Inflation damper

 

 

The revised budget just announced has many salient points and is a better budget than the original one in dealing with the present gloomy economic situation.

The special tax relief of RM 2000 must be welcomed as it will put some much needed Ringgit  in the pockets of the middle class. As with the free 20 kg of rice to be given to hardcore poor every month.

The 3 % cut in EPF contribution by employees is more controversial, but since there is a choice for employees to opt for, it is really up to the individual wage earner to choose.

But a better way to save more money for the Rakyat is perhaps reducing GST from 6% to 4%. From April till December, the government has collected 51 billions from GST alone. That was for a period of 9 months. This is equivalent to RM 68 billion a year. Cutting 2% will probably Save the people 12 billions, which would be a much needed relief. Even with a cut of 2%, GST collected should be more than enough to cover the reduction of contribution from Petronas due to lower crude prices.

Another way is reducing further the pump price of petrol. As I have mentioned in my article Dark Clouds over the Horizon, when crude oil price was at US$60 a barrel in June last year, pump price in US was around US3.00 per gallon and in Malaysia, around RM 2.00 a liter. When crude prices fell to US$30 last month, US pump price dropped to 1.97. Going by the same rate, our pump price should be much lower around RM1.33 perhaps. Since most middle class Malaysians spend on the average a few hundred ringgit on petrol, it would go a long way to provide some relief for the cash trapped rakyat.

imageOil prices are tumbling, petrol should be much cheaper! ( photo courtesy of vox.com) 

Yet another is the energy tariff. When oil or gas prices go up, our electricity tariff increases ( subjecting to government approval). So it is only logical that when crude prices have fallen so much, our electricity tariff should come down. This would provide relief not just to the working class, but to the industries and retail businesses  too.  Reduction in electric tariff will be an inflation damper; it would reduce the overhead and thus cheaper goods and services.

Another budget saver would be gradual reduction of our civil service. But I will save that to another post.

 

 

 

 

 

 

 

No time for serious work ( whack a mole 2)

 

MB of the rice bowl state  will be changed. It’s a foregone conclusion. In our country, it is not how good you are that matters, it is how supportive you are towards the top that is most important, and of course the bigger cable you have, the better pull you get.

That is true in  the Big Brother. It is also true in lesser parties such as MCA or Gerakan. It is even true in some corporate bodies. Opposition parties are no different, from what I have observed.

Anyway, the incumbent became MB probably because he is the scion of the Old Horse. The Top wanted to appease the Old Horse, what better gesture than putting his son to head that state?

The scenario changes after the Old Horse and what RPK termed as ANC targeted their  guns on the Top. On the surface, ANC is going all out to topple  the Top because of alleged wrong doings of the latter. In actual fact, no one is on  moral high ground; it is self interest that has prompted the vicious fight between the two Big Gajah crocs.

Big brother always practices the politics of back scratching ( besides back stabbing, that goes without say):  You scratch my back, I scratch yours. You hit my back, I will kick back with all my Wing Choon skill.

If you support me, I will give a cable to pull your son up. If you don’t support me but not actively opposing me,  I may not dump your son, even though I will no longer pull the cable as hard as before. Maybe I change the cable to a string.

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But if you openly attack me, like what is happening now, then there is no other choice but to cut the cable and let the son fall.  That is the politics of ‘scratch my back’ in this country.

This is exactly what is happening. With that, another head has been hit back into the hole in this high stake ‘whack-a-mole’game I mentioned yesterday. ( refer my post yesterday). Unless The old horse can produce more objects to come out of the holes in the game, the Top may even be able to continue play this whack a mole game till the next election. The Swiss head that is emerging from one of the holes may be troublesfome, but since this is not extradictable, the Top has just to grow a thicker skin when meeting foreign dignitaries, or playing golf with you know who.

But being constantly on guard to hammer deal with objects on their emergence, there will hardly be time for serious work, and that is what really worries me, especially when the whole world is entering a period of great uncertainties!

 

 

 

Whack a mole!

