Sunday, November 23, 2008
Malaysian Economy is Doing Fine?
We read everywhere in international mainstream channels of the plaguing economic horror in the horizon. Some say it will be worse than the Great Depression in the 30's. People are being retrenched in the US and Europe especially by big corporations to reduce operating expenses. Companies are finding it difficult to pay salaries. Investors are exiting to get their hard cash out of the beat up market. Confidence is running low.
In China and India, real estate value has dropped more than half. People in the US are being chased out of their house because of loan default. Airline industry will face yet another challenge with losses in the billions of dollars and will be forced to consolidate even more. Banks are being closed down in heaps in the US. The US Government is forced to pump funds into the ailing banks, lest they will cause the whole economy to collapse. No banks would mean no loans, no homes to pay, no cars to use. Detroit is asking for US25B to stay afloat. Everyone's pulling their hair out.
Somehow, Malaysia's way above everyone else. We're not worried about all this. We're far too embroiled with whether yoga is permissible for Muslims, what language we should use on road signs and whether bloggers need a code of ethics. Meanwhile, crime rate and inflation are increasing, food is becoming less affordable, projects are being shelved, demand in exports is slowly dropping.
Malays are still phobic of losing their Constitutional rights but at the same time not stepping up to the challenge. We scorn at the prosperity of the Chinese and the social imbalance but don't force our kids to learn Math and Science in English, in fear of getting behind further. We don't understand the dangers of subsidy and ask for more. At the same time, we lambast GLCs who are not performing, yet demanding huge 'social obligations' especially to Malay companies. The Penang Government wants Petronas to fund the second Penang bridge but at the same time wants petrol price to be reduced (thus increasing subsidy money from Government's coffers, although it doesn't directly impact Petronas' revenue).
We need to know what inflation is forecasted to be for the next 2 years and how this would affect the middle and low-income groups. We need to know whether the over-issued hire purchase loans for cars would impact the economy, similar to the subprime crisis in the US. We need to know how Petronas would be affected if oil price drops to pre-war price of USD25/bbl, how much this would boost MAS' income and other oil-dependent businesses. We need to know if we have strict enough regulations to avoid issuing too much debt by banks. We need to know if credit card spending and debt will be our 'subprime loan crisis'. How much of our exports are affected? If this reduces, what is the remedy? Will people lose jobs? What is our backup plan? Are we exiting from losing investments in the US?
Reading our dailes, it would seem to an average Joe that all is hunky dory. Perhaps Malaysia's economy is isolated from the rest of the world. We should be fine then!!
*(Headline in Star read: "Inflation rate lower"). If you read the article, the inflation rate went from 8.2% to 7.6% in Oct. That's very soothing to know that inflation rate dropped by 6 points!