Pray very hard

Few months ago, when our leaders were still saying that Malaysia would not be affected by the world’s economic woes, I have figured that Malaysai would go into negative growth. As an amateur in economy,  I feel vindicated that a notable agency, Asian Development Bank,  in the latest report , predicted the same thing that Malaysian economy is going to shrink this year.

The first waves of the economic tsunami had not affected us much.. That  one was about the failure of financial institution and the derivatives market, simply because we did not have much money to invest in these, unlike SIngapore which suffered as a result of failure of financial instituitons in which Tamasek has invested lots of money.

But the second wave will hit us hard. The second wave is the failure of businesses overseas, and as a result, the demand for commodities as well as goods from exporting nations like ours will decrease steeply.

We are a trading nation. Our trade is much more than our GDP. Logic will tell us that there is no way that we can escape the crunch given that our exports will not find any markets. If our goods and commodities cannot find any markets, then our manufacturing industry will be affected.

The bulk of our export,besides petroleum,  is in electronics. We are not the ‘original’ manufacturers , but rather we are just a centre of off-shoring for those multinational trying to find a cheaper labour market. When these mother companies fail, they are not in the charity business and they will just simply wind up or pack up. 

Our domestic market is simply too small to support a strong industrial base.

Our car industry is not efficient.. Our heavy industry( like iron and steel)  is not efficient . We depend on commodities such as petroleum , palm oils etc which have seen prices getting a beating for the past few months. The cost for sourcing petroleum from the sea is now higher than the market prices, how are we not to be affected?

The best indicator to see whether recession has set in is to see the medical or dental clinics. If the crowd in government clinic is increasing and the crowd in the private clinics is decreasing, recession is invariably here, even if the leaders say otherwise,  and even if the figures might show positiove growth..This is because  medical profession, supposedly  recession-proof,  is one of the few professions that would be last hit in a slow down. And this is the case now.

Retrenchment and unemployment is going to go up.  Expanding civil service to take in these unemployed people is not a good solution. It will lead to lower productivity as more people will be doing the same amount of work. Rather, what should be done is to try to  provide skill training for the unemployed.

What can we ordinary folks do? Hope for the best; tighten the belts; cut overhead… Meantime, pray very hard , whatever faith you may be following…

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12 Comments (+add yours?)

  1. clearwater
    Mar 31, 2009 @ 17:26:50

    Malaysia is a small country fooling itself that it is god blessed and immune to disaster. Well, an economic tsunami may be coming and we are poorly prepared for it. Prayers won’t help much other than making you feel better. Those who can do something are too busy politicking. Those who have something are jealously guarding it. Those who want something have switched political parties. Those who can leave the country have done so and are not returning anytime soon. Those of us remaining can’t wait for the next general election.

    Like

  2. pohwatchdog
    Mar 31, 2009 @ 21:29:51

    We need to pray hard for the conscience of the high up to think for our children. We need to pray hard that disaster or financial tsunami don’t hit the country. We need to pray hard that rational and logical thinking prevail. We need to pray hard for the political stability, harmony and tolerant society prevail.
    God save Malaysia

    Like

  3. klm
    Mar 31, 2009 @ 21:59:25

    I know somebody who dont have to pray. Remember, Patrick Lim aka Patrick Badawi. Heard he is in Australia. Took the money he scammed to Kangaroo land.

    I think he is a smart guy. He should be the role model for young Malaysians. We need more of him.

    Then Malaysia can really be plundered with style.

    Like

  4. Disgusted
    Mar 31, 2009 @ 22:15:51

    Yes, we thank God for NOT multiplying to 70 million population as some ex-jerk PM once prompted, just for “marketibility” sake.

    We may also have to thank God again…….in May

    monk

    Like

  5. cilipadi
    Mar 31, 2009 @ 23:49:54

    Forget about praying Malaysian people. Just make sure you vote for PR in future bye-elections and next General Elections.

    Let say if pro-Umno / BN and pro-PR people pray to God at the same time, who do you think God will answer whose prayer? If God is in favour of Umno / BN, will you regard God as fair and vice-versa.

    Come on Malaysian people, don’t leave your destiny to God, but your own hands (i.e. votes)

    Like

  6. vsvsv
    Apr 01, 2009 @ 11:55:27

    Seriously, our government is playing our hard earned money. Why? Look at the budget tabled recently, they still trying hard promoting/encourage people to buy our national car…why car?? why not affordable homes which will provide shelter for the rest of their lives? Don talk about the appreciating value, car is an luxury item which if you invest 50k now, 5 years down the road it will only cost you 20k, not to mention the maintainence and petrol cost. Our government just do not care what is important to us. Even banks play this stupid incentives/ low interest rate strategy to entice people buying car. Look at our neighbouring country, do they encourage people owning a car??

    Like

  7. Nick
    Apr 01, 2009 @ 12:19:45

    Interesting obeservation Doc about crowds in Govt clinics as opposed to private clinics. If you care to shop in Giant or Tesco, do observe the bakey sections. You will notice people are taking away the “2-days bread or leftovers”. In the past, these goods only goes to the desperadoes. Today, everyone is willing to chance them. I took my vehicle for servicing this morning and the chief boss was telling me that his business has slowed. Most owners are postponing major service jobs and going for simple maintenance and stretching their wallets. But Air Asia boss is telling another story (read today’s news). Apparently, there is no let down in people flying. It seems Budget Airlines have filled the void.

    Like

  8. Taikohtai
    Apr 01, 2009 @ 12:34:19

    Patrick Lim in Kangaroo land?
    The recent amendments to Freedom of Information or FOI should make it even more easier to track who owns what and where here.
    And why should Malaysians allow the plunderers to get away with their loot?
    I have suggested before that the next PR government must ensure that extradition treaties with foreign countries be updated to ensure that the plunderers cannot get away. Most Western democracies will be happy to abide.
    Perhaps a private task force should be set up asap to start the trawl before too many big buayas get away scotfree.

    Like

  9. Dr Hsu
    Apr 01, 2009 @ 13:46:59

    Nick,
    my mechanic is telling me the same thing.

    His business has slowed..

    Even hawkers selling their ‘one ton’ mees have slower busniess, but since they have mark up to 4 bucks now, their profit margin is higher and so they have no worry for the moment…

    Like

  10. Dr Hsu
    Apr 01, 2009 @ 14:04:41

    klm,
    you have asked me previously what will the world be after this recession?

    I have given this some thoughts.

    Free market system is still best , so basically I do not think central planning system like communism will come back.

    having siad that, I would think a new form of free market system, with more regulations and supervisory bodies will be in place… The era of deregulation is probably over.

    Like

  11. klm
    Apr 01, 2009 @ 14:33:26

    Taikohtai. Maybe you can check it out. Might be in his Chinese name. He could be in Perth where he has a big mansion. You can also check out another mansion nearby that belongs to Pak Lah, and another one that belong to Pak Lah’s son. These were rumoured sometime back, it was true. True rumour

    Like

  12. klm
    Apr 01, 2009 @ 14:39:29

    Dr . Hsu. You might want to watch this clip. Some of the answers may be there. The speaker is Peter Schiff – an economist. This guy actually called the financial crisis as earlier as 2005. He has a very interesting explanation on issues of regulation and deregulation and free market in the financial crisis. And if what he say is true, we will be worse off by next year.

    Let me know what you think.

    http://www.lewrockwell.com/blog/lewrw/archives/025862.html

    Like

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