My Malaysia (for 2009): Open Economy.. Good or Bad???


Update @ 11.08am, 23rd December 2009:

Wenger wrote (and followed by my comment):

Tuesday, December 22, 2009

Dear Stephen Tetteh

The phrase “Tin Pot African Nation” is not to be taken that all countries in Africa are dysfunctional.

As I have clearly shown, countries like Botswana, Gabon and Libya are all doing very well. The phrase was borrowed from some movie I had watched – I think it was Wag The Dog.

Judge Wenger is a good friend of all African Nations that embrace democracy and do not practice genocide. Countries that practice ethnic cleansing are Tin Pot Nations regardless whether Malaysian business men do business there or not.

“African countries are happy the way they are and it’s Malaysians who rather go there to cheat them by imposing themselves on them to be majority on boards while they hold the minority shares in African companies and such things are rather not talked about. ”

Why complain about it.

Take them to court!

Posted by Judge Wenger Khairy at 6:15 PM
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2 comments:

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December 22, 2009 6:32 PM

ondastreet said…

Yes, Wenger, take him to court and provide the evidence.. It’s time for you to shine, bro!

by the way.. you still dwelling on per Capita Income, GDP.. but not on inflation rate, unemployment rate..

perhaps a snipets from the past (Source: https://ondastreet.wordpress.com/2008/12/22/22-years-of-bull/ )

– Infaltion rate:

“our inflation rate is way lower than those two countries as taken by example by WJK. Why I take inflation rate as one of important facts to look at. It is due to the fact that inflation is a rise in the general level of prices of goods and services in an economy over a period of time. In year 2000, the inflation rate was 4.8% while Bostwana – 12.0% and Gabon – 28.1%. Interesting indeed. According to theodora , in 2003, we were still lower than them. If these analysis to be taken into account, somehow, I beg to differ.”

– Unemployment rate:

“Now, let us look unemployment rate according to United Nations, Bostwana shows a remarkable 24% of unemployment rate (as at 2003!). As for Gabon, the latest data was in 1993, for 18% with a footnote indicating the info was for age 10 years old and above. Malaysia? 4% of unemployment rate as reported in 2004. To those who have query on why I relate unemployment rate to economics strength, Valentino Piana describes as “Economic losses from unemployment are large, since they relate to all goods and services that could be produced by the unemployed, to income losses for the unemployed household, to consumption and employment losses caused by reduced demand of the latter, to a wide range of social pathologies and health diseases”. So, in other words, it is also a determining factor. Again, I beg to differ.”

– Social background:

“Considering the countries taken by example in WJK’s argument, please find the background of the countries mentioned here and here. He has taken not quite good examples as comparison to Malaysia. Socially, Bostwana has the second highest rate in the world for AIDS and Gabon – In 1997, an IMF mission to Gabon criticized the government for overspending on off-budget items, overborrowing from the central bank, and slipping on its schedule for privatization and administrative reform. With all due respect, do you want Malaysia to improve in Per Capita and having these? I will certainly not.”

Or what just matter to you is just what’s coming into pocket only?

~ OnDaStreet 

December 22, 2009 6:59 PM

 

Original Article:

I came across an article written in Harakahdaily few days ago, which KS Jomo criticised DS Najib’s Open Economy Policy. One of the items that caught my attention is:

Jomo (gambar) berkata sedemikian semasa memberi syarahan yang bertajuk “adakah malaysia menggambil iktibar dari kesan krisis  ekonomi yang lepas”, yang berlangsung di Hotel Singgahsana  di sini malam semalam.

Program tersebut dianggarkan dihadiri seramai 200 orang. Ia dianjurkan oleh Gerak Budaya dan Pusat Maklumat Strategik dan Pembangunan Penyelidikan (SIRD). Penganjur bersama adalah Youth4 Change.

Jomo berkata dasar tersebut mungkin disokong oleh golongan  berpendapatan kelas pertengahan yang melabur di dalam pasaran saham tetapi menurutnya dasar tersebut tidak menyumbang kepada “ekonomi sebenar”.

Beliau memberi contoh kejayaan syarikat-syarikat tempatan dalam memproses minyak sawit mentah kepada minyak sawit yang telah ditapis sebagai satu kejayaan yang menyumbang kepada ekonomi sebenar  negara ini.

Katanya lagi, minyak sawit untuk kegunaan memasak keluaran Malaysia kini tidak “menyebabkan siling dapur berjelaga”.

“Inilah contoh-contoh kejayaan kejuruteraan Malaysia membawa perubahan kepada ekonomi (sebenar),” tambahnya lagi.

Jomo berkata perubahan ke arah dasar ekonomi terbuka kini adalah hasil kerja para pelobi yang bergerak aktif diperingkat antarabangsa.

Katanya usaha-usaha tersebut amat giat dijalankan sehingga dasar-dasar yang bertujuan untuk melindungi kepentingan negara seperti yang telah diamalkan semasa pemerintahan bekas Perdana Menteri Tun Dr  Mahathir Mohamad “dicampak begitu sahaja”.

Well, it sounds a little bit different with my dear friend, Wenger J Khairy when he wrote about economics. He always give his readers very colourful graphs and charts, in the same time ridiculing Tun Dr Mahathir (who I also consider still a human). One of his articles was this, talking about World Bank and how bad is Malaysia and how good he is when it comes to economics. In fact wishing that if Haji Khairy would consider him as Finance Minister in the event Haji Khairy Jamaluddin is the Prime Minister. Maybe just a joke.

