Thursday, February 26, 2009

The Economy:Great Minds Think Alike, Only Fools Differ

Hantu laut

Where are all the economic experts, the second Finance Minister, the governor of Bank Negara and all those in government that try to muddle Malaysians into
believing that there will be no recession in the country. Even the trained economists got sucked into this body of lies.

Such presumptuous and vacuous advisory to the people should not be taken lightly. It has serious repercussions on the economic welfare of the people and could stall the engines of recovery.If all Malaysians believed there are no economic problems and no recession sould there be any reason for them to put in extra effort to tend to the cut and bruises of the economy. All those who had intentionally misled the people should do the right thing......... they should resign from their jobs. Saying it once is fine, people accept you probably have made a mistake, but to keep repeating it over and over again is inconceivably stupid.


That was just a month ago when our government witch doctors and bomohs prescribed a good bill of health for the nation.Of late they have woken up to reality and faced with the magnitude of the problems, decided to swallow their pride and came up with a stimulus package.

When I first saw the amount of the package it was a shocking disbelief, the bunch of dead ducks in the Ministry of Finance is worse than what I have imagined. Not only are they bad in making economic forecasts they can't even evaluate the financial needs and optimal amount of the rescue package.As I have said in my earlier posts the stimuli would need another stimuli.....the RM7 billion is a drop in the ocean.The package is just too small to stimulate the ailing economy.The situation will worsen by the middle of this year.

The Malaysian stimulus package is different from that of the US government. Ours is a general rescue package of the economy while the US rescue package are mostly bail-out packages for ailing corporations and specific industries.The incoming Prime Minister should seriously consider revamping the Ministry of Finance.

In my forecast of the economic outlook for 2009 here I have predicted as early as October 2008 that Malaysia's growth rate would be in the region of 2% and below with high possibility of going into negative territory. The situation has changed, the outlook is bleaker, negative growth is no more a mere possibility, it's a reality. Unless the government increases the stimulus package and apply them in the proper sectors the stimulus might end up as stimulated waste.

Funding the wrong sector may cause more damage than good. The government should limit its exposure in propping up stock market and currency speculation to defend the ringgit.It has to face the fact that its foreign exchange reserve would dwindle in value if the ringgit depreciated against the USD.In the same posting I predicted export would decline by at least 20% during the 1st quarter of this year. The decline will affect all sectors particularly the major contributors like electronic, palm oil and crude oil.

There are two sides to a coin.The depreciation of the ringgit may not be as bad as some people imagined it to be.It is good for export. The depreciation can help compensate the diminution in value of export commodities. It's also a deterrent for huge capital outflow.Malaysians should be contented to keeping their money at home. The weak ringgit would make overseas travel more expensive and domestic tourism as cheaper alternative.

Whilst the government inject more money to boost the GDP and thereby increasing export, it must also not ignore to control import of certain commodities that are considered non-essentials.Imports of this nature should be reduced, suspended or imposed with higher tariff as deterrent. The tariffs and duties on luxuries (something pleasant to have but not necessary) like cigarettes, alcoholic beverages and other luxury items should be increased. The issue of APs for high end luxury cars should be suspended and the overall AP volume to be reduced.Increase road taxes for high end luxury cars. Incentive to be given in the form of tax rebate for manufactured products with high local components/contents. Promote and encourage 'Buy Malaysia First' to reduce incidents of unnecessary imports.

To overcome the unemployment problem the government must create incentives for Malaysians to take over jobs of migrant workers.Malaysians shy away from such jobs because of low wages and zero benefits.There must be re-education, minimum wage and better benefits to attract them to this sector.From my experience as businessman with offices and factories in many locations in the country, locals, especially bumiputras, throughout the country have the notion that blue collar work is menial and degrading and many would prefer to be drivers or office boys even if the dirty job offers 3 times more salary.I remember a case where I offered a bumiputra boy a job as a storekeeper in the company's logging camp with a starting salary of RM950.00 which he refused and wanted an office boy job which only pays RM300.00.His only other benefits of being an office boy is he sits in an air-conditioned office and gets a company's motorcycle.The job of storekeeper was eventually taken by a new school leaver, a Chinese boy. That's why re-education and revamping of wages and employment benefits are imperative to bring about the change of attitude.

Those are just few of what the government can do, there are many more.I have not touch on how the stimulus package should be spent.I'll keep that for another day.

