Saturday, December 26, 2009

Is Malaysia Lingering In Laggardness?

Hantu Laut

Civilisations come and go. Some decline gradually while others have shown rapid decline.

The decline of past civilisations and empires have mainly been attributed to greed,corruptions and enmity.History have been witness to the rise and fall of empires and civilisations.

The Roman Empire lasted for one millennium and collapsed in 1453 with the end of the Byzantine era.The Ming Dynasty stood for almost 300 years and was the high point of Chinese civilisation.This was the time when China had the biggest naval fleet in the world and where Admiral Zheng He roamed the high seas engaging in trades and collecting tributes from tributaries of the empire.The Ottoman Empire lasted 623 years and collapsed after World War I.Those are just few major civilisations that have risen and collapsed.

Of more recent times, of our times , the collapse of European hegemony after World War II, when invincibility of the British and other European powers were put to the test by Japanese occupation of their colonies.

The British presence and control of her far-flung colonies in the Indian sub-continent and South East Asia was made possible by her superior naval power.Control of sea lanes and the oceans gave Britain unfettered maritime passages to all her colonies.Those who control the oceans control the world.Today, the US is the only super power that has naval supremacy over the world's oceans and can wage wars in any part of the world.

European supremacy and the myth of its invincibility was demolished during World War II when an Asian military power invaded and occupied her impregnable fortress in the Far East. Singapore, fell to the Japanese with very little resistance from the British.The locals looked on in dismay as the British gave up arms and surrendered to the invading force.This was the beginning of the dismantling of the empire.

Britain,Germany,Japan and the US were the main players in World War II.They have against all odds risen from the ashes to become world economic powers.

In Asia, economic miracles that took place over the past five decades have made a number of countries to become economic powerhouses.Some have grown faster than others.Some are left behind due to bad politics and bad economic policies.

The Far East was the fastest growing economic region during the second-half of the twentieth century.Japan takes the lead as the most economically progressive and most industrialised .At the moment Japan is still the economic behemoth of Asia.With the prolonged recession in the country the picture could change very quickly. China's move to capitalism that transformed her into another economic giant is expected to surpass Japan's GDP in the next 2 to 3 years

The other economic tigers are South Korea,Taiwan,Singapore and Hong Kong. Malaysia,Indonesia,Thailand and the Philippines are considered to be in the junior league.

Less than forty years ago the GDP of Hong Kong, Singapore and Taiwan were less than Malaysia .Today, these countries have dwarfed Malaysia's GDP and per capita income.The three tigers and South Korea have progressed by leaps and bounds and Malaysia with far better natural resources and bigger land mass is lagging far behind. Below are some economic statistics of the countries concerned.

All figures 2008, Source:IMF and in US Currency.

Malaysia Pop:26 Per Capita:US$14,081 Rank:59 GDP:US$385.2 bil

Singapore Pop:4.6 Per Capita:51,226 Rank:4 GDP:237.9

Hong Kong Pop:7 Per Capita:43,847 Rank:7 GDP:307.3

Taiwan Pop:23 Per Capita:30,912 Rank:25 GDP:713.7

S.Korea Pop:49 Per Capita:27,692 Rank:33 GDP:1.338 tri

The GDP figures above showed there is something very wrong with Malaysia's productivity.The man-hour output is much lower compared to the other countries.It can only mean either Malaysians have very low productivity or work less hours than their counterparts in the other countries.Such phenomenon can only occur as a result of bad labour policies or bad work culture or both.Low man-hour output can also be the result of bad government policies.Malaysia, do not have minimum wage and import unskilled and low-wage foreign labour.

Taiwan with slightly less population and 1/9 the land mass of Malaysia has GDP almost double that of Malaysia.More interesting is Singapore, with 4.6 million people and land mass 1/473 that of Malaysia and GDP of $307.3 its productivity is 5.65 times more efficient than Malaysia. In the 1960s South Korea's GDP was less than Malaysia.Today, Korea has surpassed the 1 trillion mark.

With the recent global financial debacle and economic recession Malaysia's economic performance would slide further down.There would be less government revenues to finance the budget.Its 40 percent dependency on oil revenue to finance its budget is an anomaly.Major financing of the budget should have come from non-oil revenues.With the current low price of crude there would be less oil money.

Malaysia needs to borrow, increase taxes or sell government assets to finance the deficit.The widening deficit is a tell-tale sign of poor management of the economy.

To increase taxes would burden the people who were already suffering from low wages and high costs of living.It could also cause the standing government to fall.

We have all the resources to be of greater economic value yet we linger in laggardness?


warisan tmk said...

Your per capita comparison has NO MEANING whatsoever, unless you also compare the Prices Indices of the countries listed. When the Singaporeans per capita income is THREE TIMES that of Malaysians, does it mean the Singaporeans are THREE TIMES better off.

Let me take a small example. In Singapore, to own a car, one has to buy a parking space at a cost of RM50,000 per space, while in Malaysia, they can park 2-3 cars infront of their houses FOR FREE.
In Johor Bahru, you can have a good breakfast for less than RM7, while in Singapore, the same amount of food may cost up to RM20.

It is no secret that the Singaporeans are crossing over into Johore, Malacca and Port Dixon for mush cheaper hotels, entertainments, food and even petrol.

I do not envy my friends living in Singapore, where, despite the HIGH INCOME, everything is DEAD EXPENSIVE.

Anonymous said...

Simple, Go ask UMNO.

How about asking the Minister who was so happy to gave up a piece of prime land with GDV of RM15.0b for a convetion centre worth RM600m. and he thinks the Govt is laughing all the way to the bank.

Hantu Laut said...

warisan tmk,

Is that how you measure prosperity?

You must be the new Adam Smith.

eddy said...

Bro, just thinking aloud, you mentioned Hong Kong, South Korea, Singapore and Taiwan. What does these places have in common? I can see some things that these places share like having one dominant language, one dominant culture and very centralised/dominant leadership especially in Singapore.

Maybe the people in South Korea, Taiwan, Singapore and Hong Kong spent more energy and time in nation building and wealth accumulation without being stuck like us Malaysians still arguing after 50 years of Independence about our multi lingual/vernacular schools, arguing about politics still arguing about race and religion, too much politicking about anything with the opposition blaming everything under the sun to the ruling BN Government and the BN Government not angels either. Just my thoughts. I do not think a Pakatan Federal Government(god forbid) will do any better though, they cannot even agree when to register formally as a formal coalition and cannot even agree to who is the annoited PM if they come into power.

Looks like we will be a bit laggard later as well when compared to Indonesia who now finally have a strong leader SBY who I am sure will lead them to better things economically and politically.

SM said...


Good "catch" on what's happening in Msia.
As Anonymous 6:11Pm said...simple...go ask UMNO!And before you give the normal answer that DSAI & PR will be worse...well...we don't know if we don't try...the way we are Eddy so rightly that Indonesia has a strong leader...they will overtake us...(just watch Indonesia & the next few years...they are going to overtake us)!
I guess we will never learn from History!

Anonymous said...

Keep posting stuff like this i really like it