Hantu Laut
I must be the only mad person in the whole country when it comes to predicting the state of the economy and the coming of recession to Malaysia.Almost every one, from the Prime Minister,Deputy Prime Minister and now to the very person who is the central figure of the economic apparatus and one that advises the government on its financial and monetary policies have said there will be no recession in the country.
The Governor of Bank Negara Zeti Akthar Aziz said “Half the world will likely be in a recession. We are not in a recession and we don’t expect to be in one,’’ Read the story here.
A very reassuring statement indeed and completely opposed to what the rest of the world are grappling with, the fear of a deep recession, and one that can lead to an economic nightmare that the world have not seen since the depressions of the 1930s.
Where did we get the immunity that makes us so recession proof ?What are the fundamentals that make us so different from the rest of the world and one that can shield us from the contagion of this global epidemic.Almost every developed country have declared that they are already in recessions.
A few months before the US financial meltdown some optimistic economists predicted only slower growth and mild or no recession in the US.They are proven wrong. The problem is bigger than one would like to imagine.Now, fear of deep and prolonged recession is on every world leaders mind except Malaysian leaders who keep telling us not to worry as there won't be any recession in Malaysia, we are insulated and isolated from such nonsense.Only the rest of the world will suffer.Malaysians have natural antibodies against recessions.
The problem is, only the bad news has arrived, the deepest cut is yet to come.The Malaysian economy has not slowed down yet.There is always time lapse of at least six months between what happened in the West and us, before we feel the blow.This lapse of time should not be taken as an indication that all is well.
How can Malaysia be insulated when it is one of the top twenty trading nations in the world and a GDP highly dependant on selling to the world markets particularly Western nations. Won't it make sense that if there were recessions in the West there would be less money,less buying and,therefore,less exports from Malaysia to these markets.Than there would be the domino effect, sales gone down,profit down and liquidity tight.Those directly or indirectly involved in export business would start to lose money and face with cash flow problems and, therefore, unable to service their debts.Bad liquidity would bring about increase in the NPL(non-performing loan) with banks and other financial institutions.
If the recessions in the West stretch for more than six months the likelihood of Malaysia seeing bad times is extremely high, whatever rosy picture the government may wish to paint, catching the flu may be slow but sure.
I shall be damned if I am wrong.
Saturday, November 15, 2008
Friday, November 14, 2008
Return Of The Oligarch
Hantu Laut
It's really difficult to make out this statement of Mahathir.There seems to be inconsistency in his idea of democracy.Up till now he has been asking for the party to remove the hurdles to allow for more contests in the party and asking Najib to go against Abdullah and to remove him from the premiership.Now when his favourite is being challenged he is accusing other contenders of money politics and asking them to be arrested under the ISA.It looks like he has different strokes for different folks.
There is little doubt he is not happy with Ali Rustam and Muhammad Taib, the two spoilers of an almost perfect equation to politics of the oligarch.
Are we moving back to his old ways?
It's really difficult to make out this statement of Mahathir.There seems to be inconsistency in his idea of democracy.Up till now he has been asking for the party to remove the hurdles to allow for more contests in the party and asking Najib to go against Abdullah and to remove him from the premiership.Now when his favourite is being challenged he is accusing other contenders of money politics and asking them to be arrested under the ISA.It looks like he has different strokes for different folks.
There is little doubt he is not happy with Ali Rustam and Muhammad Taib, the two spoilers of an almost perfect equation to politics of the oligarch.
Are we moving back to his old ways?
Thursday, November 13, 2008
Down,Down, Down !
Hantu Laut
We have one of the highest wastage of public funds through corruptions and incompetence.It wouldn't be an over-statement to say that at least 30% of taxpayers money are lost to these two evils in government.
We are also blessed by exploitable natural resources that gave us a sound economy that allow us to survive the pilferage,incompetency and inefficiency in the system.The biggest source of government funding comes from taxes and oil revenue.With falling global price of crude oil a big chunk of this revenue would be wiped out requiring the government to look for alternative source of financing for its budget.
