I think Malaysians have had an overdose of what I term The Epic Play on the PWTC Stage. Or you are more familiar if I market IT as the Mahathir-Pak Lah Face-Off, whose last act is nowhere in sight.
To prevent any unnecessary sidetracking from the country's way forward on its Vision 2020 journey, Desi feels we must occasionally pause from this old record-replaying ad nauseum, and not forget there's the daily bread to earn. And it's earning through Blood, Sweat and Tears for most citizens. Politics may feed the stomachs of the lucky UMNO, MCA, MIC cronies maybe, also some business cronies, also the Datuk, Tan Sri and some Tun, and howq do you address their spouses? Latin, Luan Sri, and Pun? Yeah, they don't need to perspire, mayhaps. We must not lose sight of the fact that most of Joe Public are fighting an uphill battle trying to fight inflation with a declining Ringgit buying power.
Other countries are foucsing on the Economy; and most of the new emerging "dragon" countries have become formidable "rivals" to Malaysia grapping the FDI (Foreign Direct Investment). China, at 10 percent, and India are galloping forward in their economic growth while some parties -- trumpeting they are patriotic Malaysians and labelling others less than -- are throwing spanners into Malaysia's own economic wheel.
Life could have been much better for every citizen if the Prime Minister's attention can be focused on advancing the contry's economic plans rather than being distracted by some old singers-cum-politicians, aided by some scribes, throwing up mud and debris as if they were angels once now out to "spot the Devils". Sighted the Iblis, anyone? Of course, many Malaysians seem to be entertained by The Sandiwara -- but what ticket prices are you paying?
Economic Window Price1comes courtesy of a Bloomberg Update -- please note that the emphasis is Desi's (THUS BOLDED) ~~
Malaysia Investors Are Spared Mahathir Meddling
By Andy Mukherjee
Sept. 12 (Bloomberg) -- When pressed by his supporters, Mahathir Mohamad had refused to reveal what he would say at the November meeting of the United Malays National Organization, the dominant party in Malaysia's ruling coalition.
Now, we may never know.
In a weekend ballot, UMNO denied Mahathir a chance to address its annual assembly, handing a humiliating defeat to the 80-year-old statesman who had retired in 2003 after leading the party and the nation for more than two decades.
Investors ought to breathe a sigh of relief.
In recent months, Mahathir's relentless verbal attacks against his chosen successor and current Prime Minister Abdullah Ahmad Badawi, 66, had distracted the government and kept it from investing as boldly as it should have.
Although Mahathir insisted that his ``end game'' was merely to make the administration more transparent, many in the party were concerned that he would use the November meeting to foment discontent, if not a straight rift, among the rank and file.
The impasse had reached a point where the power struggle had begun to weigh on Malaysia's economic prospects.
Standard & Poor's said last week that Abdullah's position ``remains tenable.'' With its decisive action, UMNO has made it more secure. By placing Mahathir ninth among 15 aspirants in a contest that selected seven, the party gave a strong signal that it favored a quick return to business as usual.
Now it's up to Abdullah to move full steam on spending proposals, which will put more money in people's pockets. And he must do it before Mahathir discovers a new line of attack, for no one can be sure that the older leader has given up the fight.
Not Spending
V. Anantha-Nageswaran, head of research for Asia and the Middle East at Julius Baer Holding AG in Singapore, says he is waiting to see if Mahathir's defeat, a ``big relief'' for the incumbent administration, will lead to ``policy dynamism and coherence.''
The biggest concern is that the Malaysian government isn't spending enough.
The federal government's revenue in the first six months of 2006 grew 20 percent from a year earlier. Even then, it spent 1 percent less than last year. The overall fiscal surplus in the oil-producing nation was 4.3 percent of gross domestic product in the first half, compared with a 3.8 percent deficit last year.
Since landing the top job in October 2003, Abdullah has scrapped or postponed many of his predecessor's projects, including a bridge to neighboring Singapore.
Mahathir has hit back by accusing Abdullah of favoring his family with government contracts, a charge the prime minister rejected in a televised interview last month.
Saving Proton
Mahathir also criticized the government's liberal auto import policy, saying it hurt state-owned Proton Holdings Bhd., which he had set up in 1982. The unprofitable carmaker is somewhere between the hospital and the mortuary.
After refusing to renew the contract of Chief Executive Officer Mahaleel Ariff last year and selling, for 1 euro ($1.27), a debt-ridden Italian motorcycle maker acquired under Mahaleel's leadership, Abdullah's government is now looking for a strategy to revive the company.
Mahathir questioned the asset sale and said Mahaleel had done a good job and should have been paid more.
As Mahathir went on the offensive, government ministries went slow in disbursing funds for public works.
In a more conducive political setting, the government would have been able to open its own purse strings more liberally to support a consumption boom that's looking jaded. Auto sales have posted six straight months of decline.
Slowing Consumption
The emerging slowdown in consumption is surprising for several reasons. For one, real interest rates are still negative. A one-year bank deposit in Malaysia earns 3.7 percent, less than the current inflation rate of 4.1 percent. There isn't much incentive for households to save their growing incomes.
And incomes are growing, especially for the 490,000 small palm and rubber planters, according to Lee Heng Guie, an economist at CIMB Securities Sdn.
Lee estimates that rubber planters will earn 52 percent more this year than in 2005. Meanwhile, local gasoline prices are about 18 percent cheaper than they would have been without a government subsidy, he says.
Even as consumption falters, second-quarter statistics show a large part of the growth coming from an inventory pile-up. Slowing global growth may force Malaysian companies to cut back production and liquidate stock, leading to a slowdown in gross domestic product.
Public Spending
``Government development spending needs to kick in,'' says Sanjay Mathur, a UBS AG economist in Singapore.
