Tuesday, January 20, 2009

Us and them

Here's what Malaysia's main economic manager is quoted as saying just today in relation to the possible probability of a second stimulus package that may possibly deal with some probable areas that may or may not be possibly specifically dealing with some likely areas of the economy pending a probable series of studies on the unspecified probable areas of the economy in light of the possible probability of a downturn that has some possible probability of occurring in some way but which is not specific in impact in any material respect:

"We have to launch the first package and get it off the ground first, then we will come in with the second package.

"The features and focus might be slightly different. For example, how do we deal with companies that might be on the verge of retrenching their workers, what kind of assistance can the government give," he said, insisting the stimulus package would not take the form of bailouts but assistance.

(He) refused to delve into when or how large this second injection would be, merely stating that it would be "not too long" from now and that he would need to "look into our reserves and see."

(He) also said that a "Projects Management Unit" had been set up to ensure government agencies and ministries speed up the implementation of projects from funds allocated under the first package, which was announced by the DPM late last year.

"The first package is already fully allocated and now it is time to implement. If all of it is spent this year, it will result in a 1 per cent growth in GDP," he said, clarifying that this was part of the 3.5 per cent growth forecast by the government.

(He) added that while analysts differed in whether there is a recession or not, the second stimulus would ensure that Malaysia does not dip into recession.

Read the report and find out who is quoted above here.

Contrast the above with an extract of a statement made by the Ministry of Trade and Industry of a neighbouring country:

The Ministry of Trade and Industry (MTI) announced today that it expects the (blank) economy to grow between -2.0 per cent and 1.0 per cent in 2009, lower than the -1.0 per cent to 2.0 per cent range it had forecast in November 2008.

The global economic crisis has worsened since November, with sharp declines in global demand, trade and investments. According to the World Bank, global trade volume will decline by 2.1 per cent in 2009, the first contraction in 26 years. Since November, analysts have shaded down their growth forecast for the US, Europe and Japan by about one percentage point. The growth outlook for the regional economies has also deteriorated, with more economies now expected to register negative or flat growth next year.

These developments will affect the sectors in the (blank) economy that rely on the movement of goods and services in the region, such as the wholesale & retail sector and the transport & storage sector. Manufacturing will be weighed down by falling demand in the developed economies, while financial services will see a sharp slowdown reflecting weak financial markets and credit growth. The slowdown in these sectors will spread to the domestically-oriented segments of the economy, such as property, retail, and business services.

Advance GDP Estimates for Fourth Quarter 2008

The weaker prognosis for the (blank) economy in 2009 is also based on the sharp contraction seen in the fourth quarter of 2008. Advance estimates[1] show that gross domestic product (GDP) in the fourth quarter contracted by 2.6 per cent in real terms over the same period in 2007, following the decline of 0.3 per cent in the preceding quarter. On a seasonally adjusted, annualised quarter-on-quarter basis, real GDP fell by 12.5 per cent, compared to a decline of 5.4 per cent in the third quarter of 2008.

Go to the Official Website of that country's Ministry of Trade and Industry by clicking here.

Read also that country's Minister's oral reply to a question on the economy in the legislature as extracted at the same Official Website here. They just revised their GDP contraction further downwards from negative 2.0% to negative 5%.

*Sigh* Malaysia desperately needs qualified economic managers to head the economic ministries such as Finance, International Trade and Industry, Domestic Trade, Transport, etc.


walla said...

"If all of it is spent this year, it will result in a 1 per cent growth in GDP".....

If spending just RM7 billion can result in a one percent growth in our GDP, we must be sitting on the world's greatest secret weapon to combat the global financial crisis. A multiplier effect rippling faster than a ponzi scheme.

Or, on the other hand, it could be that we have a very small GDP.

Or, perhaps it's the other way around. Namely, our ringgit is big.

Come to think of it, why don't they spend ten times that this year and take our growth rate to stratospheric levels?

Which comes to what should be said - that Ku Li's recent speech is arguably the most important of all speeches ever made in the history of this country. The blogger's focus on it is thus quite salutary. However it is hard to imagine what was offered as solutions could be achieved given the tight situations in banks, markets, and even friendly backing countries. Even the suggestion of a home for everyone can't stop the question of how people are going to service their housing loans if they don't have jobs.

So with the additional specter that part of our EPF will be used to PFI another airstrip under opaque terms, we are thus left with our foreign reserves which can but fund a year's imports. What if the global crisis settles down longer than a year and people don't want to buy our goods?

Everything that has been said and argued in blogs around here since five years back has turned out more than prescient. We are indeed hollowing out. Let's hope there are some bright and energetic sparks around to prevent us from turning into another sleepy hollow.

Raison D'etre said...

Good one.

Blomberg reports Singapore budget would be unveiled tomorrow "to speed up aid to companies and minimize job cuts" .

Swift responses is what we are never going to get with laggards looking at enriching friends, families and girlfriends and boyfriends' coffers like we have here.

Who will save us?