If the world markets for crude oil and palm oil do not improve in the near future and with the decline in exports of manufactured goods the government would have a serious budget deficit.The liquidity problem is much more serious than those in government have anticipated.A near negative growth in the following year is not a far-fetched scenario.
China, now the second largest economy after the US, which have had double-digit growth the past few years will face a downturn in its economy soon.With two of the world largest economy slowing down there would be huge decline in demand of commodities including demand for crude oil.How long the recession would last is difficult to guess.Bail-outs in the US have not picked up momentum or showed any improvement to the economy.
Finance Minister and Prime Minister in waiting Najib Tun Razak would have to crack his head to find a solution to the problem.
A recent proposal to sell government assets to raise funds sounds impractical and would be easier said than done.Unless the government is prepared to sell these assets at very low prices there would be few takers.Those with money to buy would look for real bargain.Chances are it would go to cronies even at more depressed price.It would lose future income if income-generating assets are sold.Only loss-making corporations and non-income generating assets should be considered for sale.
Selling government controlled blue chips would be killing the goose that lay the golden eggs.The PM and Finance Minister should not agree to the sales of any of these golden assets in a depressed market.
Worst case scenario, the government may have to trim its development expenditure to reduce the budget deficit.
In October I predicted that the price of crude would fall to around US$50 per barrel before the end of the year in my post "Where Crude Oil Heading For" .The price had tumbled to US$55 in spite of OPEC cut in productions.This means that demand had gone down faster and bigger in volume than OPEC cut in production.
Prolonged period of depressed crude market would spell trouble for Petronas and the Malaysian government spending.
On a lighter note, I find Malaysian generally more interested in politics than the state of the economy.
The good news is prices of consumer goods would go down as well and consumers should be smart to avoid those businesses that are profiteering by not adjusting prices.
We have one of the highest wastage of public funds through corruptions and incompetence.It wouldn't be an over-statement to say that at least 30% of taxpayers money are lost to these two evils in government.
We are also blessed by exploitable natural resources that gave us a sound economy that allow us to survive the pilferage,incompetency and inefficiency in the system.The biggest source of government funding comes from taxes and oil revenue.With falling global price of crude oil a big chunk of this revenue would be wiped out requiring the government to look for alternative source of financing for its budget.
If the world markets for crude oil and palm oil do not improve in the near future and with the decline in exports of manufactured goods the government would have a serious budget deficit.The liquidity problem is much more serious than those in government have anticipated.A near negative growth in the following year is not a far-fetched scenario.
China, now the second largest economy after the US, which have had double-digit growth the past few years will face a downturn in its economy soon.With two of the world largest economy slowing down there would be huge decline in demand of commodities including demand for crude oil.How long the recession would last is difficult to guess.Bail-outs in the US have not picked up momentum or showed any improvement to the economy.
Finance Minister and Prime Minister in waiting Najib Tun Razak would have to crack his head to find a solution to the problem.
A recent proposal to sell government assets to raise funds sounds impractical and would be easier said than done.Unless the government is prepared to sell these assets at very low prices there would be few takers.Those with money to buy would look for real bargain.Chances are it would go to cronies even at more depressed price.It would lose future income if income-generating assets are sold.Only loss-making corporations and non-income generating assets should be considered for sale.
Selling government controlled blue chips would be killing the goose that lay the golden eggs.The PM and Finance Minister should not agree to the sales of any of these golden assets in a depressed market.
Worst case scenario, the government may have to trim its development expenditure to reduce the budget deficit.
In October I predicted that the price of crude would fall to around US$50 per barrel before the end of the year in my post "Where Crude Oil Heading For" .The price had tumbled to US$55 in spite of OPEC cut in productions.This means that demand had gone down faster and bigger in volume than OPEC cut in production.
Prolonged period of depressed crude market would spell trouble for Petronas and the Malaysian government spending.
On a lighter note, I find Malaysian generally more interested in politics than the state of the economy.
The good news is prices of consumer goods would go down as well and consumers should be smart to avoid those businesses that are profiteering by not adjusting prices.
