reflected in their overall standard of living. Not every country is lucky enough to have a team of intelligent people whose passionate objectives drive them to make their country a better place to live – for everyone. Singapore is one such country. Today this island republic has one of the highest standard of living in South East Asia.
Which Malaysian could imagine that some 46 years after the split, Singapore’s exchange rate to the ringgit would hit a dizzying rate of RM2.41 (Nov 11, 2011)? August 1972 was the last time that the SGD (Singapore Dollar) was almost on par with the (RM) ringgit at SGD100:RM100.10. For an average wage earner in the Lion City making SGD2500 a month, going for a 10 days holiday to the US or Australia or Europe once a year is a relatively small matter.
What happened to Malaysia? In 1965 when Singapore was expelled, Malaysia had everything that the island republic glaringly lacked – ample land, a plethora of natural resources, an operating government, and 9.3 million people. Read the rest of this entry »
Does this sound like Malaysia?
Posted by Kit in Corruption, Economics on Friday, 11 November 2011
The Malaysian Insider | November 10, 2011
NOV 10 — Greed, ignorance, hubris, corruption and a departure from long-held principles and a lazy media all played roles in the financial meltdown that is Greece, Ireland, Iceland. In his latest book “Boomerang”, Michael Lewis goes on a meltdown tour to find out how countries and societies got into this mess.
Malaysia is not Greece or Iceland but some of his observations should resonate with Malaysians. Below are just a sampling of some of his observations and the commentaries under each point made by The Malaysian Insider.
What “Boomerang” says:
1) “The world is now pocked with cities that feel as if they are perched on top of bombs. The bombs have yet to explode but the fuses have been lit…
Read the rest of this entry »
Why Malaysia is not a member of the Asia Tigers Club of Singapore, Hong Kong, S. Korea and Taipei
Posted by Kit in Dr. Chen Man Hin, Economics, Education, Najib Razak, NEP, university on Thursday, 10 November 2011
By Dr Chen Man Hin, DAP life advisor
Can PM transform Malaysia to become a high income nation in 2016. When he cannot improve the economy to join the Asia tigers club of Singapore, Hong Kong, S. Korea and Taipei?
When became PM in 2009, Najib announced his proposals to transform the economy with his Economic Transformation Program (ETP) by injection of tens of billion ringgits promised largely by government related companies. His predecessor Tun Mahathir also injected billions but the economy scarcely moved and the FDIs did not come in.
But money is not the primary mover of the economy. More importantly it is manpower.
Since 1970, the NEP has been a negative factor to drive the economy. With the NEP the GDP of Malaysia began to fall far behind those of Singapore, Hong Kong, S. Korea and Taiwan. Even now, the NEP has been a major factor in chasing away hundreds of thousands of our skilled manpower overseas, and this has affected the economy. While the four tigers leaped ahead to high income economies, while Malaysia stagnated.
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Malaysia remains rich but also intolerant, says new study
By Melissa Chi | November 07, 2011
The Malaysian Insider
KUALA LUMPUR, Nov 7 — Malaysia maintained its rank as the 43rd most prosperous nation, trailing behind Singapore at 16th but the latest index of overall wealth also ranked the country among the worst countries for personal freedom and democracy, while it also scored poorly for security and the educational levels of workers.
It was also found that Malaysians did not trust each other and generally did not welcome outsiders.
Overall, Malaysia was a more prosperous nation than its other Asean neighbours such as Thailand which came in at 45 out of 110 countries.
The London-based think-tank Legatum’s Prosperity Index assesses 110 countries based on performance in eight areas such as economy, personal freedom, health and social capital.
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