By pat on July 4, 2008 1:54 AM
Dear Tun,
I, on the other hand, think that investing in or developing agriculture has its merit. Our country is resourceful, unlike Singapore, Hong Kong, and others. However, there is still room for improvement in the way we produce our crops. By enhancing agricutural productivity and efficiency, we are better guarded against external supply shocks. At the same time, we also increase our competitiveness in international food supply markets which attractiveness has never been more apparent against a backdrop of looming food crisis. What is more important is, before a nation is asked to toil for a better future, the nation shall be assured of food security first.
Also, we shall not let our economy go heavily lopsided. We need a balanced economy so that everyone, regardless of education level and background, has the oppportunity to claim a stake in our economy. Agriculture provides ample opportunity for many disadvantaged groups to practise entrepreneurship, whereas these people may only be able to qualify themselves as a factory worker, if we only have manufacturing jobs. Besides, every field/industry has a place for high-tech, but having an assortment of career choices is just as important.
It is rather premature to dismiss the present government efforts to encourage economic growth as ineffective or inefficient as the effects may probably be seen after several years. However, insufficient is probably a description everyone would agree with. Having to embroil itself in the current political turmoil, I seriously doubt the present administration can still keep the economy in perspective. Election results and party/racial interests seem to dominate or take precedence over the more important national well-being.
In this unprecedented trying situation, we need a great leader more than ever. There would be little contention to say that Tun's leadership skills are more superior than those of your hand-picked successor, our PM. But again, who do you think, among UMNO leaders, has better leadership than Tun? It is not easy to find one. Therefore, we shall not discount Pak Lah on the basis of lack of show of leadership and shall let his actions speak for him. For instance, his campaign to promote greater transparency and efficiency had exhibited just another side of great leadership and had won the hearts of many. Unfortunately, allegations of his putting in place a family-run government has ripped the very trust we placed in him in the 2004GE.
The people of Malaysia are crying for a leader who is competent, visionary, fair, and having high integrity. At present, who, within UMNO or the bumiputra oppositions, has such qualities? The DPM hasn't cleared his name of homicide or connection to it, at least in the public eyes. The advisor to PKR hasn't cleared his name of sodomy, punishable by law. And, our PM has almost lost his grip on politics and people's confidence in his stewardship. The people's confidence in the government must be restored following a change of leadership. If a change of leadership is not expected to restore public confidence, why change? If we ourselves are not even confident of our own country, what can be expected of foreign investors?
Tun, we are only slightly more than 2 terms away from the year 2020. Our dream will be in jeopardy if we have a wrong leader for the 1st term; and doomed if we have another wrong leader for the 2nd term. I hope Tun can continue to help the people of Malaysia in your capacity. You will be dearly loved and remembered as the nation's HERO.
Best regards.
Friday, July 4, 2008
Thursday, July 3, 2008
Recession is coming...
Dear Tun Dr. Mahathir,
I suddenly see the twilight of a major economic change which may be a dawn of ending the Crude Crisis. Somebody has finally concluded that recession is coming and there will be no more reason for Crude price to go up further again! The following is a message forwarded to me by a friend of mine and I wish to share it with you:
"Recession is coming ... make your own judgment, don't panic !!
Do what is wise. The recession looks very eminent. It is really time to take proactive steps to avoid a painful time in the next two years, which is how long the recession is expected to last.
Suggestions:
1. Don't take any loans, buy homes, properties with loans, or even cash. Keep as much cash as possible.
2. Pay off as much of personal loans, private loans, as debt collection will be hastened.
3. Sell any stocks you can even at lower prices.
4. Take money off from Trust Funds.
5. Don't believe in huge sales forecast from customers, be extremely prudent, lowest inventories, reduce liabilities.
6. Don't invest in new capital.
7. If you are selling homes/ properties/ cars , do it now, when you can get good prices, they are going to fall.
8. Don't invest in new business proposals.
9. Cancel holiday plans using credit cards.
10. Don't change jobs, as companies will retrench based on 'last in first out'. Stay cool, wait, and if you took all of the above actions and more, you probably will be better off than many.
This is not a rumor. Bear Stearns is the first of many banking and financial institutions that will start falling in the not too future. If Bear Stearns can fall, so can JP Morgan, Citibank, HSBC, and the whole world.