Tuesday, November 11, 2008
The Return To Mahathirism
Hantu Laut
Members of UMNO are beginning to show some political maturity and greater sense of democracy.Gone were the days of Mahathir's autocratic style of leadership where challenge to the top leadership were frown upon and made difficult by changing the party constitution to increase the height of the hurdles making it a daunting task for a challenger to take on the incumbent.
The no challenge concept for the two top positions had given UMNO a stagnated political mindset.Political ideology more suited for the 18th century rather than in today's modern democracy.The party is in dire need of new ideas and new democratic ideals.
Although, I must admit it has worked well during Mahathir's tenure , times are changing, a liberal policy and more freedom should be allowed in the rank and file to choose leaders of their choice.The hurdles should be removed to allow for new crop of political thinkers and leaders to reach the top tiers of the party.
There are new kind of political awareness in the country.People are more conscious of their rights.The old ways will not work anymore, in fact the old ways had worked against the party.The outcome of the 8 March General Elections was the telling sign that Malaysian are generally fed up with the way the country are being run.
With the party nomination of candidates closed, the stage is set for a fierce battle for positions of the Deputy President and Youth Chief, the two most to be closely watched races.Those predicted to reach the chequered flag first may not make it if money politics ruled the day.
In pole position for the deputy president is Muhyiddin Yassin.For the youth chief the leading contender is Mukhriz Mahathir.
Muhyiddin who initially thought it would be plain sailing for him now found himself challenged by two others, Ali Rustam of Melaka and Muhammad Taib of Selangor.Although he is the favourite to win, an upset shouldn't be ruled out by any of the other two contenders.He has been portrayed as the most qualified due to his educational background and better command of the English language.
Speaking good English may not be a criteria to winning party elections and is not the yardstick to judge a person's intelligence.Like any other languages it is just a medium of communication and happened to be widely spoken and understood internationally.
Muhyiddin is also seen as playing it safe and has not been vociferous in pursuing the Malay agenda as much as the others.The other most crucial element in this game is which of the three will throw the most money.To think that only those at the lower level used money to buy favours is blissful ignorance.
In 1987 when Mahathir was challenged by Tengku Razaleigh for the Presidency, Mahathir got three-fourth of the division nomination but only won by a measly majority of 43 votes.In his case the huge nomination he got was meaningless and misleading, he won by the skin of his teeth.Will Muhyiddin face the same situation or worse still loses out to the so-called non-starters.
If money and return to Mahathirism are not the deciding factors than Muhyiddin would win handsomely but if money is the object and the delegates wanted a balance between Mahathirism and Pak Lah's openess policy than Muhyiddin may have a challenge on his hand.
With Najib as President and Muhyiddin as Deputy President, if he won the election, the return to Mahathirism is imminent as both candidates were endorsed by him.Greater emphasis would be given to the Malay agenda,ossifying the social contracts and die-casting the ketuanan Melayu.Najib would not make the same fatal mistakes as Pak Lah, ostracising Mahathir can be deadly as Pak Lah has just found out a little too late.
One only need to see the number of hits the former premier gets for his blog to know how popular he is out of office than when he was in office.From reading the comments on his blog one can safely assume that majority of his fans are in their youth.Since its inception some eight months ago his blog has received 9.4 million hits.In comparison the Deputy Prime Minister who started his blog recently didn't seem to attract that many comments and has no hit meter to show the traffic to his blog.
Mahathir still has widespread support in UMNO and had been the catalyst in the forthcoming departure of Pah Lah as Prime Minister and President of the party.Over the past three decades he has serially destroyed the politicial career of Musa Hitam,Tengku Razaleigh,Anwar Ibrahim and now Abdullah Badawi.
After his departure as PM, Abdullah is unlikely to be playing significant role in the party.
Anwar Ibrahim had made a political comeback due to a weakened UMNO but as good as it gets he would likely be staying in the opposition for a long while or worse in prison.His sodomy case is still hanging over his head like the sword of Damocles.
His son Mukriz whose political future looked bleak when he followed his father's foot step and started to decry Abdullah's incompetence after the March General Election has now taken a sudden upswing in support from the Youth wing of the party.He is leading in nomination for the post of Youth Chief and is expected to win against Khir Toyo and Khairy Jamaluddin, the bright rising star that's beginning to dim and falling out of favour with the rank and file because he soon won't be the Prime Minister's son-in-law.
