Monday, October 27, 2014

Spend, spend, spend….

There's a belief in the economic circle that the more money a government spends, the faster will development occurs. Put more money in people's pocket and let them spend it lavishly. Demand for consumer goods goes up, the market expands and the economy will boom.

How wonderful. If that is true the government can then just allocate billions here and billions there, create mega projects here and mega projects there, approve hundreds of millions for this and that project at the whims and fancies of the leaders to please their supporters.Development gets going, the government gets more support,
people are happy spending money, and if you belong to the low income group you can get cash assistance from the government every now and them.
can everyone lives like this?
Question is: how does government get the money to spend? Tax the rich and kill the geese that lay the golden eggs, pull in foreign capitals by opening wide the doors of economic opportunities in the country, give foreign investors as much freedom as possible to take away the profits they make in the country, sell the assets of the country as much as possible, borrow money by selling bonds and debentures, make liberal use of deficit budgeting, or what?

Will the economy of the country really boom or will it boomerang? Shouldn't a country spend only as much money as it can afford at any time and ensure that the immediate needs of country and people be taken care of first rather than embark on very ambitious programs to become a rich and developed nation as quickly as possible? There's a Malay saying: "Mau kaya cepat" (to get rich quickly), and it leads to disaster. There is also the possibility of achieving an allusion of wealth, like what the credit cards can give to the middle-income wage earner. Only when the cash-flow takes a real dip will the actual damage be known.

Malaysians today seem to be really enjoying a generous budget for the year 2015 with a lot of tax cut and increases in cash assistance for the low income group. Shopping Malls and business centres everywhere seem to be
always full of people and the roads are jammed with luxurious cars. Heavy cranes and mechanical equipment are seen everywhere in the towns and cities constructing new infrastructural facilities and buildings to hasten the paste of development and modernisation.
this still exists
Yet…..there are gripes and groans of fear and disappointment about government spending. Despite announcements on the influx of foreign investment in the country the boom it brings are also having some boomerang effects. Prices of consumer goods are going up as usual and the price of condominiums and semi-D houses or bungalows are
going into millions. One can foresee the administrators and servicemen going back to the villages to build or purchase their homes for the towns and cities are becoming too expensive for them. Only the rich businessmen and political leaders can afford to remain in the cities.
candidate for a welfare home

One wonders how long the spend, spend, spend, approach to the economic development of the country can continue.
The earlier we reevaluate the spending capacity of the nation as against its income and liabilities, and give the welfare of the people more emphasis than economic development per se, the better.

Tuesday, October 21, 2014

Happy Deepavali to Our Hindu Friends

In general, Diwali (or Deepavali) signifies the triumph of good over evil, of righteousness over treachery, of truth over falsehood, and of light over darkness. What Dewali signifies seems to cover the major areas of concern that the whole world faces today. Evil ( the dark forces), treachery (design and intrigues), falsehood (misinformation and disinformation), and the "darkness" which is not ignorance but self-pride, superiority complex and the holier-than-thou attitude casts over our worldview and self-awareness, are the major causes of friction and divisiveness in the world today.
lets light up our hearts

I think we all can learn more from the spirit of Depavali in contrast to what we can learn from the other major festivals of various religions. Each religious festival has of course its own special significance and spiritual value but Deepavali seems to cover more areas of human concern other than the festivities, at least in theory. The pujaas and prayers as I understand it, really cover all aspects of human knowledge and relationship. Other than focusing on the triumph of good over evil, righteousness over treachery, truth over falsehood and light over darkness, they also cover the relationship between parents and children, husbands and wives, brothers and sisters - with a day in the week-long celebration to promote such relationship. I wonder if it also includes a prayer for humaneness, justice and world peace.
spread love and brotherhood

As a multiracial country, we celebrate Deepavali together with our friends, like other festivals including Aidil Fitri/Adil Adha, Chinese New Year, Christmas, Gawai etc. Visits from house to house no longer seem to be the vogue nowadays in preference to the "open house"celebration which may take place at the hotels, clubs and community centres. Even the greeting cards have all but disappeared in preference to greetings and well-wishes sent through the Facebook, SMS, Chatbox etc. This development makes the spreading of the festive mood, spirit and conviviality faster, more pervasive and hopefully more intensive.
let mother earth thrive

We wish all our Hindu friends happy Deepavali and may the festival of lights help to enlighten us all on the ultimate purpose of life on this earth and not be intoxicated by its fleeting ..material and physical pleasures. More importantly, let the leaders of the world learn a little from what is meant by the triumph of good over evil, righteousness over treachery (and deceits), of truth over falsehood, and light over darkness )of the deceptive kind). Let us light the candle of love and compassion in our hearts and cease the warring and killing of our own kind in the pursuit of our own convictions and desires.

Wednesday, October 8, 2014

Rubber price down...

Although Oil palm has taken over as the primary product of the country, rubber is still the main source of income for many Felda settlers and rubber smallholders in Malaysia. They used to enjoy a very comfortable life when the price was pretty high, even for the untreated latex. When the price of rubber was at its peak, even government servants like policemen and teachers left their job to tap rubber.
the oldest scene in Malaysia

Now the price of rubber has dropped. As reported by Rosli Zakaria of the New Straits Times (October 7, Business Times p. B7:
"At the current price of less than RM2 per kg it is realistic enough to say that many of the 500,000 smallholders, now earn less than RM700 a north and they have fallen under the poverty line. (Malaysia's poverty line is pegged at RM763 a month.)

"The are rubber smallholders living in rural areas, who were onces the backbone of the Malaysia economy. There is no end in sight for their woes unless ways are found to increase the demand and use of natural rubber."

Many smallholders have hung up their rubber-tapping knives to earn money from other small business activities. With the monsoon around the corner there is no hope for a rise in rubber price until March next year. Even factories which used to bus raw latex are closing down and laying off workers.
source of income for men

That's as bleak a scenario as it can be when the country is striving to become a high income nation. The price of petrol has just been increased by 20 sen per litter and the prices of other consumer goods are expected to do the same as in previous case of price hikes for patrol, including the bus fares for school-going children. To top the spiralling prices is that of homes and shophouses which are fast approaching the million mark in the case of the former while the prices of the letter will certainly drive the bumiputeras back to the villages.
and women too

What is the government doing to jack up the price of rubber? We used to hear of efforts by the Ministry of Primary Industries and that of Domestic Trade and Consumerism in previous years to hold discussions with world authorities on rubber and palm oil prices, to keep the prices at a reasonable level to ensure sustained production. We hear nothing of such efforts now except to control the prices of essential consumer goods, which in many cases are not effective enough, and giving alms (the so-called BRIM) to those earning an income of less than RM3000 a month.

Are we going to keep beating our breasts to say that we are going to become a developed nation soon with millions of people still waiting for the next instalment of BRIM to help out with their insufficient income. Are we still proud to say that our export has increased by the billions when the national debts keep rising and the import bill is eating away at our increased productivity?

The rubber smallholders used to be the backbone of our economy.Is nothing to be done to keep them as such because the backbone is now based on commerce and trade which the rural population has no say in? What's going to happen to the half a million rubber smallholders?