US economy falls, the rest will crumble.
India and all those self-sufficient economies will be the most protected, but not gullible.
Europe may be a little stronger, but not China , another giant!
Malaysia will see significant impact.
However, recession is probably the only way to build up a downward momentum for the movement of fuel cost, and bankruptcy is the universal justice for punishing the fund managers who have imprudent heavy financial exposure to the forward buying contracts in Crude."
I suddenly see the twilight of a major economic change which may be a dawn of ending the Crude Crisis. Somebody has finally concluded that recession is coming and there will be no more reason for Crude price to go up further again! The following is a message forwarded to me by a friend of mine and I wish to share it with you:
"Recession is coming ... make your own judgment, don't panic !!
Do what is wise. The recession looks very eminent. It is really time to take proactive steps to avoid a painful time in the next two years, which is how long the recession is expected to last.
Suggestions:
1. Don't take any loans, buy homes, properties with loans, or even cash. Keep as much cash as possible.
2. Pay off as much of personal loans, private loans, as debt collection will be hastened.
3. Sell any stocks you can even at lower prices.
4. Take money off from Trust Funds.
5. Don't believe in huge sales forecast from customers, be extremely prudent, lowest inventories, reduce liabilities.
6. Don't invest in new capital.
7. If you are selling homes/ properties/ cars , do it now, when you can get good prices, they are going to fall.
8. Don't invest in new business proposals.
9. Cancel holiday plans using credit cards.
10. Don't change jobs, as companies will retrench based on 'last in first out'. Stay cool, wait, and if you took all of the above actions and more, you probably will be better off than many.
This is not a rumor. Bear Stearns is the first of many banking and financial institutions that will start falling in the not too future. If Bear Stearns can fall, so can JP Morgan, Citibank, HSBC, and the whole world.
US economy falls, the rest will crumble.
India and all those self-sufficient economies will be the most protected, but not gullible.
Europe may be a little stronger, but not China , another giant!
Malaysia will see significant impact.
However, recession is probably the only way to build up a downward momentum for the movement of fuel cost, and bankruptcy is the universal justice for punishing the fund managers who have imprudent heavy financial exposure to the forward buying contracts in Crude."
What is Dr Mahathir trying to hint us?
YABhg Tun Dr. Mahathir,
Do you feel regret for having the Official Secret Act (OSA) tabled and passed in Parliament during your tenure of the PM's office?
If there is no OSA, I believe Tun shall be set free now to disclose to the Malaysians somemore secrets about the foreign debt burden of the Malaysian government. So far, Tun only tells us about the projected income which the government is estimated to earn. However, we are still not able to judge on which decision to be chosen that can help to effectively overcome the current economic problems without knowing much about the information on the government's financial burden.
"18. In the meantime the world is undergoing a traumatic economic and financial turmoil. It began with the devaluation of the US Dollar. I do not know how much US Dollar bonds are held by Malaysia. I remember telling the Governor of Bank Negara to reduce our dollar holdings before I stepped down. I hope she has done so. Otherwise we would lose 80 Malaysian sen for every US Dollar we hold. When we hold 30 or 40 billion US Dollar the loss can be considerable."
By saying that "I do not know how much US Dollar bonds are held by Malaysia", Tun is indirectly suggesting that Bank Negara could have made a lot of paper loss in book value of the dollar holdings. However, this loss by right should have already been reflected in Bank Negara's monthly declaration on the holdings of International Reserves. Is Tun trying to hint us that Bank Negara's disclosure may be hiding something from the eyes of the Public?
"19. We may make some money from the other currencies which have appreciated against our Ringgit."
With clause 19, Tun's motive is quite sceptical. Is Tun trying to encourage attack on Ringgit by swapping Ringgit with other appreciating foreign currencies? Is Tun trying to act like George Soros in this round of attack?
Please, Tun! Please spare the Malaysians from another round of currency attack and do have mercy on us! Please talk more positively about our future and talk less negatively about our economic problems!
Onlooker
Do you feel regret for having the Official Secret Act (OSA) tabled and passed in Parliament during your tenure of the PM's office?
If there is no OSA, I believe Tun shall be set free now to disclose to the Malaysians somemore secrets about the foreign debt burden of the Malaysian government. So far, Tun only tells us about the projected income which the government is estimated to earn. However, we are still not able to judge on which decision to be chosen that can help to effectively overcome the current economic problems without knowing much about the information on the government's financial burden.