Ironically, among the three, Khir Toyo seems to be the most popular if blogs were to play party to winning an election.His blog attracts hundreds of comments and have had reasonably good hits while the other two have very few comments and didn't install visible site meters. Khairy posted most comments good or adverse,Mukriz only posted selected comments in praise of him.
Some called him the most hated man in the country, aggressive,arrogant and too smart for his own good.Khairy Jamaluddin had been accused of pulling the rugs from under other UMNO warlord's feet and stole their lucrative contracts.How much truth to these allegations ? Khairy called it an 'urban legend' in his recent interview with the Star newspaper.He has also denied his ambition to be PM by 40.True or not he certainly has what it takes and UMNO should not ignore his ability to return as Khairy the son of Jamaluddin and not as Khairy the son-in-law of Abdullah Badawi.
The real fight may be between Mukriz and Khir Toyo but things can change as they approach nearer elections day.Mukriz may have the highest number of nominations but, unlike his father, he lacks the grit and forcefulness of a leader.When proposed to a debate with Khairy he refused to take up the challenge and said:
"Pemilihan UMNO adalah soal keluarga dimana kita tak seharusnya berbincang mengenainya untuk tontonan umum, lebih -lebih lagi untuk tatapan pembangkang. Perjuangan UMNO ialah sesuatu yang tersirat dan ianya tak perlu dibahas-bahaskan secara terbuka dan disensasikan.Kita menggunakan pemilihan ini untuk memperkukuhkan parti, dan perlu elak dari membuat sebarang perkara yang mampu melemahkan parti tatkala kita dalam keadaan yang agak tidak kuat berbanding dulu. Dengan pencalonan yang sedang dilaksanakan dan pengundian yang bakal dijalankan, terbukti perwakilan dah kenal calon-calon dengan rapat dan matang untuk buat pilihan".
Members of UMNO are beginning to show some political maturity and greater sense of democracy.Gone were the days of Mahathir's autocratic style of leadership where challenge to the top leadership were frown upon and made difficult by changing the party constitution to increase the height of the hurdles making it a daunting task for a challenger to take on the incumbent.
The no challenge concept for the two top positions had given UMNO a stagnated political mindset.Political ideology more suited for the 18th century rather than in today's modern democracy.The party is in dire need of new ideas and new democratic ideals.
Although, I must admit it has worked well during Mahathir's tenure , times are changing, a liberal policy and more freedom should be allowed in the rank and file to choose leaders of their choice.The hurdles should be removed to allow for new crop of political thinkers and leaders to reach the top tiers of the party.
There are new kind of political awareness in the country.People are more conscious of their rights.The old ways will not work anymore, in fact the old ways had worked against the party.The outcome of the 8 March General Elections was the telling sign that Malaysian are generally fed up with the way the country are being run.
With the party nomination of candidates closed, the stage is set for a fierce battle for positions of the Deputy President and Youth Chief, the two most to be closely watched races.Those predicted to reach the chequered flag first may not make it if money politics ruled the day.
In pole position for the deputy president is Muhyiddin Yassin.For the youth chief the leading contender is Mukhriz Mahathir.
Muhyiddin who initially thought it would be plain sailing for him now found himself challenged by two others, Ali Rustam of Melaka and Muhammad Taib of Selangor.Although he is the favourite to win, an upset shouldn't be ruled out by any of the other two contenders.He has been portrayed as the most qualified due to his educational background and better command of the English language.
Speaking good English may not be a criteria to winning party elections and is not the yardstick to judge a person's intelligence.Like any other languages it is just a medium of communication and happened to be widely spoken and understood internationally.
Muhyiddin is also seen as playing it safe and has not been vociferous in pursuing the Malay agenda as much as the others.The other most crucial element in this game is which of the three will throw the most money.To think that only those at the lower level used money to buy favours is blissful ignorance.