Have you played or at least seen someone play before a hammer arcade game called ‘whack a mole’ ? I am sure you have at least seen it play either in real life or on television.

Here is how the game is played: on a board or table, there are many holes . You will be given a hammer-like object. The aim of the game is to hit emerging heads or objects coming out from the holes. Each  time an object emerges and you hit it, you gain a point. The objects will emerge from the holes randomly, and will go faster and faster until you can no longer keep up , in which case the game ends.

image

Someone at the very top is currently playing a sort of this game in real life. The only difference is the objects emerging are news that is detrimental to his hold in power.

So far, it has been quite fun. He has managed to hit everything that comes out and make them disappear inside the holes.

The game may be fun for a short while but to constantly play it for many months, it becomes taxing and tedious. It is easy to be on guard for a day or two, but for months? we have to admire his resilience.

What more one of the newly emerged object is Swiss and may not be as easy to hit back as those made at home!

I  really don’t envy this player’s position, nor the game of whack-a-mole that he is playing!

How much more stamina he has? How much more objects are going to emerge from these holes? How fast they are emerging? All these factors may determine how the game may end!

 

 

Dark clouds over the horizon

 

Coming home after a prolonged stay of many months in the States and Australia, where my children are working, I was shocked by how much Ringgit’s buying power has shrunk.. Prices of almost everything, including food, have skyrocketed. Even street food like prawn mee or fried Kwai teow have gone up so much, it’s scary. Items in groceries and supermarkets are selling much more expensive than before, on top of the 6% GST.

Petrol pump price however remains at RM 1.95 per liter. This despite global oil prices falling to US30 per barrel yesterday.  I remember that in July last year, when I was driving across US with my wife, oil price was around US60, and US pump prices was around US3.00 per gallon. At that time, our pump prices was about the present level too.
Now US pump prices have come down to US 1.97,  giving American consumers a big savings on energy cost and putting more money in their pockets to use. Although US oil companies are suffering, the ordinary people have more disposable income due to cheaper petrol and energy bills.

Malaysians, on the other hand, have to content with rising food and consumption prices, while cheap oil in the world doesn’t seem to translate to any real savings in their energy usage. If we follow US trend, our pump prices should be much lower than it is now, thus at least save us some money on petrol and energy usage to counter the skyrocketing cost of living, and give us some reprieve to fight inflation. Maybe our authority should take another look on this, and pass the benefits of cheaper oil to ordinary people by lowering pump prices. That will in a way be deflationary, and helps to counter the high inflation that we are experiencing now.

Oil prices are going to be low for a long time. While demand for oil has slowed, supply has been increasing, largely due to the shale oil production in US. US is now producing enough oil for its own consumption,, and does not need to import from its traditional suppliers in Middle East. Middle East countries have to look to Asian markets to sell its oil, but unfortunately, China is slowing down and need less oil energy than before, and thus there is a glut in global oil supply.

More and more electric cars and hybrid cars are being produced, and even for petrol-powered cars, new technological advances are making them more energy efficient. Wind and solar energy are being tapped increasingly, even in US, the country that consumes the most oil. As we were driving along the Columbia Scenic Drive, we saw so many wind turbines on the hills we passed. Then in cities like Portland, electric stations can be seen in the cities for electric cars to recharge.

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Electric Cars charging stations in Portland that we passed

 

 

As a oil producing country, we have not foreseen nor anticipated  this scenario. We didn’t plan for the rainy days during the sunny period. Oil has given us prosperity for many years, but it has also given us a false sense of security. In hindsight, we should have used oil money more efficiently to diversify and lessen our dependence on oil income. Instead, oil money has made us complacent, and the many handouts from the government has made us much less competitive. GST may have helped the government with alternate source of revenue, but the drop in oil prices has resulted in massive depreciation of our currency, and as a result, cost of living has skyrocketed, and even working 2 jobs, as advised by a ‘wise’ leader, may not be enough to make ends meet.

