The haze over our economy

Met  a businessman friend yesterday and had a chat with him. He was quite pessimistic about the economic situation in our country. He mentioned that there is not much of incentives to invest in new businesses, and retail sector is at best struggling. With the uncertainty of how long the present PM may last in office, and a looming party fight for some of the BN parties, including UMNO and MCA, foreign investors would be either investing elsewhere or withholding their funds to wait for a clearer picture.

Without much foreign investment coming in, the country’s growth is mainly dependent on the good prices of petroleum and commodities. With the US in a state of recession, our export manufacturing sector would probably be affected as well. The share market is also not doing as well as it should be due to the political scenario in the country. All these add to his pessimism and he is thinking of investing probably overseas.

I am sure he is not alone.

With inflation rearing its ugly head, the ordinary people will be very hard hit. We were told to tighten our belts, but sooner or later, there is no more space to squeeze our belt any more. It would be so tight that we will not be able to breathe.

Subsidies in the long term is bad, and i personally am not in favour of subsidy in the long run, but perhaps now the gvernment should really think of using the Petronas money to subsidise our fuel prices until the economy is on the boom again. Our petrol prices are among the more expensive among the petroleum-producing countries. We should not compare our prices with those countries that have no petroleum output.

The govenrment needs to give more impetus to businesses, and a more level playing field must be instituted. NOw we are almost at the mid term of the 9th Malaysian plan, but how many of the projects under 9th plan has been implemented? Those which are being carried out are contracted out to certain parties only and not much has trickled down. There are also so much of wastage , like the 4.7 billion PKFZ fiasco.

Perhaps a relook at NEP should be done and done urgently. Restrictions on foreign investment should be reviewed to attract more foriegn business here. With a more level playing and fairer system, perhaps even local businessman can start to invest more within the country, thereby creating more jobs and more business activities.

According to of the Wall Street Journal, “Malaysia falls behind Singapore, Vietnam and China in attracting FDI and is far from becoming the new Asian metropolis; FDI dropped from $5.5 billion in 2001to $3.9 billion in 2006”.  2008 will not be any better, looking at the economic activites in the country.

Can the government go back to the job of governing and improving the economy? With so much of politicking, I really doubt so, and I tend to agree with my businessman friend that economic prospect may remain dim for the next year or so.

According to reports, the haze situation will be bad this year, but I think it will not only envelop our country physically, but economically as well.


10 Comments (+add yours?)

  1. yh
    Apr 09, 2008 @ 12:07:34

    dont be surprise when the mid term report comes out, the blame will be on the voters who booted out the corrupt BN from 5 economically vibrant states. not for once, they will look into the mirror to refelcet on their inadequacies, bad policies and corruption.
    anymore RM250 screwdrivers? oh yah, I just remember that ACA is reported to be ready to charge these screwdrivers. but it has been 6 long months since the last report. well, as long as you are in the power loop, its still hunky dory time. who says the economy is bad?


  2. Dr Hsu
    Apr 09, 2008 @ 12:44:39

    yh, that is typical of Malaysia. Whenever there is some exposure of a scandal in the media, there will be a big hoo ha in the press, and officials will be quick to promise action. After a while, when everyone gets on other things , these officials will conveniently forget until another scandal crops up. We really need an ombudsman system or to have a totally independent ICAC.


  3. jeff
    Apr 10, 2008 @ 00:18:19

    So long as Malaysia enforcement agency is under the watch of the corruptors, we shouldn’t expect much improvement in ordinary Malaysians life in near future, we are having a very serious systemic and judiciary rot from top down, until it is rectified, no savvy investors will lay their funds in this country, even local investors are moving their fund outside. No right minded person can continue subsidizing umnoputra insatiable appetite forever.


  4. jaames loh
    Apr 10, 2008 @ 01:33:41

    noting yr observations, its not just abt incentives, transparency for a biz operator,one of the most fearful factors we moved out since 2003 is the ethical decay of biz man in malaysia,everybody seemed to be in a quick kill mode.the smi n sme run by chinese are very lacking in value add,,seemed in 2006 i attended a sme conference bwt china n mal..noticed that malaysian with 200 to 300 workers are acting they are the know all..most are complaining lack of funding from local banks. the crux of the matter these technology are outdated, biz man attitude are plain deniel. in china we have china price..every week price keep dropping n better quality! we can import in parts 46 % cheaper. would suggest stop run ard policies etc..its still the soft ware.the out cries of corruptions are just merely excuse, we have choices , good money chase good money


  5. romerz
    Apr 10, 2008 @ 01:51:55

    Not going to comment much except that this country of ours is not run by the ‘best’ available.

    When I left school, there was this group of very good friends from all races, numbering about 17. A few of us fell along the way but the majority went on to achieve great personal heights but not in government where it matters.