The key lies in hastening the implementation of the Ninth Malaysia Plan, an ambitious 200 billion-ringgit ($54 billion) spending drive spread over five years. The 2007 budget for 9MP, as the plan is known, is 44.5 billion ringgit, a quarter more than this year.
The government this month announced a 2 percentage-point cut in the corporate tax rate, which is currently 28 percent. The reduction, which will be implemented over two years starting in 2007, aims to narrow the gap with Singapore's 20 percent levy.
Improving Malaysia's competitiveness is a medium-term agenda. Less corruption and better integration of the minority Chinese and Indian races in the mainstream are long-term hopes.
For now, investors and analysts would be happy just to see the money starting to flow again.
``The government has been unable to boost private consumption and investment,'' says Julius Baer's Anantha- Nageswaran. ``Until there are signs of that happening, we remain neutral to slightly negative on Malaysian assets, in general.''
(Andy Mukherjee is a Bloomberg News columnist. The opinions expressed are his own.)
~~~~~~~~
From the NST, Sept 13, 2006, comes a second Window Price2~~
According to the Economic Freedom of the World 2006 Annual Report, Malaysia's ranking in the world fell from 17th before 1997 to 53rd in 2004, thus wrote Rupa Damodaran.
Malaysia's ranking for economic freedom slips
MALAYSIA'S ranking in terms of economic freedom has slipped more than 30 places in the past 10 years, due to capital controls put in after the 1997 Asian financial crisis and trends in government expenditure and consumption.
According to the Economic Freedom of the World 2006 Annual Report, Malaysia's ranking in the world fell from 17th before 1997 to 53rd in 2004.
The report, now in its tenth publication by the Vancouver-based think-tank Fraser Institute, compares the level of economic freedom in more than 120 countries through data collected from third-party sources between 2002 and 2004.
Bank Negara Malaysia has, since July last year, lifted some of the capital controls.
Professor Robert A. Lawson, one of the authors of the report, said other factors which brought down Malaysia's ranking included the state of government- owned enterprises, the size of government expenditure, taxes and enterprise.
"Malaysia's economic reforms have seen some improvement in the ratings, but relative to the pace of economic reforms of the rest of the world, it is slower here," he said at a media briefing in Kuala Lumpur (on Sept 12).
The briefing is part of the Eighth Annual Conference of the Economic Freedom Network Asia, hosted by the Malaysian Institute of Economic Research.
Lawson, who is attached to Capital University in the US, said Malaysia can improve its ranking significantly with a relatively small number of reforms.
He identified protection of property rights as one of Malaysia's strong points.
The report measures the degree of freedom in five areas: size of government, legal structure and protection of property rights, access to sound money, international exchange and regulation.
Hong Kong was ranked tops, followed by Singapore, New Zealand, Switzerland and the US.
~~~~~~~
DESIDERATA:
As a business journalist for some years, Desi is very selective in runing comentaries on corporate moves happening in NegaraKu, for example, the cases hogging the media limelight recently, viz:
1. ECM Libra and Avenue Capital, later "merged" into ECM-Avenue, involving personalities like the Prime Minister's son-in-law, Khairy Jamaluddin and his good buddy, NST deputy chairman Kalimullah Hassan.
NB: I don't know both of them personally. I don't owe them, neither do they owe me; what I know is that Kalimullah has been a former The Star journalist, also served the Singapore Straits Times for a time.
2. SCOMI and its associated comanies, involving the Prime Minister's son, Kamaludin.
NB: I don't know him either. My interest in this issue arises fromthe fact the case involves Pak Lah's son, who I know has all along been a corporate man.
Hence, I wish to stress what I write today is just as an interested freelance journalist.
Generally, writing a commentary about a particular Company, especially one listed on any Stock Exhange, the writer has to get "all his facts" right and up-to-date. Any general news writer who thinks he/she can just jump into the filed like a parachutist -- presuming to be anexpert armchair analyst doing a critique with a understanding of "corporate" moves like shares changig hands, especially involving high-profile buyers and sellers -- he's risking his neck and his reputation. And such reports can affect the Company's share price on the market -- so Writers, beware! Readers more so!
First, information regarding the facts of the case must be "absolutely correct and up-to-date", so if you don't have reliable sources for such information, don't even try!
Second, a writer may also land up like a participant akin the fabbled "seven blind men" describing what the shape of an elephant is by a mere touch of the animal's anatomy. It is the sum total of the seven blind men's descriptions that may yield a reasonable "composite" picture, even then you have the "missing" connecting parts of the anatomy.
So the trap one can easily fall into when attempting to write an "account" of a certain listed Company like ECM-Avenue is being a victim of "knowing the parts" and the parts are like "dots" in a puzzle, where one is not able to see the BIG PICTURE BECAUSE YOU ARE NOT ABLE TO CONNECT THE DOTS.
I remember one of my ER, with good intentions, pointed DEsi to one post analysing one of the issues "very hot then". I declined mainly because I have read several Posts -- with much input by Commenters too! -- that failed to meet the two criteria I mentioned above.
We see it's often a case of "blind leading the blind", or at best, "One-eyed Jack leading the blind".
I don't know whether to laugh or cry.
Thanks, Ipohlang who knows who you are, for pointing me the way.
But be "carrefool" (I owe this new coined economic term to one THeels"), don't get your heels twisted!
You cannot wear high heeled shoes when climbing Mount Kinabalu,:) what more Mt Everest!:(
And Don't Play The Stock Market like Blind Man's Puff!
Your chances in making some quick bucks are better following Desi up to Genting!
So Bye, Bye! And there's a message in the parting shot! Made famous by one ex-Finance Minister whose name sounds close to a DIME.
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