Although, I hate it as much as any of you, all my predictions of the economy have manifested and the government was wrong......there is going to be a recession in the country. In fact it is already here.

12 comments:

Anonymous said...

Toll up

http://www.themalaysianinsider.com/index.php/malaysia/19223-highway-toll-up-from-march-1.

Terima kasih kerana menyokong Barisan Nasional.

SM said...

HL,

Yes, I agree all those in the Ministry of Finance should resign.....STARTING WITH THE 1ST FINANCE MINISTER (you forgot him?)!

donplaypuks® said...

When a ceratin mamak fin min revealed just b4 the March 2008 elections that our economy grew by 40% in th epreceding 4 years, we knew we not only have incompetents at the min fin, but also plain bloody liars and spindoctors!!

We now know that one of the primary cayse of the global economic meltdown was accouting gimmicks and massaging.

And when they claimed M'sia would not be affected by the Global Economic Crisis, we knew they must all have immigrated to M'sia recently from Pluto or somewhere outside our galaxy.

We not only need a total revamp at the fin min but a complete change of Govt, which when it completely ignores the findings of 2 Royal Commissions means we are also being held hostage by those at the highest echelons of Police, Attorney Genera's Office and the MACC!
http://donplaypuks.blogspot.com

fearless said...

HL,

A patient is terminally ill, the parents comforted the patient and tell the patient not to worry, every thing will be fine. Do you call that intentionally misled the patient and I think not, but giving hope and that was exactly what the Finance Minister and Bank Negara was doing. Even PR big brother and many countries is doing that, your term perhaps fit Anwar 916 evil means better, that was intentional. The Finance Minister and Bank Negara should instead be commended, is a fact that the prudent measure in place helps to cushion the impact of economy slowdown, our financial system is more resilient compare to many other countries. We not in recession yet, only coming whereas many other are already in deep recession.

Other wise your commentary is remarkable and of course you make the right call that recession is imminent,

Anonymous said...

donplaypuks

We now know that one of the primary cayse of the global economic meltdown was accouting gimmicks and massaging.

What a ridiculous explanation accounting gimmicks ? My foot ! and massaging what ? the accounts ? better go for foot reflexology , helps to reduce my stress reading these sort of comments .

Its GREED , Americans are greedy , the CEOs are greedy , Period ! Thats it .

Everybody is incompetent except the guy who thinks highly of himself and Mr Know All .
If you want to know who are the plain liars and spindoctors ask Mr Malaysia Today .

We knew they must all have immigrated to M'sia recently from Pluto or somewhere outside our galaxy.
Don't you know that all men came from Mars and all women came from Venus ? Aren't you aware that we are hybrids ? Huh I bet you won't know about that .
Yeah we need a revamp in all the Govt Agencies including a lot of numbskulls .

dontplaydumb

Anonymous said...

Hi fearless

No point talking to these Mr Know All , Mr Resign All ,

They should be re designated as Mr HSBC (Mr How Seow Bo Chun )

dontplaydumb

Anonymous said...

An MD of an established Leasing Company told me privately that most SMI clients of his are suffering a decrease of revenue of 60-70% for last couple of months.
Those who say our economy is insulated from the global slump, are not fit to sit at their high chairs. They should be in hospital having their eyes and ears treated for blindness and deftness.

fearless said...

Anonymous 10:56 PM,

It is wiser to judge people from their actions and not talks.

fearless said...

PAS Datuk Seri Hadi Awang calls for a unity government.....form Malaysian Insider.

He sense it, and I think the call is timely. PR should mellow down for the sake of the people.

kittykat46 said...

I agree we all need to focus on the economy.

Does a unity government mean we allow a "Stimulus Plan" which is mainly targeted at a limited circle of "friends" to go uncriticised ? If that's the intention I say, No Thank You.

fearless said...

Businessman pleads for political truce....from Malaysian INsider.
He said all and thats is what most Malaysian want. PR should let go and cooperate. Otherwise Najib will be forced to use other drastic option and the people will not blame him.

fearless said...

kittykat46,

I agree with you there will be leakages in the Stimulus Plan, it happen in every country, even in the private sector. It is impossible to get any job if you are straight and do not know anybody. Think out of the box, the result that matter. Don't be a hypocrite to play the corruption card, it will never end, let the rightful authority deal with that matter.