Don’t Be Jumud, Jomo

I read with amusement a recent article posted on an Opposition-leaning news portal how Jomo Kwame Sundaram’s answer to address a ballooning debt is by cutting the Prime Minister’s Office’s spending, and also to reduce the number of mega-projects.

Jomo, who is Visiting Senior Fellow at Khazanah Research Institute, said that what Malaysia needs now is more appropriate development expenditure, not yet more operating expenditure, especially for the PMO, which has grown more than tenfold and has centralised power like never before.

According to the article, the PMO was allocated RM17.43 billion in Budget 2018, almost double the RM8.938 billion it received in 2008.

The Prime Minister’s Office or the Prime Minister’s Department?

The Visiting Fellow at Khazanah Research Institute apparently finds it difficult to distinguish between the Prime Minister’s Office and the Prime Minister’s Department.

According to Budget 2018, RM17.43 billion was allocated to the Prime Minister’s Department, and not the Prime Minister’s Office.

The Prime Minister’s Office is only one of 56 agencies under the Prime Minister’s Department.

I don’t know what was Jomo also trying to imply by saying that the PMO has more centralised power like never before.

Since the budget is for the PMD and not the PMO, the centralised power and authority to spend the budget comes under the Chief Secretary to the Government of Malaysia, who is appointed by the Yang DiPertuan Agong.

Major agencies under the Prime Minister’s Department include the 7,000-strong Malaysian Maritime Enforcement Agency, the 3,000-strong Civil Defence Force as well as the Eastern Sabah Security Command (ESSCOM).

All these agencies have been tasked to look after our security and well-being.

In 2008, there was no MMEA nor was there the ESSCOM.

The MMEA, for example, has since added more capable blue-water assets to replace its ageing heritage assets handed down from other agencies such as the Royal Customs Department, Royal Malaysian Police, Royal Malaysian Navy and the Fisheries Department.

The heritage assets’ average age was 30 years old and consisted mainly of coastal and brown-water assets.

ESSCOM has also added more assets such as surface-search radar, build installations for security units to operate from, to combat border incursions by illegal immigrants as well as by terrorist groups.

The Malaysian Civil Defence Force, or Angkatan Pertahanan Awam Malaysia (APM), has gone on a massive recruitment drive and assets procurement.

With a permanent force of only 3,000 there is not enough of them to go around in the case of an emergency or disaster.

It was reported that in Kuala Kangsar, there is only one permanent APM staff who is the ambulance driver when responding to an accident or other emergency medical cases, and is also the coxswain for the rescue boat when there are floods.

Surely the men and women of the agencies I mentioned above also deserve a raise when due.

Then there is of course, the Parliament.

The budget for Parliament also comes under the Prime Minister’s Department, in case Jomo is not aware of that.

Operating costs, staffing costs, allowances and pensions for current and former members of Parliament come from the Prime Minister’s Department.

So, when your MP walks out of a debate or does not attend bills voting sessions, don’t ask why is the government spending unnecessarily.

Ask why is the government paying for your lazy MP. Ask also why was your MP a one-term MP, and why is there so many one-term MPs especially from the Opposition.

And please also ask why is the government still spending on the secretariats of two former Prime Ministers – one who made so much noise when the government reduced the budget allocated for his staff, while he goes around running down the current government as well as the country.

Debts? Can’t We Pay?

Jomo, described as a prominent economist in the article, also mentioned about the fast-rising government debt which is now hitting almost RM700 billion (USD178 billion).

He said that the mega-projects that are now being constructed have added to the burden of debt that Malaysia has to shoulder.

While it is true that our debt is actually at RM687 billion, domestic debt is at RM492 billion (or 72 percent of total debt) while external debt is at RM195 billion (28 percent).

Our International reserves stand at RM417 billion.  I am looking at the latest report issued last week by the Bank Negara Malaysia.

But you do not just look at debt to know how we are performing economically.