In 1987 when Mahathir was challenged by Tengku Razaleigh for the Presidency, Mahathir got three-fourth of the division nomination but only won by a measly majority of 43 votes.In his case the huge nomination he got was meaningless and misleading, he won by the skin of his teeth.Will Muhyiddin face the same situation or worse still loses out to the so-called non-starters.
If money and return to Mahathirism are not the deciding factors than Muhyiddin would win handsomely but if money is the object and the delegates wanted a balance between Mahathirism and Pak Lah's openess policy than Muhyiddin may have a challenge on his hand.
With Najib as President and Muhyiddin as Deputy President, if he won the election, the return to Mahathirism is imminent as both candidates were endorsed by him.Greater emphasis would be given to the Malay agenda,ossifying the social contracts and die-casting the ketuanan Melayu.Najib would not make the same fatal mistakes as Pak Lah, ostracising Mahathir can be deadly as Pak Lah has just found out a little too late.
One only need to see the number of hits the former premier gets for his blog to know how popular he is out of office than when he was in office.From reading the comments on his blog one can safely assume that majority of his fans are in their youth.Since its inception some eight months ago his blog has received 9.4 million hits.In comparison the Deputy Prime Minister who started his blog recently didn't seem to attract that many comments and has no hit meter to show the traffic to his blog.
Mahathir still has widespread support in UMNO and had been the catalyst in the forthcoming departure of Pah Lah as Prime Minister and President of the party.Over the past three decades he has serially destroyed the politicial career of Musa Hitam,Tengku Razaleigh,Anwar Ibrahim and now Abdullah Badawi.
After his departure as PM, Abdullah is unlikely to be playing significant role in the party.
Anwar Ibrahim had made a political comeback due to a weakened UMNO but as good as it gets he would likely be staying in the opposition for a long while or worse in prison.His sodomy case is still hanging over his head like the sword of Damocles.
His son Mukriz whose political future looked bleak when he followed his father's foot step and started to decry Abdullah's incompetence after the March General Election has now taken a sudden upswing in support from the Youth wing of the party.He is leading in nomination for the post of Youth Chief and is expected to win against Khir Toyo and Khairy Jamaluddin, the bright rising star that's beginning to dim and falling out of favour with the rank and file because he soon won't be the Prime Minister's son-in-law.
Ironically, among the three, Khir Toyo seems to be the most popular if blogs were to play party to winning an election.His blog attracts hundreds of comments and have had reasonably good hits while the other two have very few comments and didn't install visible site meters. Khairy posted most comments good or adverse,Mukriz only posted selected comments in praise of him.
Some called him the most hated man in the country, aggressive,arrogant and too smart for his own good.Khairy Jamaluddin had been accused of pulling the rugs from under other UMNO warlord's feet and stole their lucrative contracts.How much truth to these allegations ? Khairy called it an 'urban legend' in his recent interview with the Star newspaper.He has also denied his ambition to be PM by 40.True or not he certainly has what it takes and UMNO should not ignore his ability to return as Khairy the son of Jamaluddin and not as Khairy the son-in-law of Abdullah Badawi.
The real fight may be between Mukriz and Khir Toyo but things can change as they approach nearer elections day.Mukriz may have the highest number of nominations but, unlike his father, he lacks the grit and forcefulness of a leader.When proposed to a debate with Khairy he refused to take up the challenge and said:
"Pemilihan UMNO adalah soal keluarga dimana kita tak seharusnya berbincang mengenainya untuk tontonan umum, lebih -lebih lagi untuk tatapan pembangkang. Perjuangan UMNO ialah sesuatu yang tersirat dan ianya tak perlu dibahas-bahaskan secara terbuka dan disensasikan.Kita menggunakan pemilihan ini untuk memperkukuhkan parti, dan perlu elak dari membuat sebarang perkara yang mampu melemahkan parti tatkala kita dalam keadaan yang agak tidak kuat berbanding dulu. Dengan pencalonan yang sedang dilaksanakan dan pengundian yang bakal dijalankan, terbukti perwakilan dah kenal calon-calon dengan rapat dan matang untuk buat pilihan".
Ikhlas,
Mukhriz Mahathir
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