    Without bragging, one went on to the World Bank and now heads of a division within UNDP, another gave up his citizenship and served as an elected councilman for the Liberal Democrats in UK, another holds a high ranking position in an Australian utility company and so forth.

    Even those who chose not to leave the country are doing well, CEO of a multi-national, owner of a large private enterprise, etc.

    The only 2 amongst my friends who somehow made it to respectable positions within semi-government organizations are bumiputras.

    None of us made it to positions where we could influence the direction of how our country progressed because we would not sacrifice our ethics which had been so ingrained in us by a certain Mr Goon Fatt Chee when we were in school.

    I’m not saying that anyone from the 16 of my friends could have done any better for this country but we were never able to even try, given the many obstacles put in our way.

    This country would do a lot better if quotas were put aside and meritocracy was allowed to flourish and even encouraged.


  6. Dr Hsu
    Apr 10, 2008 @ 09:54:56

    romerz, i agree totally with you. Many of my high school classmates are important people , too. SOme are CEO of listed companies, and one a multinational. Some are world class doctors working overseas.

    In fact, Many Penang people are holding positions of great eminence overseas. And not only Penang, many from other areas of Malaysia, like Malacca, Alor Star and Taiping and so on, have become great leaders of industries or corporations, or professors and lecturere all over the world.

    It is really a pity that we have this phenomenon called brain drain, which is part of the results of the unfair social conditions that exist in the countries.

    To move forward, we cannot repeat the mistakes of the past. We need to reward excellence and practise meritocracy in order to compete in the globalised world.

    We need to instill a clean and meritocratic system within our political parties, whereby the best can be expected to go up and hold positions where they can make a difference. At the moment, mediocre politicians are holdig positions of great importance. Because of their mediocrity, they have to play politics to consolidate their positions and hence , much time and efforts are wasted on politicking rather than attending to business of the State.

    This is true in all the BN parties.


  7. San
    Apr 10, 2008 @ 17:13:15

    New Cabinet:

    Prime Minister – Anwar

    Deputy Prime Minister – Lim Kit Siang

    Culture Minister – Farish Noor

    Defence Minister –

    Education Minister – Nga Kor Ming

    Environment Minister – Teresa Kok

    Finance Minister – Tony Pua

    Foreign Minister – Ramasamy

    Health Minister –

    Home Minister – Ronnie Liu

    Information Minister – Jeff Ooi

    Law Minister – Teng Chang Khim

    Manpower Minister –

    Sports Minister –

    Technology Minister –

    Trade Minister – Khalid

    Transport Minister – Liew Chin Tong

    (Penang Chief Minister – Lim Guan Eng)


  8. jeff
    Apr 11, 2008 @ 01:42:44

    It is mind boggling to hear that reader of your blog saying corruption in high ranking government officials is just an excuse from M’sian businesses not able to compete internationally, obviously that person has no clue how discriminatory government policy toward non -malay citizens own businesses in the country, layer n layer of red tape were put in front of us practically draining our resources from achieving excellence by mere fact we are non -malay, so third class citizens deserve failure in own country.


  9. monsterball
    Apr 12, 2008 @ 01:08:19

    Malaysia has a bad reputation to be unreliable for foreign investors right now.
    The present unstable and unreliable political situation says it all…….and the society are fighting each other..not really united… the economy is bad due to great mis-managements…by UMNO.
    So all the three…..political…social and economical situations are not favoring investors… matter how much incentives…..the government try to give ….to attract investors.
    They will not buy the story…….when facts are so clear for them to see…….Malaysia is somewhat a weird an funny country managed by funny low class idiots.
    Anwar is the only solution towards a better Malaysia. Even if he fails…..nothing can be worst than that…..with so much accumulated corrupted politicians….walking freely with “Tun” and “Tan Sri” tittles. Is a crazy nut country…..for anyone to invest!!
    Malaysia s joke country……right now….all created by Dictator……..Mahathir…out to destroy everything. Unfortunately………’Make a Change” election results………is very good ……..but not good enough to throw those UMNO bastards out.
    And giving them …a chance again…Dollah is not fast or strong enough to make good decisions. UMNO will bankcrupt our country……if we are not alert and be united as Malaysians.
    Once oil money is gone….we are heading towards hunger and poverties….just like in olden days….under the British rule….need to carry the balls of foreigners again…to save us all.


  10. jeff
    Apr 13, 2008 @ 00:46:25

    monsterball; carry the ball of British is a lot easier than the ball of umno putra racists thugs, at least the Brit. treat all Malaysians as “shit”n governed the country well, but TDM n his “pig” umnoputra are failing on both counts also making from bad to worst.


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