Friday, October 15, 2010

2011 Budget - Towards a High Income Nation.


Can't we manufacture utility equipments like these?

Everything looks so rosy and promising in the 2011 budget. While listening to the PM's speech proposing the budget, we can hear our Parliamentarians banging their desks repeatedly with glee. All Menteri Besar's seem to be very happy and full of praises for the budget ( or PM?). But nothing in the Press (at least for today) from the MBs from Pakatan Rakyat with the exception of Kedah if I'm not mistaken. All praises and kudos.

I'm as happy as everyone else about the budget, about what it promises. The biggest raise in salary and allowances (in aggregate terms) perhaps is for the Chairmen of JKKKKs and Village Heads (Ketua Kampung) and the Tok Batin.. Almost a 100% increase (double the amount) and the allowance for each meeting is raised to RM50 or so. Ten meetings would give an allowance of RM500 which added to the salary of RM800+ would give a total of about RM1300. That's a whopper and how many thousands of them do we have in the country? But with the increase in the number of small village projects triggered by the Government Incentive Package of RM67 billion, the spill over from the little little projects which are given to the villages can amount to quite a fortune. That is even more income-boosting than the allowances.

With a rise in the income of people within a nation, the obvious danger is INFLATION. The budget says it is expected to increase to 4% and aside from the launching of a Website where consumers can report on any matter relating to the prices and availability of consumers goods, the budget is silent on what steps are being taken by government to curb spiralling prices. One needs only to check on the prices of their teh tarik, nasi lemak, roti canai, and many other food items in the menu of their favorite restaurants to see the changes in price. Go to a retail shop or store with RM50 and see what you can buy. You'll get more if you go to a supermarket.

With the budget going into trillions, the basket of goods that RM10 can buy in Malaysia seem to shrink although the parity value of the ringgit seems to stay or even go up. I use an RM10 measure for RM1 is incapable of buying even a loaf of bread , a nasi bungkusor a newspaper. Higher income doesn't mean much if it can buy less than now. It will just be a money illusion.

Another significant fact mentioned in the budget is that while export goes up by 22%, import increases by 28%. This seems to spell a negative trade balance. Are we buying too many things from outside with the import of capital goods rising by 18%? Aside from buying heavy equipment can't we manufacture more of the things we need? What happens to the policy of import substitution? If we're to transform the economy of the nation, let's manufacture many more of the things that Malaysians need rather than import them. With multitudinous housing projects springing up in the country we need a big number of motorized lawn mowers, small ones that we can ride on. Can't this great country manufacture that? Now. even the the swinging-blade type must be imported!

I think there're so many things that Malaysia should produce itself. Stop depending too much on foreign import. Unless the number of factories increase dramatically, how are we going to employ the increasing number of skilled and better educated manpower that we want to produce. The market demand for them must be stepped up for only that will ensure that they will be employed at a higher salary.

11 comments:

Al-Manar said...

I have ceased following the good promised by budgets. Fishermen are fishermen, dwindling catch year after year, increasing number of births outside wedlock, mat rempits making all the noise night after night outside my house, etc etc. I earn no salary, nor any pension. Running my car costs higher and higher. I only breathe free air, and even that is often polluted.

kaykuala said...

Akhi Norzah,
A high income nation would result from contributions from a high degree of industrialization. It could mean heavy industries or a myriad of smaller but value-added industries contributing to the whole. A start was made with the Heavy Industries Corporation of Malaysia Berhad (HICOM ) However so far it is only confined to car manufacturing and distribution. It could have included a shipping industry for instance. It should have created spin-offs of many smaller value-added industries. PM Mahathir must have hoped it could even have triggered off a higher multiplier effect of other types of industries ( aside from just those supporting the car industry) but it fell short (partly following the adverse aftermath of the 1997 economic meltdown ) Otherwise what you Akhi had lamented ( why small industries like your lawn mower manufacturers are not there? ) could have happened as a natural development!
With PM Najib’s ideas, hopefully it could provide a jumpstart. With a budget going into millions and trillions somehow I get overwhelmed. There are mega projects now to push towards a high income nation. The big picture needs to be seen and understood. I wonder if most people could see it!

norzah said...

Dear Pakcik Al-Manar, while the leaders and the nation talk about modernization and progress, we all have our skepticism. Many things seem not progressing but regressing, depending on how you look at it. I spend a lot of time going back alone to my kampung clearing up the compound and and inhaling the nostalgic breeze. I only have the wonderful memories of yesteryear to cheer me up for the modern life seems to be going round in circle. Most of the problems in administration and governance I have seen before and helped our former leaders to solve. Let's enjoy our golden years in peace but nothing wrong in throwing our views to the wind, hehehe.

norzah said...

