Prime Minister Datuk Seri Najib Razak has “lived up to expectations”. He personally announced that the gross domestic product (GDP) for the fourth quarter of last year has grown by 4.5 per cent. It was the first good news after a series of negative events.
The GDP was expected to grow in the fourth quarter but the 4.5 per cent growth has exceeded the expectations. It is good to have such achievements but it will turn bad if we are over optimistic.
Improved external situation was the main factor for the high growth. Advanced countries have filled up inventories to increase imports. Thus, many countries were able to walk out from the economic shrink, such as the United States achieved growth by 5.7 per cent, while Japan achieved 4.6 per cent of growth, Vietnam achieved 6.5 per cent and Singapore achieved 4 per cent.
The second factor would be the relatively low basis. Malaysia achieved only 0.1 per cent of growth in the fourth quarter of 2008.
Therefore, in addition to excitement, we must maintain a certain level of rationality as the world economy is not yet completely out of the shadows, particularly the outbreak of debt crisis in European countries. Consistency is the most pragmatic way to face the unknown future.
If the government is going to relax as it thinks that the economy has recovered and strong growth is expected this year, particularly if it gives up or slows down the pace of opening up when the new economic model is introduced in March, it will be impossible to attract foreign investment and talents. Once the world economy falls into the second recession and domestic demand remains weak, the difficulties will be exacerbated.
The government has to face many economic challenges, including the sharp drop in treasury income and increasing burden. How are they going to stimulate the economy through public spending? The government has been cutting subsidies while power tariffs and fuel prices will be increased. Together with the increase of tolls and housing prices, which are expected to increase by 10 per cent, the people’s purchasing power will fall.
It is estimated that if the government cuts subsidies by RM4 billion this year, the public’s purchasing power is expected to fall RM2.9 billion. The people’s misery index will increase as the government has failed to control prices while the incomes of most Malaysians are low.
Bank Negara is expected to raise interest rates in March and it will further increase the burden on loan bearers. Inflation has come back before the people’s incomes have been increased. It will be useless no matter how nice the economic data looks and the vision of becoming a high-income country will only be castles in the air.
The country’s economy is also facing a number of weaknesses, such as the dropping foreign investment and capital outflow. Foreign investment has fallen by 48 per cent last year. From 2007 to Sept 2009, Malaysian enterprises had invested RM102 billion abroad, which was 1.7 times of foreign investment received. The Ringgit exchange rate has also been continuously falling. All of these show that domestic and foreign enterprises are lack of confidence.
In the development of knowledge-based economy, the public has not yet seen any concrete plan from the government. If the government is unable to develop high-technology and innovative areas, the economic structural weaknesses will lead to a slower economic pace.
The people are still unable to feel the vigorous economic momentum of the Year of the Tiger. After all, the high-growth economic data will only play some effects after a period of at least six months.
During the announcement of the economic transformation plan in March, Najib should put forward more opening strategies that can boost confidence and open up new growth areas in order to make the economy shine in the Year of the Tiger. — mysinchew
[[[ *** RESPONSE *** ]]]
Prime Minister Datuk Seri Najib Razak has NOT “lived up to expectations”, nor is it his duty to ‘put forward more opening strategies’. Rather it is the 2nd Finance Minister (why is the PM holding so many Ministries??? Conflict of interest anyone???) who has done the former and has to do the latter.
Under PM Najib’s purview should appropriately be matters of national importance, not the economy. He has not yet effected :
1) Freedom from Apartheid/Fascism
2) Freedom from Religious-Persecution/Religious-Supremacy.
3) Equality for all ethnicities and faiths in all aspects of policy, Law and Constitution.
These are inalienable rights of all Human Beings on this planet. How about EQUALITY Mr. Prime Minister?