"18. In the meantime the world is undergoing a traumatic economic and financial turmoil. It began with the devaluation of the US Dollar. I do not know how much US Dollar bonds are held by Malaysia. I remember telling the Governor of Bank Negara to reduce our dollar holdings before I stepped down. I hope she has done so. Otherwise we would lose 80 Malaysian sen for every US Dollar we hold. When we hold 30 or 40 billion US Dollar the loss can be considerable."
By saying that "I do not know how much US Dollar bonds are held by Malaysia", Tun is indirectly suggesting that Bank Negara could have made a lot of paper loss in book value of the dollar holdings. However, this loss by right should have already been reflected in Bank Negara's monthly declaration on the holdings of International Reserves. Is Tun trying to hint us that Bank Negara's disclosure may be hiding something from the eyes of the Public?
"19. We may make some money from the other currencies which have appreciated against our Ringgit."
With clause 19, Tun's motive is quite sceptical. Is Tun trying to encourage attack on Ringgit by swapping Ringgit with other appreciating foreign currencies? Is Tun trying to act like George Soros in this round of attack?
Please, Tun! Please spare the Malaysians from another round of currency attack and do have mercy on us! Please talk more positively about our future and talk less negatively about our economic problems!
Onlooker
Some thoughts on political economic policy
YABhg Tun Dr. Mahathir,
"36. Malaysia must give up the idea of competing on the basis of low cost labour. Against China, Vietnam, Thailand, Indonesia we just cannot win. We must provide other elements attractive to investors."
Comment by Onlooker: To give up competing on the basis of cheap labour, the government must be willing to abandone the affirmative action policy and turn to meritocracy policy in hiring the talented people in the administration of the Government Offices and the amanagement of the Government Linked Corporations. Otherwise, the best talents can always find a better pay job in neighbouring countries and in the private sector. The end-result will be an inefficient government bureaucracy being operated by some half-past-six government chief officers.
"37. Confidence in the consistency of Government policies and political stability would be among the factors attractive to business. There can be a lot of other things that can be provided to offset the rise in wages. After all we must remember that many developed countries have very high wages. Even if we double the salaries and wages paid in Malaysia we would still be far lower than wages in developed countries."
Comment by Onlooker: Tun Dr. Mahathir has been viewed by many analysts as the most critical factor which attempts to destabilize or has destabilized the political stability of contemporary Malaysia. The sincerity of Tun in relation to the above sentences is a bit questionable. No wonder some bloggers like to name-call Tun as a "hypocrite."
"38. We had planned to go hi-tech in order to increase income. But there is not much moving in the implementation of this policy. Instead we want to be an agricultural country again. Planting food crops on the side tables of roads may increase food production but it will not help fight inflation on the scale needed for overcoming the turmoil in the world."
Comment by Onlooker: Tun Dr. Mahathir had about 22 years' chances to go hi-tech in Proton Automobile Engines. However, why were there many Proton Cars which still had to be powered by Mitsubishi Engines for running on the road? "Hi-Tech Nation" is indeed a whimsy easier to dream of than to put into practical implementation. To increase food production for purpose of better national food security is a political consideration rather than an economic consideration. Even though the policy of the late Tun Abdul Razak, the so-called "Rancangan Buku Hijau", was deemed as a temporary measure for curbing the imported inflation during mid 1970s, it did manage to help some poor farmers to obtain cultivable lands from the government in order to achieve a better self-sufficiency in food production for the whole nation and meanwhile helped to eradicate some poverty on a subsistence level.
Many economists are in the opinion that the US Economy will not collapse no matter what has to happen to the currency value of the US Dollars. The United States is basically a giant agricultural country and Americans have already achieved self-sufficiency in food production for a few hundred years. Even though the US economy has to go down to the drain like Tun predicts, Americans will still be able to survive by relying on the last resort, that is to adopt the Closed Door Policy and Protectionism in International Trade. However, Protectionism is usually not the best choice for a capitalist country like the US which champions the ideology of Laissez-Faire, therefore there are still rooms for the most brilliant economists to attempt to develop a viable Political Economic Theory that will eventually help to resolve the current economic issues such as fuel shortage, food shortage, land shortage and confidence crisis on international currency, based on the natural human response of instant spontaneity.
