Wednesday, March 17, 2010

Perpetual issues rannging from their childrens academic financing to health care

I got this note from one of my readers and perhaps its a good point for me to sketch my views of the economy.

This is very much an off the cuff view. I had done some analysis of our economy, but to the extent that I would want to share it ( requires more time). So a lot of what I'm gonna say is my "ASSumption"

21st Century Economy
I think many people are still confused how on earth can we not be the masters of our economic destiny. After all when we were in school, we were kept bombarded with words like "Economic Miracle", "Tiger Economy" and "Malaysia Boleh." We so called "proudly" launched projects as diverse as building our own car to putting a man in space.

And by and large most Malaysians do work hard. They wake up early and come home late. Furthermore, we don't have strikes and pickets which the "evil" west has.

To cap it off, Malaysians are savers. We are being told that we save a lot to the extent that sometimes our leaders have to encourage us to spend.

So then why should a person suddenly be forced to come out with a statement like that.

The answer is - We Have Always Been Told a Lie.

I think really what keeps me going is debunking these lies one by one. I stopped trusting the "lies" sprouted by a certain person the moment I began to see small holes appear. Later on these holes were so big you could drive an A380 through those.

People must realize one thing - the world has changed significantly over the last 20 years. In 1991, when the Cold War had just come to an end., Europe was still in sort of a mess as the ex-Soviet Bloc countries had to require massive restructuring to integrate into the European Union's market economy. At the same time, the Nikkei was something like 30,000, I believe the Yen Dollar was around 80 - 90 ¥ to the dollar.

What this means is that Japan was flush with "artificial wealth." Money poured easily into countries in the South East Asia, the certain person maintained a column in the Mainchi Shimbun or something like that, our currency was about RM 2.5 to the US dollar and life was going great.

But really, if you look at it, life was great because of all this foreign money coming into the country in terms of FDI. They propped up the stock market, they kept the Ringgit strong and they created jobs.

Now 20 years later, Japan is in this perpetual depression and the new money is not coming into Malaysia. It stopped coming in the moment we said "Capital Controls Rock" and refused to take a lot of hard restructuring required.

What is the hard restructuring?

I think at the very base it will require making people accountable for their actions. Today nobody is accountable for anything - and it seems some mysterious pool of money is created to support every single misadventure with the results being chalked to a learning experience.

Other restructuring involves thinsg like the Education system. The issue we face is that the "uneducated" are the ones making most of the noise when anybody suggests an improvement to the system. So the "uneducated" will shout and scream at the same time as our universities slip down the road.

The last issue has to do with the judiciary. I think recently a landmark case involving some property rites story was overturned. Great. Today we admit it was a mistake. But for the last 10-15 years, foreigners knew it was a mistake and found such kinds of decisions as adding to something called "country risk."

So there we have it. A culture not geared for accountability, a fiscal policy that praises "Capital Controls" over market based approach, endless digressions into other matters when discussing education performance and so this is the result.

The ringgit trading at 3.30 ish , FDI at record low levels, a cost of living increase that we all feel but which is denied by the CPI tracked by Bank Negara, low salaries and a GDP growth rate that really cannot make sense to the average man on the street.

Oh ya - our public sector debt at RM 522 billion. You will hear more about this.

How to Solve the Problem

All the things I have listed are national level problems. There is nothing an individual YB can do at the parliamentary level to solve this.

If I were elected PM tomorrow, this is what I will do to solve this issue

  1. Formulate and pass through a race relations act that sets in clear print what a person may or may not say or do and the punishment for breaking it. Once I do that, I will not need to worry as PM everytime somebody says something stupid. I'll just let the cops deal with it
  2. I will cut the civil service by 50%. I will offer all Civil Servants who are to be made redundant an option for some sort of work training/ re-education. I will fund this using a special fund of RM 50 billion specially for this purpose. I will put in place certain investments in setting up the infrastructure for business opportunities for those about to be axed. And it will be marked clearly "LAST CHANCE SALOON." This will save the Government approximately RM 20 billion a year.
  3. I will reassess personal and company tax declaration made in the last 7 years. I will check everybody whose name is registered as the owner of a car worth RM 150,000 and above or property worth RM 600,000. I will be able to raise a minimum of about RM 10 - 20 billion from this exercise.
  4. I will restructure all the VCs in the local universities to include only those who have had some significant contribution to academia. I will put a clear benchmark - improve the standing by 1 standard deviation form the base or have the contract not renewed. Technical University Education will be the a big priority. This will give the necessary talent to do the jobs of tomorrow.
  5. I, Prime Minister Wenger will lead a trade delegation to China and the UK. I should be able to raise approximately RM 200 billion per trip in terms of new FDI.
  6. I will restructure the health services to incorporate an element for a National Level Health Benefit Scheme. 
So thats how u solve the problem. QED. Vote Wenger for PM!


Anonymous said...

Mr Wenger
i'm that anon who commented earlier and where my comment were used as your topic header.
Now, i'm still a wee bit confused and hope you would take some time from your busy schedule to enlighten me.
If you become the PM, you said you would cut down the civil-service by 50%. And that you will set up a special purpose fund of RM50b to help them training and re-education. Now, where in the world will you be able to raise that much of a fund. Please dont tell me its from increased in tax revenue. Or worst from issuing of G Bonds. As you had mentioned, our public sector debt is around RM522b. We are also staring at a huge foreign borrowings.
Just to side-track, our PM has been 'kris'-crossing the nation and promising them funds by the million, the latest being BAM. Do we still have some cash left in the till?
If i am appointed the PM tomorrow, the first on my list would be to get back ALL the $$$ the corrupt scoundrel has robbed the from country. You'll be surprised at the amount of money you can collect. And you can bet your last ringgit, top of my list would be mr D, one of the trusted lieutenant of Tun M.
So i'm really counting on KJ to do this!!!!

kutu malaya

Wenger J. Khairy said...

If the Government was raising RM 50 billion as a defined settlement of civil service wages it can certainly work. yes our debt rating will get knocked for a year or two, but by year 2 if we cut the op budget by 20 billion, and furthermore get some additional tax revenue by these guys going into industry, it will pay itself off. thats why guys like wjk are used to handling this sort of restructuring. leave it to us to take care of the country's interest