The political reform of our Sarawak government is quiet blur and everyday we are waiting for the latest outcome of our political situation hoping for the changes. Sorry to say, we ignore our economic situation, the global economic crisis has greatly affecting not only the Malayan but Sabahan and Sarawakian too.
Our government deny that our economy is still very strong but in the actual fact that we are on the brink of facing recession, our government is hiding the dilemma from the people. No doubt our ability in managing of our financial system is quiet a far ahead of others and it is a miracles that we are spare from the fall out of the systemic collapse of the whole world's financial system. Our trade volumes especially exports have slowed down considerably - by almost 30 percent. We can't escape from the global economic crisis, although our economy has been resilient in the first-half of 2008, but is increasingly being affected by the global downturn.
Najib has reassured that our economy will be spared from world global economy next year. The people should be well informed of the real situation, everyone felt the heat of the recession, though the global oil prices has dropped dramatically but people are still burden paying more by 38cts of the petrol per liter, the actual price of the petrol per liter is RM1.62 but it was adjusted to RM2.00 per liter.
Malaysian public and businesses will have to learn to adjust quickly to the global financial crisis. The crisis will inevitably dampen consumer demand in Europe and America - two biggest markets for our local producers.
Hence, Mahathir's observation is valid:
"Now the common practise is for importers to open Letters of Credit (LCs) with banks to ensure that when they receive the goods the corresponding banks will release the money. However, if the importers' banks go bankrupt they would not be able to transmit the payment.
They may be bailed out by the US Government. But they may not consider paying Malaysian exporters as a priority. In which case we will not be paid. Worse still we can no longer entertain orders coming from this market. Our trade must shrink.
We are not talking about one company. We are talking about hundreds of companies trading with America and Europe and other countries not getting paid for their exports. We are talking about tens of millions, even hundreds of millions of Ringgit worth of goods not being paid for."
Our Federal reserve has dropped. And what happen to our stock market, the Composite Index lost almost 14 points to close at 904.28. To save the ailing Value Cap to buy up stakes in undervalued stocks, the government has intention taking RM5 billion from EPF and then implementing 8 percent EPF contribution deduction another burden to people to pay more tax.
Malaysia has no direct exposure to the US market but is increasingly feeling the shock from the slowing US economy through trade and investment linkages. The external downturn has not reached bottom yet. The US economy is on the brink of a recession, Japan has reported a contraction and Europe is coming to a standstill. Singapore has gone into recession signalling massive retrenchment and a looming recession tens of thousands of Malaysians are expected to be out of job soon. It is very important for the government to strategize how to cope with higher unemployment rates.
Fearing a dismal global outlook and hit by rising prices of raw materials, the government stretched the fiscal deficit to 4.8 per cent in ’08, reversing a 9-year progressive deficit reduction. This may be justified as difficult times call for drastic measures. The longer-term worry is the high dependency on oil revenue to finance fiscal spending. Government revenue will be affected by the decline in commodity prices if other sources of revenue are not sought. Given the heightening pressure on the economy and decreasing oil prices, the budget deficit is likely to exceed 5.0 per cent of GDP in ’08. The deficit may even exceed 4.0 per cent of GDP in ’09 with the increasingly unnerving outlook.
Inflationary pressures have gathered steam, with elevated food prices lifting inflation to 8.5 per cent in Aug’08. Despite small reductions in oil prices, domestic inflation has remained sticky so far. Traders and retailers are not lowering the prices for fear the cuts may be temporary. Fluctuations of retail oil prices have created more market uncertainty. Government enforcement appeared lost and unable to control the situation. Prime Minister Abdullah has called for joint consumers' effort to bring down prices. So far, no consumer group has responded positively to his call.
With the financial crisis still unfolding and confidence failing, the bigger fear is the credit squeeze. Tight credit will have grave implications on consumer spending and investment activity, crippling the already slowing economy. The damage to the global economy will be deeper in 2009 with all major economies expected to slow down markedly.
Unfortunately, we are blaming Badawi for the problems and pressure him to step down early and to be replaced by the most capable one. The worst has yet to come, the result of UMNO general election will greatly affecting Malaysian as a whole.