"36. Malaysia must give up the idea of competing on the basis of low cost labour. Against China, Vietnam, Thailand, Indonesia we just cannot win. We must provide other elements attractive to investors."
Comment by Onlooker: To give up competing on the basis of cheap labour, the government must be willing to abandone the affirmative action policy and turn to meritocracy policy in hiring the talented people in the administration of the Government Offices and the amanagement of the Government Linked Corporations. Otherwise, the best talents can always find a better pay job in neighbouring countries and in the private sector. The end-result will be an inefficient government bureaucracy being operated by some half-past-six government chief officers.
"37. Confidence in the consistency of Government policies and political stability would be among the factors attractive to business. There can be a lot of other things that can be provided to offset the rise in wages. After all we must remember that many developed countries have very high wages. Even if we double the salaries and wages paid in Malaysia we would still be far lower than wages in developed countries."
Comment by Onlooker: Tun Dr. Mahathir has been viewed by many analysts as the most critical factor which attempts to destabilize or has destabilized the political stability of contemporary Malaysia. The sincerity of Tun in relation to the above sentences is a bit questionable. No wonder some bloggers like to name-call Tun as a "hypocrite."
"38. We had planned to go hi-tech in order to increase income. But there is not much moving in the implementation of this policy. Instead we want to be an agricultural country again. Planting food crops on the side tables of roads may increase food production but it will not help fight inflation on the scale needed for overcoming the turmoil in the world."
Comment by Onlooker: Tun Dr. Mahathir had about 22 years' chances to go hi-tech in Proton Automobile Engines. However, why were there many Proton Cars which still had to be powered by Mitsubishi Engines for running on the road? "Hi-Tech Nation" is indeed a whimsy easier to dream of than to put into practical implementation. To increase food production for purpose of better national food security is a political consideration rather than an economic consideration. Even though the policy of the late Tun Abdul Razak, the so-called "Rancangan Buku Hijau", was deemed as a temporary measure for curbing the imported inflation during mid 1970s, it did manage to help some poor farmers to obtain cultivable lands from the government in order to achieve a better self-sufficiency in food production for the whole nation and meanwhile helped to eradicate some poverty on a subsistence level.
Many economists are in the opinion that the US Economy will not collapse no matter what has to happen to the currency value of the US Dollars. The United States is basically a giant agricultural country and Americans have already achieved self-sufficiency in food production for a few hundred years. Even though the US economy has to go down to the drain like Tun predicts, Americans will still be able to survive by relying on the last resort, that is to adopt the Closed Door Policy and Protectionism in International Trade. However, Protectionism is usually not the best choice for a capitalist country like the US which champions the ideology of Laissez-Faire, therefore there are still rooms for the most brilliant economists to attempt to develop a viable Political Economic Theory that will eventually help to resolve the current economic issues such as fuel shortage, food shortage, land shortage and confidence crisis on international currency, based on the natural human response of instant spontaneity.
Sunday, June 15, 2008
Government cuts down spending
Government to cut down cost
1. As one of the measures to reduce the effect of the increase the price of oil Government will reduce spending.
2. Since salaries and operation cost cannot be reduced, development cost would have to be curtailed.
3. When Government projects are stopped a whole lot of people will lose their income. This include the contractors, the sub-contractors, the suppliers, the transport companies and of course the workers. But even the nasi lemak sellers would lose their income and the workers would have no money to eat at the stalls.
4. Actually this was what happened when the Government decided not to go ahead with the so-called mega projects. With this idea about reducing Government spending the people who had suffered would suffer even more.
posted by Dr. Mahathir Mohamad at 11:20 PM on Jun 13, 2008
Onlooker said... Yang Amat Berbahagia Tun Dr. Mahathir,
It is not necessarily that the economy will be shrinking when the government tries to cut spending. With the spending cut, the government may be able to tax less or give tax holidays or tax exemption since it does not need to spend so much money now compared to the days before spending cut. A lower tax rate or tax-free incentive may attract more investors, both local or abroad, to invest in Malaysia and hence bring forth much more economic activities and create much more job opportunities. With the spending cut, Bank Negara may be able to build up a higher international reserve in order to back up a stronger Ringgit. A stronger Ringgit will help to curb the imported inflation so that we do not have to pay so much money to buy imported goods like rice from Thailand or chillies from India.