Akhi Kaykuala, I share your hope in the mega projects
that the government has drawn up. But the dependency on foreign investment with no quota for the Malays, the decision to let Malaysians compete on equal terms for the benefits without consideration for their current handicaps ( read Che Det about this), and the obsession of the young Malays with entertainment( jom heboh, akademi fantasi, drama cinta dan kawin,kareoke, motor racing, mat rampiting etc) leaves me very dejected. When the Malays failed to take full advantage of the smaller projects, hiw do you expect them to get the best out of the mega projects? Even the crumbs would be good enough!
I'm afraid of waking up one day to see that all the
commercial centers in Malaysia are owned by foreigners and the Ah Kows, while the Malays do business in the street corners. Jusr imagine when Kg Baru is opened up to the rich investors. The young Malay owners if land and property will just be too eager to sell at exorbintant prices and become rich for a year or two. Then go back to the hills after their wealth is spent on entertainment.
The mega projects if not properly controlled and managed can spell the mega sale of the country's
assets to foreighners.
Shall we just keep our fingers crossed?

abdulhalimshah said...

Akhi Norzah,
We have heard all these Mega and Omega (if this could be used without copyright infringement) projects bandied about. During Pak Lah's time we were told about Northern, Southern,Eastern and Sabah-Sarawak Corridors, but it seemed to have gone into obsolescence. What high income are we talking about if bread will cost RM10 and Teh Tarik will cost RM5? I rather we remain a middle-income country but with zero or just below 2% inflation. It is the quality of life that needed to be upgraded. What we need are not Omega Projects, but small projects that can be distributed to all who are in the small amd medium scale industries. Gigantic projects will only be benefitting suppliers from overseas because with all the hi-tech and Green Technologies that we are going to implement may not be available locally.
What we need are more Skills Training Centres where the unemployed can go for applied skills training to be absorbed by the small and medium scale industries. In countries like Japan and Korea, it is this sector which contributes most to the economy. We must not fall into the trap of the Gulf countries where they go and spend their money down the drain by building Mega Projects but their people are still in abject poverty.

norzah said...

Touche, you hit the nail right on the head, Akhi. But our leaders seemed to be obsessed with grand projects, big investment, big money, big commission.1% commission dari project RM5 billion sudah berapa?PNB buat untung bukan main banyak. Boleh finance pembinaan Menara Warisan tanpa bantuan Kerajaan, Tapi pulangan ( tak boleh sebut bunga!) yang dibayar kepada pemegang saham bersap sen sangat. Banyak Syarikat gergasi GLC kerugian gergasi , terus diambil alih oleh kerajaan. Rakyat yang subsidaiz badan berkanun yang buat hutang besar kerana dipimpim oleh politikus.

So.what can we do Akhi? Shall we just keep mum and let siluncai terjun dengan labu-labunya. Kalau ramai siluncai lemas, si acailah yang akan berenang-renang ketepian.

abdulhalimshah said...

Akhi Norzah,
The only thing we can do is to spread the message to all the younger generation who are going to form more than 70% of the voters in time to come to wake up to reality and throw out these suckers. Our role now is that of the elders, giving advice where it is needed most.

norzah said...

Throw these suckers out in the next GE, Akhi. How do we know thatbthose who take over are any better?

kaykuala said...

Akhi Norzah,
Precisely, how do we know they are any better? Perak fell when 'they' got entangled in corrupt practices. In Selangor, we only knew later that 'they' were dishing out support letters and getting the 'seedy' businesses ( read: massage parlours, karaoke lounges ) approved as though there's no tomorrow. It was from day 1 itself. Of course before that were the 'sand thefts' and TBH's cases.
Look at their branch elections, fist fights,flying chairs, and 'back stabbings. I'm not surprised 'saucy stories' would make their rounds in the run-up to their elections now awaited.
And in Penang it is as though it is a permanent govt, all theirs to keep. They couldn't care less of Buah Pala or Balik Pulau ( and meekly accepted by their coalition partners )
Kedah and Kelantan have their own brand of going-ons which are milder but still smells ( timber concessions, travel tickets)
Sadly these were all facts as reported and not allegations ( where some are being pursued in court)

norzah said...

Very depressing facts, Akhi Kaykuala, lleaving us with little to choose from. When Barisan has its dark corners and Pakatan shows all the spots that could be
hazardous to health whi di we go for in the next GE. Is that the reason why so many Malays do not register as voters? I wonder.

norzah said...

Correcrion: which way do we go for the next GE?