Najib Razak’s Baloney Economics

April 22, 2017

Najib  Razak’s Baloney  Economics

by TK Chua

Since when is inflation not due to bad policies, poor macroeconomics management, inefficiency, massive corruption and loss of confidence? Sorry, are there new economic theories emerging?

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A Political Baloney

Why single out some external factors igniting inflation when these factors are also applicable and affecting other economies?

Malaysia is a net oil exporting country, but global oil prices have now become a major factor accounting for our high inflation. Can we not see the baloney and the irony here? What about countries with no oil to begin with? Would they not be affected by high or low prices of oil as well?

The “Trump phenomenon” is a uniform factor likely to affect most countries. Why should Malaysia suffer more than others if indeed Trump has caused reverse capital flows and currency realignments globally?

The ringgit has depreciated not just against the US dollar, but also against the Singapore dollar, Chinese Renminbi and Thai baht, just to name a few.Malaysia’s inflation is unprecedented in recent months. When global oil prices were more than US$100 per barrel, did Malaysia’s inflation reach 8%?

I hope some of us have heard of this statement before, “Inflation is always and everywhere a monetary phenomenon.” The primary cause is always too much money chasing after too few goods.

The Shrinking Ringgit

We can argue and debate whatever we want, but inflation is invariably caused by the following factors:

First, high taxes and unproductive use of tax money. I have lived in this country long enough to know that the GST is a major culprit of inflation, causing prices to escalate higher than the GST rate due to our half-baked implementation.

 Second, when there is too much fat or unproductivity in the economy. When there are sectors that get the bulk of the income/subsidies/wages for doing nothing, they cause inflation.

Third, when we have too many over-priced projects and contracts. When contractors and promoters get too much profit, the people must pay for it through higher prices. There are no free lunches in this world.

Fourth, when government borrows and spends too much. Fiscal deficit is a given in Malaysia, regardless of the state of the economy. Borrowing to finance deficit from inflationary sources could make the situation worse.

Fifth, when policies favour the cronies. When we have massive distortions and profiteering due to collusion and complicity, prices will escalate. Prices of homes are high because developers have always got what they wanted at the expense of the buyers.

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Najib Razak’s Non-Bumiputra Crony

Sixth, when foreign monies are allowed to pour in indiscriminately. When we have too much foreign money going into our real estate and property sector, it is almost certain the locals, including the middle class, would not be able to compete. Probably, the purchasing power of 5% of rich Chinese is bigger than the whole middle class of this country.

Seventh, we have too much “bad news”. It is almost a daily affair for us, hearing of mega deals going wrong. I must say Malaysia is a strong young man but has subjected himself to constant drugging, drinking and smoking. Sooner than later, something must give.

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International Rogues Gallery

This is the essence of lack of confidence being manifested in our country today. I believe the ringgit is suffering not just because foreigners are pulling out. I think many high net worth Malaysians too are hedging to protect themselves.

We owe ourselves the responsibility to look at issues confronting us honestly and objectively. Even if there are external factors affecting inflation, we must still avail ourselves macroeconomic tools to mitigate them.

Have we resolved issues that are likely to restore confidence? Have we reduced the distortions and inefficiency prevailing in the economy? Some have argued that Pakatan Harapan-controlled states, namely Penang and Selangor, are also suffering from high inflation and hence, it is something to be accepted.

I think this is a “political” argument devoid of economic logic and reality. Penang and Selangor are subjected to the same economic and political environment as the rest of the federation. They are not exempted from the effects of bad policies or the erosion of confidence arising from bad policies.

TK Chua is an FMT reader.


5 thoughts on “Najib Razak’s Baloney Economics

  1. I agree with TK Chua that “We owe ourselves the responsibility to look at issues confronting us honestly and objectively. Even if there are external factors affecting inflation, we must still avail ourselves macroeconomic tools to mitigate them.”

    What has gone wrong with our public officials in the Economic Planning Unit of Prime Minister’s Department, Treasury and Bank Negara Malaysia ? These key agencies used to be known for their integrity and their willingness to express views which differ from that of the government in power (Najib Razak). Today they can only spin on behalf the government in power.–Din Merican

  2. Najib did Industrial Economics at University of Nottingham but Najib learned more about the Sheriff of Nottingham during the time of Robin Hood.
    Najib treat the Federal Treasury like his own piggy bank and when he needed more he begin tapping funds from KWAP, EPF, FELDA, TABUNG HAJI and other funds.

    The sad thing is that EPU, Treasury, and all the heads of these funds and agencies kow tow to Jib and never raise any objections. Gone were the days of brave and upright civil servants and staff of statutory bodies. Nowadays its all yesmen.

    Guess when Jibs dont like the numbers generated by EPU he created Pemandu and other agencies that embellish the economic outlook.

  3. It’s Ketuanan entitlement ideology to say they have done some of the work and if they fail to do the rest or messed up, no matter how gigantic, it’s not their fault.

    This comes from the next generation of UMNO leaders – the same over entitlement. 1MDB will not happen again? Really they will find new ones and its even besides the point, the wasted opportunities is unaffordable. How many want to bet IPIC-1MDB settlement has a opaque China party?

    The Najib economics is baloney but his politics is pornographic – obscene, disgusting and offensive.

  4. Since when has our politicians, or indeed any politician anywhere in the World, blame themselves for anything, (perhaps with Japan as a notable exception)?

    Of all the South East Asian countries, Malaysia is the best endowed with practically no devastating natural disasters to speak of, and yet we can’t even beat that Little Red Dot which has to buy raw water from us and sell drinkable water back. And when they came up with “Newater” some of us only knew how to laugh. And the biggest irony was that some of the people who worked on this Newater were ex-Malaysians.

    Laugh some more lah.

    1. Malaysia has among the lowest cost of living in ASEAN
    2. Trust the propaganda agitprop of Najib. Anything cotradicting DSNR are lies
    3. The money in my account is a donation from the saudi royalty;
    4. I didn’t know the money come from SRC, which I thought was from the Saudi Royalty, but I use it anyway;
    5. 1MDB is debtfree;
    6. KWSP, KWAP, LTAT, TH and all the funds are part of my kingdom;
    7. See under me MACC is catching all those “biggies””
    8. I didn’t use it for my personal gain;
    9. I do not have enough religious extremists, so I give Naik the PR in appreciation of him filling the gap;
    10. Hey, I Bugis warrior is fighting for Bangsa, Agama and UNMO.

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