The Malaysian economy is shrinking now not only because of drastic changes in economic policy but there are also political reasons and the reasons of excessive speculation in commodity forward contracts which has drained out the liquidity of the financial market. The shrink is also caused largely by the political instability originated from the UMNO party election and MCA party election.
Tun, please try to give a fair and just viewpoint when commenting on changes in economic policy. We place a high value on your independent opinion.
June 14, 2008 3:16 AM
PEFIFAMI said... I disagree with comments from "onlooker" that reducing government spending is good and will help recover the economy.
Onlooker also seems to have the narrow perception that strong currency is good for the country.
Any good economist will tell you that too much savings is it by the government or the people are not all good. If everybody saves and no body spends how is the economy going to move? Different scenarios needs different measures.
In times of desperation and uncertainty the people will try to minimise spending except for the bare necessities. They will try to save as much as possible for the uncertainties.
Dr M is a true economist when he says in these times Government must spend to move the wheels of the economy, so that people get employed and have money in their pockets to spend. Their spending in turn will boost the businesses which in turn will employ people. It goes round and round. Otherwise the turning wheel of economy will come to a complete stop!
But the key word is wise spending by the goverment. During Dr M's time the government spend on Mega Projects which brings benefit for the mass, like infrastructure which provides employments and at the same time attracts healthy growth in businesses and attracts foreign investments.
However our government now, spends money with short term planning, designed to benefit mainly a small group which are cronies to the governments.
Projects are announced and implemented at the spur of moments without much planning. Corridors after corridors are announced like frying hot goreng pisang.
One typical example is the building of the 2nd Penang Bridge. Penang is an island. Anyone going to Penang can tell you it is a mad house there with traffic jams everywhere.
How does building another bridge to Penang help? It will only create more chaos by bringing more cars into the island. The money spend on the bridge could be put to better use like improving the road system, build mono rails and etc.
In fact the focus should be on the mainland where transportation and accessibility is cheaper and room for expansion is great.
As for the stronger currency, perhaps "onlooker" overlooked or ignorant that our exporters who create jobs for people will not benefit when their proceeds gets smaller and smaller.
At the end of the day, the secret lies in the leader. It is about clever management of the economy.
With Dr M at the helm you have a financial wizard, an economist and entrepreneur and much more all rolled in. He doesn’t allow "herd mentality"...
In the present government, we have leaders pulled by the nose from every direction.
The main idea is to win the popularity contest to remain in power..doesn’t matter if just for short term. As long as enough to reap as much as possible and fill up their own pockets.
June 14, 2008 7:25 PM
Onlooker said... To Pefifami,
It seems that many Malaysians are still complacent and never want to learn from the lesson of 1997-1998 Currency Crisis. If we do not cut the government spending, how are we going to build up our International Reserve? If we do not have strong backup in the International Reserve, how are we going to push up our currency value against other common international currencies? If our Ringgit is weak against the US Dollar, we are bound to pay a higher price for importation of rice from Thailand, chillies from India and Boer goats from Australia. In what sense will a weaker Ringgit benefit the ordinary Malaysians?
Talking about losing international competitiveness in the industrialised products and the cash crops when Ringgit appreciates, I think the best solution is to cut down hiring the foreign workers and resort to robotics and automation in order to improve the technology usage level at our factories and plantation estates. Only the technology at helm will help us to improve our workers' productivity, not the increase in the number of foreign workers in our payroll. The hiring of foreign workers in massive scale is a traditional source of big outflow of foreign exchange for Malaysia and therefore this problem should be tackled in time tacitly before the situation deteriorates further. We definitely do not like to see a deficit in our international balance of payment that could possibly happen in the future.
A strengthening Ringgit has the advantage of attracting the conservative long-term fund managers to come invest in Malaysia since a strong Ringgit helps the value-keeping of assets on hand. The value-keeping feature of a currency is of particular importance at the moment in the midst of high inflationary pressure at the international level due to excessive speculative activities in commodity forward contracts.