[ODS Note: For the record, I’ve encountered his article on economics once, entitled “22 years of bull?” (which as a response to his article which he has deleted his blog for unknown reason). There he tried to ridiculed Tun Dr Mahathir by comparing Malaysia with Gabon and Bostwana (to Gabonese and Bostwanian, apologies in advance).]

Based on these two opinions (one given in Harakah, and one given in his blog writings), I can’t help my  mind to wonder off. I know there’s no absolute approach of doing things, which one might applicable to one situation, which may not be applicable the other time around. Like what happened in 1997-98 crisis. Many criticize and support. Whatever it was, the move made by Malaysia was largely criticized at first. Even some of the approaches taken were interestingly studied. For example the Danaharta and the currency pegging. However, at the very least we don’t suffer riots due to economic reason. By far, we don’t need to pay 1kg of rice for RM10!!! 

In all, what I can summarize for the approach taken back in 1998, there are good and bad.. but for sure KJ supporters do not appreciate the steps taken due to hatred to Tun Dr Mahathir and family (aiayaya.. grow up lah. KJ don’t get minister post doesn’t mean he does not have any job. Carry out the responsibility as Youth Chief with excellence, and I believe DS Najib will be “forced” to take him in. At the very least people would not say Pemudi UMNO.)

So, for this around, since DS Najib’s announcements on his appraoches for Malaysian Economics, we have heard various news, opinions and blogs on DS Najib’s approach. Some oppose, some agreed and some wait and see. From my point of view, this is normal, even for the criticising part. Only what make the difference is, is the critic (good or bad) done in a manner that is not clouded or driven by hatred? Is the critic done in a manner of professional and developing kind of critics?

For this, I’ve read through some that is available on the net for our readings. For example, we need to know, what is “Open Economy”?

According to economywatch.com, Open Economy is defined as “an economy, which is free to trade with the other economies of different countries. This is in sharp contrast with the closed economy where people are not allowed to trade with other countries. An open economy is a field, which deals in macroeconomic phenomena like exchange rates, balance of trade, tariffs, subsidies, and import quotas. An open economy is advantageous because people can trade in goods and services; indulge in business with the international arena at large. This increases the scope of trade and business leading to profitable earnings.”

It also give the advantages of Open Economy:

There are quite a few advantages of an open economy. They are:

  • The primary advantage is that the consumers can choose from a large variety of goods.
  • An open economy increases the opportunity of direct foreign investment
  • Another benefit of an open economy is that it is more flexible.
  • An open economy has a greater chance of adjusting itself with the changes taking place in world economy.
    The basic model of an open economy is given below:
    Y= Cd + Id + Gd + (EX-IM)
    Where Y stands for the income level, Cd stands for the consumption of domestic goods and services by the consumers, Id stands for the investment on domestic goods and services, Gd stands for government expenditure in domestic goods and services. Net Export is equal to (EX-IM) and is occasionally termed as NX.Most of the countries in the world follow the open economy since the world has become a global village.
  • The question is.. are we benefiting from Open Economy?

    An article in Malaysiakini brought us an opinion in form of a question. Some of the highlights for our consideration:

    • Competing with outside products/ services:

    But once the market is opened up, I would have no choice but to source for better parts and better designs if I want to compete with the imports. I would have no choice but to make my company more efficient. In doing so, my products and services improve and if they can compete with the imports, they will definitely be good enough for the export market.

    I will find that now my improved fans can have a much bigger market than before. The higher revenues earned will enable me to move up to making higher end products such as air-conditioners, fridges and so on. That was in fact how many of our local electrical companies went through. Of course, if I have adopted a tidak apa attitude when the market is opened up and not improved myself, my fan factory would not have stood a chance, and it would have folded up.

    • Adaptability and cost factor:

    US and the rest of the developed nations have to be more innovative and move up to a higher level because the lower rungs of the ladders are fast being occupied by China and the little dragons and tigers. From a mainly off-shore manufacturing centre, China has now moved up to designing products. In the not so distant future, I am certain it will start to invent ideas and move to the forefront of technology

    • People factor (which Wenger J khairy failed to understand when I asked him what about literacy rate and unemployment rate):

    If the people are hardworking and adaptive, willing to accept new ideas and learn, then an open economy will stimulate the country to grow faster. If on the other hand, the people have a ‘tidak apa’ attitude, then they may find themselves overwhelmed by the external forces and become marginalised. Many countries are afraid of opening up precisely because the leaders are not sure whether their people in certain sectors are ready.

    * The article in Malaysiakini was written by DR HSU DAR REN a medical doctor with interest in politics and socio-economic issues. He believes in the preservation of nature and our green environment.

    An article in The Edge Malaysia back in July 2009 gave a mid-year review. Most of the points are anticipating prospects and firmer recovery.

    With the year 2010 just few days away.. by far, how much is your pocket aching? As far as I am concerned, laymen don’t really bother with all these bombastic datas and information. You can tell all these graphs and statistics, but what matter to the people on the street is how the approach taken by government can ease up their economic burden, how can the jobless can be employed and how they can improve their life (not just about the money, education, stability and peaceful life).

    What say you?

    p/s: for interesting reading on economics covered by a blogger, you can read this blog, Economics Malaysia.

    4 thoughts on “My Malaysia (for 2009): Open Economy.. Good or Bad???

    1. You know, I have to tell you, I really enjoy this blog and the insight from everyone who participates. I find it to be refreshing and very informative. I wish there were more blogs like it. Anyway, I felt it was about time I posted, I�ve spent most of my time here just lurking and reading, but today for some reason I just felt compelled to say this.

      ODS: Thank you for your comment.🙂

    2. what WJK knows about economics? bullshit. he knows nothing.

      ODS: He do know something.. but when driven by hatred, he does look ridiculous.🙂

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