Our government deny that our economy is still very strong but in the actual fact that we are on the brink of facing recession, our government is hiding the dilemma from the people. No doubt our ability in managing of our financial system is quiet a far ahead of others and it is a miracles that we are spare from the fall out of the systemic collapse of the whole world's financial system. Our trade volumes especially exports have slowed down considerably - by almost 30 percent. We can't escape from the global economic crisis, although our economy has been resilient in the first-half of 2008, but is increasingly being affected by the global downturn.
Najib has reassured that our economy will be spared from world global economy next year. The people should be well informed of the real situation, everyone felt the heat of the recession, though the global oil prices has dropped dramatically but people are still burden paying more by 38cts of the petrol per liter, the actual price of the petrol per liter is RM1.62 but it was adjusted to RM2.00 per liter.
Malaysian public and businesses will have to learn to adjust quickly to the global financial crisis. The crisis will inevitably dampen consumer demand in Europe and America - two biggest markets for our local producers.
Hence, Mahathir's observation is valid:
"Now the common practise is for importers to open Letters of Credit (LCs) with banks to ensure that when they receive the goods the corresponding banks will release the money. However, if the importers' banks go bankrupt they would not be able to transmit the payment.
They may be bailed out by the US Government. But they may not consider paying Malaysian exporters as a priority. In which case we will not be paid. Worse still we can no longer entertain orders coming from this market. Our trade must shrink.
We are not talking about one company. We are talking about hundreds of companies trading with America and Europe and other countries not getting paid for their exports. We are talking about tens of millions, even hundreds of millions of Ringgit worth of goods not being paid for."
Our Federal reserve has dropped. And what happen to our stock market, the Composite Index lost almost 14 points to close at 904.28. To save the ailing Value Cap to buy up stakes in undervalued stocks, the government has intention taking RM5 billion from EPF and then implementing 8 percent EPF contribution deduction another burden to people to pay more tax.
Malaysia has no direct exposure to the US market but is increasingly feeling the shock from the slowing US economy through trade and investment linkages. The external downturn has not reached bottom yet. The US economy is on the brink of a recession, Japan has reported a contraction and Europe is coming to a standstill. Singapore has gone into recession signalling massive retrenchment and a looming recession tens of thousands of Malaysians are expected to be out of job soon. It is very important for the government to strategize how to cope with higher unemployment rates.
Fearing a dismal global outlook and hit by rising prices of raw materials, the government stretched the fiscal deficit to 4.8 per cent in ’08, reversing a 9-year progressive deficit reduction. This may be justified as difficult times call for drastic measures. The longer-term worry is the high dependency on oil revenue to finance fiscal spending. Government revenue will be affected by the decline in commodity prices if other sources of revenue are not sought. Given the heightening pressure on the economy and decreasing oil prices, the budget deficit is likely to exceed 5.0 per cent of GDP in ’08. The deficit may even exceed 4.0 per cent of GDP in ’09 with the increasingly unnerving outlook.
Inflationary pressures have gathered steam, with elevated food prices lifting inflation to 8.5 per cent in Aug’08. Despite small reductions in oil prices, domestic inflation has remained sticky so far. Traders and retailers are not lowering the prices for fear the cuts may be temporary. Fluctuations of retail oil prices have created more market uncertainty. Government enforcement appeared lost and unable to control the situation. Prime Minister Abdullah has called for joint consumers' effort to bring down prices. So far, no consumer group has responded positively to his call.
With the financial crisis still unfolding and confidence failing, the bigger fear is the credit squeeze. Tight credit will have grave implications on consumer spending and investment activity, crippling the already slowing economy. The damage to the global economy will be deeper in 2009 with all major economies expected to slow down markedly.
Unfortunately, we are blaming Badawi for the problems and pressure him to step down early and to be replaced by the most capable one. The worst has yet to come, the result of UMNO general election will greatly affecting Malaysian as a whole.
![[persona-1.jpg]](http://1.bp.blogspot.com/_nRaTzJJHZ0w/STflE8U0rbI/AAAAAAAAABE/WF1SuY4lAjk/s1600/persona-1.jpg)
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