Although I discourage the government spending, I did not specifically oppose to the private spending. I think the private sector could and should be encouraged to play a much more active role in the Malaysian economy than the public sector at this critical juncture. A lot of plantation counters in Bursa Malaysia fare well now and report lucrative profit. I sincerely believe that our business environment can be further improved by simply cutting down the bad habit of bureaucracy in the government offices. A pro-business environment will indeed help to spur the economy when the investors are much more willing to pump in their money for investment spending. The investment spending from the private sector will undoubtedly benefit the Malaysians as a whole when we start to see the working of acceleration effect of the money being pumped into our economy by the private investors.
Pefifami, I can confidently tell that you don't represent Dr Mahathir since I know that Dr Mahathir will not take the risk to shut himself up from all roads towards a perceived nation of high personal savings and good thrifty habit. When people save, they will usually save their money in the bank. A proper operation of a good banking system will usually allow the savings money to flow back into our economy, unless a leakage is caused by irresponsible squandering of money and siphoning out the money to foreign country. So long as we have trustworthy managers working in Bank Negara, we should have confidence that a good banking system shall function well within the vicinity of the Malaysian economy.
If you don't know how to invest, you can help the economy by putting in your money in a bank savings account. Your money saved in the bank will indirectly help to spur the economic growth. This is because there are always some risk-takers who will borrow the money from the bank in order to finance their investment in some viable projects in the economy.
The economics is really a superb arts: If you hold an optimistic view about the economy, it is quite likely that the economy will turn better and better. If you hold a pessimistic view about your future, it is almost 100% sure that you are going to enter a dead-end in your personal finances. Therefore, please do cheer up guy! Don't let your self-fulfilling prophecy impede the most important first step of the forward moving in your own life!
June 14, 2008 11:52 PM
1. As one of the measures to reduce the effect of the increase the price of oil Government will reduce spending.
2. Since salaries and operation cost cannot be reduced, development cost would have to be curtailed.
3. When Government projects are stopped a whole lot of people will lose their income. This include the contractors, the sub-contractors, the suppliers, the transport companies and of course the workers. But even the nasi lemak sellers would lose their income and the workers would have no money to eat at the stalls.
4. Actually this was what happened when the Government decided not to go ahead with the so-called mega projects. With this idea about reducing Government spending the people who had suffered would suffer even more.
posted by Dr. Mahathir Mohamad at 11:20 PM on Jun 13, 2008
Onlooker said... Yang Amat Berbahagia Tun Dr. Mahathir,
It is not necessarily that the economy will be shrinking when the government tries to cut spending. With the spending cut, the government may be able to tax less or give tax holidays or tax exemption since it does not need to spend so much money now compared to the days before spending cut. A lower tax rate or tax-free incentive may attract more investors, both local or abroad, to invest in Malaysia and hence bring forth much more economic activities and create much more job opportunities. With the spending cut, Bank Negara may be able to build up a higher international reserve in order to back up a stronger Ringgit. A stronger Ringgit will help to curb the imported inflation so that we do not have to pay so much money to buy imported goods like rice from Thailand or chillies from India.
The Malaysian economy is shrinking now not only because of drastic changes in economic policy but there are also political reasons and the reasons of excessive speculation in commodity forward contracts which has drained out the liquidity of the financial market. The shrink is also caused largely by the political instability originated from the UMNO party election and MCA party election.
Tun, please try to give a fair and just viewpoint when commenting on changes in economic policy. We place a high value on your independent opinion.
June 14, 2008 3:16 AM
PEFIFAMI said... I disagree with comments from "onlooker" that reducing government spending is good and will help recover the economy.
Onlooker also seems to have the narrow perception that strong currency is good for the country.
Any good economist will tell you that too much savings is it by the government or the people are not all good. If everybody saves and no body spends how is the economy going to move? Different scenarios needs different measures.
In times of desperation and uncertainty the people will try to minimise spending except for the bare necessities. They will try to save as much as possible for the uncertainties.
Dr M is a true economist when he says in these times Government must spend to move the wheels of the economy, so that people get employed and have money in their pockets to spend. Their spending in turn will boost the businesses which in turn will employ people. It goes round and round. Otherwise the turning wheel of economy will come to a complete stop!
But the key word is wise spending by the goverment. During Dr M's time the government spend on Mega Projects which brings benefit for the mass, like infrastructure which provides employments and at the same time attracts healthy growth in businesses and attracts foreign investments.
However our government now, spends money with short term planning, designed to benefit mainly a small group which are cronies to the governments.
