Sunday, September 14, 2014

Why our Economy's In The Shit.

This right wing Malay government is pretty good when it comes to directing the rakyat's attention. Notice that important news like naik harga is always announced like a day or two before Raya Haji or some other celebration like that where people are too sibuk to even care. 

Lately the focus was on Sedition Act and quite a few politicians, students and even a university professor has been charged. All of this is in a way to divert your attention to the real matters at hand which is the economy. 

Some basic facts on our current economy that I think will affect us more than the current power struggle crisis.

Why GST?

"We have to find additional sources of income and that's why we have to implement the GST," the Star reported Najib as saying at a seminar on Strengthening the National Economy. 

Yep, we are broke people. Somebody is on a spending spree thinking we're Norway. And in the end it's the people who have to cough out the dough, having no clue whatsoever where it's going and what it is going to be use for. What transparency?  

So, Where We At..

Ratings agency Fitch cut its outlook on Malaysia's sovereign debt to "Negative" in July last year, Fitch reaffirmed the negative outlook last month.

Despite the reduction in government spending, Malaysia's national debt still hovers just below a critical legal ceiling.

At 54.6 per cent, the Malaysian government's debt-to-GDP ratio is jointly ranked with Pakistan's as the second highest among 13 emerging Asian markets after Sri Lanka, according to data compiled by Bloomberg.

Malaysian household borrowings hitting 86.3 per cent of GDP in 2013 when it had been just 60.4 per cent less than six years ago, surpassing even the US' 80.6 per cent registered in the first three months of this year.

Malaysia’s ballooning credit is now prompting others to join Fitch in eyeing Malaysia with caution.

Judging by all this I would presume that a red alert is in order but Najib seems to be cool about it. All he cares about is the growth in GDP (6.3%) which doesn't really do shit for regular people like me. click

Why Are We in The Shit

Putrajaya continued to rack up public debt despite trimming the headline deficit number, saddling the nation with liabilities amassed primarily through government-linked firms. (MAS, Khazanah etc)

Huge infrastructure investments, such as the Klang Valley Mass Rapid Transit (MRT), KLIA2, I still have no idea why we need to have KLIA2? 

Another contributor to local household debt is Malaysians affinity for cars coupled with among the world's highest vehicle prices.  

Spiralling home prices has reduced consumers' spending power despite burgeoning debt levels.

About RM174 billion was illegally siphoned out of Malaysia in 2011, making the country the fourth largest exporter of illicit capital that year after Russia, China and India, said anti-graft watchdog Global Financial Integrity (GFI). 

RM174 billion? We are in with the bigdogs here. Respect! 

And did our govt do anything about this situation? Or they just can't do shit about it? Or they are they actually involved in it? Hey, who the fuck knows?

Anyway, what is Mahathir's take on all this? Click