Tuesday, March 10, 2009

Get ready for the gloomy times ahead.

News Updates: DPM announces mini budget worth RM60bil over two years

It's time to be honest. An honest assessment of the Malaysian economy with no need for a positive spin from anyone. The Malaysian economy is tied up with the global economy and until the United States recovers, there is really nothing the world can do. That is a fact and certainly a lesson to those who talk about boycotting American products. I think the coming financial tsunami is a reminder that we should not go overboard with our "Malaysia Boleh" slogan.

Our exports are expected to fall, as much as 50%, with dropping orders for our rubber, palm oil and crude oil as global production falls. Our stock prices have declined and so has foreign direct investments. All these have serious impact on our economy. What the mini-budget can do is to arrest our economy from heading towards a recession. And after spending the money, said to be up to RM50bil for the next two years, it's essentially still a touch and go situation. That means we are not even sure Malaysia would not go into a recession. No one can be sure now, with businessman Warren Buffet saying the American economy has fallen off the cliff. It's on a free fall and everyone is being dragged down.

The Singaporean leaders have gone further, warning its people that the negative growth could be a double digit, possibly minus 10%, as its workers continued to be retrenched while those holding jobs have been told to be ready for pay cuts. From Japan to South Korea to China, everyone is gearing for the most difficult year of the century. In the US, the financial crisis has been described as the worst since the Second World War, with massive losses in jobs.

What Malaysians hope to see would be incentives in the form of grants or subsidies for our young to pursue post graduate studies so they do not exert pressure in the job market. In short, continue studying and learn new skills, do not look for jobs. Employers should be encouraged to absorb the retrenched with incentives. These measures would help to reduce the burdens of ordinary Malaysians.

Obviously, there is a need to find new instruments to help the people. Pensioners, for example, cannot hope to use their bank interest from their savings as it drops to 2% and the cost of living going up, as the ringgit weakens against the US dollar. Government bonds could be offered as an alternative. Possibly dividends from the EPF could be paid off in cash. We are not sure there whether there will be tax breaks for the middle class but this group has been affected the most, especially the salary workers. The rich can ride through the crisis but the middle class has often suffered the most.

More importantly, when the Deputy Prime Minister, table the mini budget today, he needs to impress upon Malaysians that it is time to reduce the politicking as this is a time to save jobs, put food on the table and keep the economy from going down under. This is a global problem, that is beyond the control of anyone, and the priority now is to ensure the money from the second package is not wasted, quickly disposed, stimulate the economy, jobs created, money is circulated and productivity increased. While the gloomy news would shocked many Malaysians, there is a need to remind ourselves many of us have gone through this 10 year cycle before. This is the time to re-invent and re-shape ourselves.

15 comments:

The Penquin said...

Yes we should be able to imagine the chain effects of falling overseas demand for our exports. Sure it will take time for the effects to actually affect the majority. But the Government must be ready and should try to minimise the chain effect. I totally agree that it is time for all parties to get down to serious work . Discussing, suggesting, planning and implementing effective measures. Rather than stabbing at one another ridiculously. At the moment I have even lost count of the numbers of 'I sue you, You sue me' cases.

Anonymous said...

Well said. I think its time our leaders put their mind to good use and see how the Local economy can be sustained.

Hope they put the care of the people first rather than their own.

Frankly speaking I'm getting worried as days go by. Future is really bleak at the moment.

Stephen Doss said...

I wonder if for once the Ministry of Finance will surprise everyone with a full and open accounting of the spending that it is to embark on...

Maybe it can keep the RAKYAT abreast by publishing its progress once a month in all local dailies...of how the stimulus is being implemented...and its impact...

Wishful thinking...hopefully not...

Anonymous said...

By what has been reported so far, I think it is a disappointing mini budget and the usual top down approach to dispersion of funds instead of the trickle down approach. I wonder why the corporate tax and income tax levels did not come down as this will have immediate effect on the economy??? Sorry to be cynical, but is this because the government cannot afford to give the tax cuts due to its deficit position?

artic turban said...

So all those "we will not be affected, our fundamentals are strong b.s." quoted from our government is just that PLAIN LIES. So how to believe a governtment that lies to its people, It was told by everyone inclusive of the opposition, economists, my neighbour's pet monkey, my pet donkey, everybody knew about the depression which was coming, WHY WAS BN DEAF?, Why the need for cheap thearatics- sendiwara, why? was it to massage the egos of party morons, Was it to paint the opposition as doomsayers whlile Umno will come to the rescue?, There is something very wrong with our ministers, if they can lie so efficently through their teeth without batting an eyelid, Is it halal to lie> Pleas any answers MR. OUR FUNDAMENTALS ARE STRONG" minister or Clown, what say you now?

Anonymous said...

Dear Datuk,

We Malaysians are all hungering for this new Malaysia. What are you doing to accelerate this change to a new and better Malaysia and how how do we have to wait?

Michael Gaw said...

Dear Wong,

I agree with you 110%.

It is time to be honest.