Projects are announced and implemented at the spur of moments without much planning. Corridors after corridors are announced like frying hot goreng pisang.
One typical example is the building of the 2nd Penang Bridge. Penang is an island. Anyone going to Penang can tell you it is a mad house there with traffic jams everywhere.
How does building another bridge to Penang help? It will only create more chaos by bringing more cars into the island. The money spend on the bridge could be put to better use like improving the road system, build mono rails and etc.
In fact the focus should be on the mainland where transportation and accessibility is cheaper and room for expansion is great.
As for the stronger currency, perhaps "onlooker" overlooked or ignorant that our exporters who create jobs for people will not benefit when their proceeds gets smaller and smaller.
At the end of the day, the secret lies in the leader. It is about clever management of the economy.
With Dr M at the helm you have a financial wizard, an economist and entrepreneur and much more all rolled in. He doesn’t allow "herd mentality"...
In the present government, we have leaders pulled by the nose from every direction.
The main idea is to win the popularity contest to remain in power..doesn’t matter if just for short term. As long as enough to reap as much as possible and fill up their own pockets.
June 14, 2008 7:25 PM
Onlooker said... To Pefifami,
It seems that many Malaysians are still complacent and never want to learn from the lesson of 1997-1998 Currency Crisis. If we do not cut the government spending, how are we going to build up our International Reserve? If we do not have strong backup in the International Reserve, how are we going to push up our currency value against other common international currencies? If our Ringgit is weak against the US Dollar, we are bound to pay a higher price for importation of rice from Thailand, chillies from India and Boer goats from Australia. In what sense will a weaker Ringgit benefit the ordinary Malaysians?
Talking about losing international competitiveness in the industrialised products and the cash crops when Ringgit appreciates, I think the best solution is to cut down hiring the foreign workers and resort to robotics and automation in order to improve the technology usage level at our factories and plantation estates. Only the technology at helm will help us to improve our workers' productivity, not the increase in the number of foreign workers in our payroll. The hiring of foreign workers in massive scale is a traditional source of big outflow of foreign exchange for Malaysia and therefore this problem should be tackled in time tacitly before the situation deteriorates further. We definitely do not like to see a deficit in our international balance of payment that could possibly happen in the future.
A strengthening Ringgit has the advantage of attracting the conservative long-term fund managers to come invest in Malaysia since a strong Ringgit helps the value-keeping of assets on hand. The value-keeping feature of a currency is of particular importance at the moment in the midst of high inflationary pressure at the international level due to excessive speculative activities in commodity forward contracts.
Although I discourage the government spending, I did not specifically oppose to the private spending. I think the private sector could and should be encouraged to play a much more active role in the Malaysian economy than the public sector at this critical juncture. A lot of plantation counters in Bursa Malaysia fare well now and report lucrative profit. I sincerely believe that our business environment can be further improved by simply cutting down the bad habit of bureaucracy in the government offices. A pro-business environment will indeed help to spur the economy when the investors are much more willing to pump in their money for investment spending. The investment spending from the private sector will undoubtedly benefit the Malaysians as a whole when we start to see the working of acceleration effect of the money being pumped into our economy by the private investors.
Pefifami, I can confidently tell that you don't represent Dr Mahathir since I know that Dr Mahathir will not take the risk to shut himself up from all roads towards a perceived nation of high personal savings and good thrifty habit. When people save, they will usually save their money in the bank. A proper operation of a good banking system will usually allow the savings money to flow back into our economy, unless a leakage is caused by irresponsible squandering of money and siphoning out the money to foreign country. So long as we have trustworthy managers working in Bank Negara, we should have confidence that a good banking system shall function well within the vicinity of the Malaysian economy.
If you don't know how to invest, you can help the economy by putting in your money in a bank savings account. Your money saved in the bank will indirectly help to spur the economic growth. This is because there are always some risk-takers who will borrow the money from the bank in order to finance their investment in some viable projects in the economy.
The economics is really a superb arts: If you hold an optimistic view about the economy, it is quite likely that the economy will turn better and better. If you hold a pessimistic view about your future, it is almost 100% sure that you are going to enter a dead-end in your personal finances. Therefore, please do cheer up guy! Don't let your self-fulfilling prophecy impede the most important first step of the forward moving in your own life!
June 14, 2008 11:52 PM
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