Ha…ha… bloody HA. Malaysia apparently is – or is it “was”? – “insulated” from the global economics meltdown. Like, awesome dood! While the rest of the world – America, Japan and Germany included – were knocked out silly by the meltdown, Malaysia was smiling her way to an economics safety vault. These were respectively the biggest and 2nd biggest economy in the world as well as the biggest economy in Europe; and they were in trouble. But no, Malaysia is insulated because of our “diversified economy and strong foundations.” And guess what? Our GDP growth next year was loftily projected to be 4.5%.
Despite many economists saying that the Malaysian Finance Ministry is living in Dreamland, we continue our usual repeat therapy. For the uninitiated, “repeat therapy” is a process where we are all programmed to believe that everything which we repeatedly say will actually happen if we repeat it often enough. Abdullah Ahmad Badawi pioneered this mind technology. Remember when he repeatedly said “I am in control”? Or when he repeatedly chanted “I will be fair”? Yes. Things like that. And so, if we repeat “Malaysia’s economy is insulated” many many times, than our economy might just, indeed, be insulated. Now. Repeat after me. “Cow dung.”
The truth is the world economy is so bad and it is going to hit us like one big bad fiery meteor from hell. Just imagine. The International Labour Organisation projects that 23 million people are going to lose their jobs in Asia this year! (see here). 1% of that is 230000. Even if Malaysia “contributes” 0.5% of that, it would mean 115,000 Malaysians would lose their jobs! And we are insulated?
What about the 300,000 odd Malaysians who are now working in Singapore? If even 10% of them are retrenched, that would mean 30,000 people without jobs. Add to that the reduction of working days due to production cut-off, cancellation of over-time, forced holiday and leave, as well as bonus and salary increase freeze, – have we ever thought what that would do to our economy?
And we are stimulated? GDP of 4.5%? Good God! Just this morning, the radio announced that Citibank Group had forecasted that our GDP will in fact shrink by 1.5% this year! That means we will be in recession. The big R is here. But remember what Abdullah and Nor Mohamad said earlier this year? No, we will not be in a recession. Now, please repeat that folks. Repeat it until you sleep.
All the numbers are slowly creeping out now. Malaysia’s export has shrunk. In December 2008 alone, our export shrunk to 46 billion ringgit, which represents a 14.9% decline year on year (see here). Our biggest trading partner, America, is in a financial black hole. Japan, our traditional trading partner is seeing their consumer index dipping southward at an alarming rate. And we are apparently, insulated. Which makes me wonder what magical economics inoculations have Malaysia been injected with all this while!
Let me tell you about the economics in normal, easy to understand terms.
Yes. We all would love them big. But the truth is, they are not naturally big. Well, most of the time, that is. To make the economy big, we would have to do something to it. We just cannot sit around looking at it and expect it to be big. No. That wouldn’t do. We have to bring them to the operating table, cut them open and inject put some silicon, prop them up, and stitch them up together again. Then they will be big.
But no, we cannot just do that. We have to look at them first. Determine what is wrong with them. What is not quite right with them. Go to the drawing board and plan. We would have to draw out the tits that we would want. The ones that we would love to have. Not any old tits which are big. This would entail research and studies. It would entail thoughts and plans. We don’t just inject and inject and inject! And stimulate and stimulate and stimulate. Otherwise we would have tits which are monstrous, ugly, and totally useless!
Just because big is good, don’t think that the bigger they are, the better they will be. This is why China had to actually control its economic growth. They make the growth hover at around 8%-10%. Sometimes it hits 11%. But there must be control. Why? Because if we do not control the growth, the economy would grow too fast and a bubble effect would ensue. The bubble then, when it is too big, like tits, would burst! When it bursts, it would bring down with it everything else.
This is very important. Just imagine a 36FF on a 4’8″ body. Aiyoh! The economy must be looked at as a whole and not in minute little spots here and there. We have micro economics and macro economics. Both must complement each other. In a way, the micro policies must be optimised in order to support the macro ones.
We also must remember that the economy does not exist in a vacuum. The economy is just but a necessary element in a bigger circle consisting of the society as an entity. Towards this, politics too comes into the equation. Thus, the economy cannot be detached from its direct impact on social and political life. When planning the economy therefore, thoughts must be given its societal impact.
What for instance are we going to do about the people who lose their jobs? What about re-training? What about creating small business opportunities? Or new job skills? And have we thought of the rising criminal activities which are induced by economics uncertainties or difficulties? What about health problems afflicting the people due to the economics downturn? What about health care system? Are we going to sacrifice educations in favour of a quick financial gain elsewhere? And what are we going to do when all these turmoils are over? Back to the same old game? Or new games? If it is the latter, do we need new rules and regulations? Are we going to diversify in something else? New and uncharted economic territory?
Don’t just concentrate on the nipples! If the so called stimulus packages are going to be aimed at the construction industry, then we might as well continue to launch more and more tolled road projects, dig a big hole and jump into it! Just this morning I heard over the radio that Road Builders (a subsidiary of IJM) had been awarded the extension of a road by 12 kilometers immediately after the concession of the toll road it operates expires! Hmm… one expires and another one springs to life.
Okay, okay, I digress. Anyway, as I was saying, the stimulus plan must be wide ranging and holistic in nature. It mustn’t be a stop-gap measure. The act that we have to announce a second stimulus shows that the first one was insufficient and not well planned or thought out. We do not want a 3rd stimulus after this. Or a 4th one. There must be one holistic stimulus. Have we ever heard China launching a second stimulus in 4 months? Or Germany? Or wherever?
Our Government is in the habit of introducing stop-gap measures. While these may seem good at first go, problems will crop up time and time again if the root of it is not addressed once and for all. Any stimulus package must look at all angles. In particular, it must address all the questions raised in Lesson Three above.
Okay. I am going to stop here. Otherwise, I would have to start charging. After all, I am not insulated.