Is 2016 going to be better? I don’t think so. It may get worse before we can get better. But we must start learning to be competitive by slowly replacing the ‘crutches’ that we have given out all these years. We must influence our people’s mindset to be more proactive, more enterprising, more hardworking and prepare ourselves for the next phase in the world’s industrial revolution. With the advent of 3 d printing, we are entering a new era of digital manufacturing as opposed to the old ‘mechanical’ manufacturing.
If we are not well prepared, we may never get back to the stage where we were before!

Great advice!

Pp

 

(this letter is in response to the various advice that our leaders gave in the past few months)

Dear VVIPs,

Thanks for the many wise advice that you dished out to us to help us weather the rising cost of living.

Your wise thoughts are indeed heartwarming, and very befitting of people holding high positions.

Who but those ungrateful people would disagree with the advice that GST is a good tax to get revenue for the country’s administrators? Never mind the 6% tax has directly or indirectly raise living cost by much bigger margin—that is not your doings but the profiteers.

Who but those lazy minded people would disagree with the advice to get up early and use alternative roads when government agrees to have toll hike? It is called progress that  Malaysians already have to get up very early to go to work even when using tolled roads, and often come home late because of the traffic jams on these tolled roads. But why blame the toll hikes when people choose to live far from their workplaces;they  have only themselves or their parents  to blame for not being able to afford properties near their workplaces.

Who but those illogical people would disagree with the advice to take up two jobs to survive the rising cost of living? Isn’t it logical that if you cannot cover your expenses with one job, you should get two, or even three? After all, it is these people’s duty to earn as much as they can to feed their families, so what if they have to sacrifice family time and rest time to take up another job to make ends meet. Look at how ants work; people should emulate these basic creatures and not waste time sitting in front of tvs or sleeping 8 hours a day. If they get sick due to working 2 or 3  jobs, it will cause them only RM 1 to see a doctor in a government clinic; isn’t that great?

Who but those gluttons would disagree with the advice to pack lunch from home if outside food is unaffordable? What’s wrong with getting up earlier to cook or prepare packed lunch, if they feel outside food is beyond their reach. It’s not your duty to make sure that they can afford outside food. After all, home prepared food may even be healthier as they don’t contain as much seasonings as outside food.

All these are great pieces of advice that only great people like you can come out with.

These advice must rank with the famous advice that Marie Antonette gave to the hungry French peasants that marched to the doorsteps of her Palace: let them eat cake. Her well meaning advice was distorted, again by ungrateful and illogical historians, to show her perpurted ignorance of poor people’s plight. It was indeed a good hearted gesture- what’s wrong with eating cakes when there is no more rice?

What’s wrong with tightening belts and working harder when people have no money to spend? After all, it is not the leaders’ duty to look after them.

This is what the people should do: Ask not what the leaders can do for them; ask what they can do for their leaders instead. That is the least the rakyat should do for the wise leaders who have to rake their brains and come out with such good advice!

Lessons for Malaysia from World’s top 2 leaders

Perhaps all of us can take some time off and listen to President Obama’s speech to the African Union in Ethopia, as well as Chinese Chairman Xi Jin Ping’s advice to government leaders.

part of the transcript:

Now, let me be honest with you — I do not understand this. (Laughter.) I am in my second term. It has been an extraordinary privilege for me to serve as President of the United States. I cannot imagine a greater honor or a more interesting job. I love my work. But under our Constitution, I cannot run again. (Laughter and applause.) I can’t run again. I actually think I’m a pretty good President — I think if I ran I could win. (Laughter and applause.) But I can’t.

So there’s a lot that I’d like to do to keep America moving, but the law is the law. (Applause.) And no one person is above the law. Not even the President. (Applause.) And I’ll be honest with you — I’m looking forward to life after being President. (Laughter.) I won’t have such a big security detail all the time. (Laughter.) It means I can go take a walk. I can spend time with my family. I can find other ways to serve. I can visit Africa more often. (Applause.) The point is, I don’t understand why people want to stay so long. (Laughter.) Especially when they’ve got a lot of money. (Laughter and applause.)