Since last year, our leaders have insisted that our growth would be 3.5% for year 2009.

Other world Leaders were then forecasting negative growth for their nations.

I was then thinking Datuk Najib must be the best finance minister in the world. A economic wizard or something like that.

I was wrong.

Now we are staring at 1% negative growth. Some even say that this may be too optimistic.

Singapore has realized the seriousness of the financial crisis more than a year ago and has taken drastic steps to tackle the problem, including using their reserves which require presidential approval.

Our leaders have only now woken up from their slumber!!!!

I call upon our leaders to be realistic and be serious about the serious economic crisis which the nation will soon be encountering.

Stop politicking and get down with the job of saving jobs and sustaining businesses.

Newspapers like Star is on the right track highlighting economic issues. That should be the way.

Stock markets are scrapping the bottom but nobody is buying.

Jobs are lost everyday.

These are the issues which decent newspaper should highlight on.

This DOES NOT MEAN dwelling on negative news but to wake up our leaders to the plight of the common man, the RAKYAT.

WE WANT SOLUTIONS AND NOT MERE TALK.!!!!

Odette said...

Good article. You are right that the Middle Class suffers the most. The rich can certainly sail through troubled times quite easily. Would have liked to see more in the Mini Budget to address helping the middle class though.

Anonymous said...

Dear Datuk Seri,

salam sejahtera.

assuming what was mentioned in Rocky Bru's blog is what we are heading towards, which is a U-shape downturn, then perhaps we need to address more than just the issue of arresting our economy from heading towards a recession, like you said Datuk Seri, but also to convince the common people that the country still on the right path in terms on achiving the objectives of 2020.

certainly, it is still a long way to go, more than 10 years to be exact. But confidence factor is one big concern. The fear among common men and women is that political unrest will drag the progressive economic growth.

The recession now is global, so confidence is the main thrust, not just only strategies and billions mentioned in the Mini Bajet.

simple quesion - if i am not confident where this country is heading, politically, would i still sleep well at night and continue to spend like usual? do i need to save for the rainy days?

my apology for not able to offer solid stats to support my argument, other than to say that i vaugely remember that the sales for safe deposit box in US was on the rise due to tendency to save during the economic slow down. i stand to be corrected on this point.

however, addressing the public concern over the future direction is crucial, because the hard time is here, is now and make worsen by serious political uncertainties.

yes, Datuk Seri you were right to point out that many have gone through this 10 year cycle before. But are we now more prepared and more mature, phycologically, to face what can be fittingly described as the biggest economic challenge ever, while still trying to get Penang and Selangor to play ball with the Federal Government?

lets think about it together.

regards,
a mandarin-spoken malaysian chinese who is still not so convinced about the Mini Bajet

Samuel Goh Kim Eng said...

ROOM TO REMOVE DOOM?

Avoid prophet's doom
Let us have expanding room
With aid of new broom

(C)Samuel Goh Kim Eng - 110309
http://MotivationInMotion.blogspot.com
Wed. 11th Mar. 2009.

Anonymous said...

Having seen how the BN has run this country for the last 51 years one cannot help but doubt the sincerity of this RM60 billion "Stimulus Package"

The sudden turn about from open denial that Malaysia is in trouble to an admission that we need such a huge stimulus package smells of another attempt to siphon more money out of Government coffers into private pockets

Simple questions as to who will receive these various financial assistance will get no clear answers as everything and anything is covered by the OSA we will never know where the money goes to.

Call me skeptical but at least I am realistic. It is our children and our children's children who will be footing the bill for this sudden and excessive additional expenditure by what I hope will be the outgoing government.

Good riddance to these robbers and murderers.

Anonymous said...

I agree with artic turban's comment. How can you say we should "salute Datuk Najib for being honest" (your article in the Star 11/3). When he took up the finance portfolio, he told the whole nation all that bs crap about "Dont worry, we're strong, we won't be affected". Typical Malaysian denial.

And now the people suffer due to the delayed actions to stave off the effects of the global crisis. Ask us to 'salute' Datuk Najib? I don't think so.

Anonymous said...

I have seen the stimulus package and REALLY there's nothing much for ordinary citizen. It's talks abour employment, retrenchment and foreign workers. How about us? Is there anything there for us?

And finally, our leaders have woken up from their sleep. Just a few weeks back, they said that we are not affected. That our economy is still strong and that we will not be hit by recession! Can you believe that when every other country are hit but not us!

Bunnies said...

Hahahahaha.. finally!! Didnt Najib say that we will be able to breeze thru this recession? Didnt a lot of ministers say that we are rock solid and recession will not affect us? Didnt our 2nd Finance Minister whatever his name is, say that we are not in recession!?

For the love of GOD, it is about time these idiots wake up and do something good about the economy and themselves! DISGRACE!

Kevin said...

Looks like it's more for helping cronies, and a bit left for the rakyat.
After reading Vijay Kumar's article,

Why I am disgusted by the RM60bil stimulus package.


I wonder if anyone can dispute his arguments? Anyone?