When a leader tries to change the rules in the middle of the game just to stay in office, it risks instability and strife –– as we’ve seen in Burundi. (Applause.) And this is often just a first step down a perilous path. And sometimes you’ll hear leaders say, well, I’m the only person who can hold this nation together. (Laughter.) If that’s true, then that leader has failed to truly build their nation. (Applause.)

You look at Nelson Mandela — Madiba, like George Washington, forged a lasting legacy not only because of what they did in office, but because they were willing to leave office and transfer power peacefully.

Translation:

xijinping says that if anyone wants to hold a government position, don’t think of enriching himself. If anyone wants to be rich, never hold a government position. If a person wants to hold a government position, do it without any worry of any ‘skeletons in the closet’.Don’t view power that comes with government position as a shortcut to satisfy one’s greed and self interest. Otherwise, it is just  a matter of time, that person will be finished.

No sight of the end of the tunnel yet!

image imagehttps://www.facebook.com/BERSIH2.0OFFICIAL/photos

Updated:

Bersih 4.0 entered its second day today. I walked yesterday among the crowd, hot and tired, but the hope of a better governance has kept me going. ( refer to my post yesterday).

The turnout on the first day was nothing but mammoth. It was bigger than Bersih 3 which I have witnessed first hand too.

This time, I was happy and yet disappointed at the same time.

Happy to see so many youngsters, some of them so pretty and handsome and so well groomed that they would probably rather sit in an Aircond room than standing under the hot sun. Yet there are so many of them, braving the hot humid weather and the scorching sun to march for better governance. This youth would be the backbone of the nation soon, and it is good to see the political awakening in so many of them.

Disappointed that this was mainly an one ethnic show. While Bersih 1 and 2 have predominantly Malay participants, this one is mainly urban Chinese Malaysians, maybe as high as 85%.

What inference can we draw from this?

  1. The discontent and the perceived farce surrounding the billion ringgit  ‘donation’ issue and the rapid depreciation of our money are mainly felt by the urban people. Most Malays are not as much concerned about this as the Chinese Malaysians
  2. the Anwar factor is rapidly losing its relevance. Without PAS in PR, Malay support for PR is only marginal… GHB is too new and untested to draw Malay support for the opposition pact.
  3. without massive turnout of the Malays in this Bersih, those who hope to use a vote of no confidence to unseat the present PM can forget about it.  MPs in BN will not be pressured into joining the opposition camp to vote against PM, since they would not feel pressurized by the lack of Malay presence in this gathering.
  4. The component parties like MCA and Gerakan can forget about a come back in the next election. Unless  the big brother is magnanimous enough to give them some rural seats ( an impossible tasks knowing how Warlords in Big Brother operate), they can forget about doing better in the next election. If anything, urban people are more against these now. These parties’ relative silence on the donation issue shows their impotence in national politics. Their role is mainly fire fighting, but with urban populace better educated and informed now, even this fire fighting role would not get them much headway.
  5. Unless and until the opposition can galvanize more rural support, the next GE will see Big a Brother win again.

After 2008, I thought I saw a dim light at the end of the tunnel. Now I realize that the end of the tunnel was still very far away; the dim light was just an illusion, no thanks to the breakup of the opposition pact.

Time and again I have mentioned in my blog about the Taiping Rebellion of China during the Qing Dynasty. The rebel movement conquered many provinces initially and would have probably overthrown the Manchus long before Sun Yat Sun did, had it not degenerated into vicious infighting and power struggle among the top few leaders. The spoilts of war derived from the initial victories was too much for the bunch of rebel leaders, and the intoxication of power from the few provinces they conquered was too much for these leaders to handle. The Qing emperor, though inert and corrupted, was able to crush them and quell the rebellion.

History is a mirror. Those who fail to learn from history will meet the same fate as those before them.

One good thing about history. It too teaches us that a corrupt regime will not last forever. It is just a matter of time that change will come. Who would imagine Suharto and Gaddaffi fall from office? Yet, they did.

This article is also available in Malaymailonline.

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