Our debt to GDP ratio is at 53.2 percent, down from 54.5 percent the previous year, year-on-year.

So Jomo is off the target when he said the government is not addressing its debt issue.

Market consensus of our GDP expansion was at 5.4 percent.  Yet, it was at 6.2 percent year-on-year in September 2017, making our economy one of the most robust expanding economy.

Private consumption increased by 7.2 percent in the same reporting period where Malaysian spend mostly on food, communication, housing and facilities.

So how is that possible if the economy is not doing well?  Our exports grew by 12 percent; manufacturing sector rose 7 percent; services rose 6.6 percent; construction 6.1 percent.

At 53.2 percent debt to GDP ratio, it means that the government is still able to pay off its debts.

As a comparison, Japan’s debt to GDP ratio is 250 percent; the US is at 106 percent; France is at 96 percent while the UK is at 89 percent.

Among ASEAN nations, Singapore has the highest debt to GDP ratio which is at 112 percent.  Any country that has its debt to GDP ratio exceeding 100 percent means that it has debts more than it could make money.

But do we hear anyone from the countries mentioned above complain?

Epilogue

Every day we hear of ill-informed Malaysians complaining that our country is in such huge debt that the country will soon be in ruins.

Selective statements by the likes of Jomo is not helping the situation. And it certainly does not help especially when his statement was intentionally directed at the Prime Minister’s Office, and not the Prime Minister’s Department where the budget was given.

Perhaps, it was malice on his part to intentionally and falsely painting the wrong picture, to make the Prime Minister look bad.

Or perhaps it was the editor of the said portal who spun Jomo’s statement to make it look as if Jomo implied that it was the PMO instead of the PMD.

Either way, Jomo’s intentional or unintentional non-mention of the debt-to-GDP ratio shows the bad blood he has with the Najib administration.

A true economist would give the WHOLE picture.

Jomo is not.

(This article was first published by The Mole)

Drama Kera La

ST photo -SAF-PLA joint military exercise
Singapore Army invading China?

Recently, a video clip of how China is fulfilling its hegemonic ambitions using economic means was spread around especially in Facebook and WhatsApp groups.  The video compares the Sino-Sri Lankan joint-venture at the Hambantota Deep Water Port with the ones in Malaysia, proving that Malaysia, like Sri Lanka, could end up not only with a huge debt owing to China, but also lose its ownership of those assets.

On the surface, it sounds scary to have so much money owed to China for these projects especially so for the ill-informed.  But comparing Malaysia to Sri Lanka hardly does any justice.

The Hambantota Deep Water Port lies within the constituency of the former President Mahinda Rajapaksa and costs more than $1 billion to construct.  Another project that was constructed in this constituency is the Mattala Rajapaksa Airport, located 30 kilometres away from the port, which until now flies only a few hundred passengers in and out weekly and has been dubbed “the world’s loneliest airport.”

Hambantota is a remote region in the South, 240 kilometres from Colombo and the nearest city, Galle, is 130 kilometres away.  The population of Hambantota is around 12,000 people and is very underdeveloped.  The problem with Hambantota’s deep-water port is that its waters are not deep enough for large vessels with deep draught, so large shipping companies shy away from it.  It is far from any development that hardly anyone wants to move there.  Both the port and the airport cannot generate enough income to sustain operations let alone pay back loans to the Chinese.

Sri Lanka owes its financiers close to $65 billion and of this, $8 billion alone is owed to the Chinese.  Its GDP stands at $81.32 billion, debt-to-GDP ratio stands at roughly 75 percent while its foreign currency reserves is at $7.2 billion.  The Sri Lankan government uses 95.4 percent of its revenue to repay debts.  These are the reasons for Sri Lanka to opt for a debt-for-equity solution for both projects.

Compare this with Malaysia’s $13.1 billion East Coast Rail Link, or RM55 billion in Malaysian terms.  Malaysia took a $11.14 billion loan (85 percent or RM46.75 billion) from China to finance the project while the balance is in the form of a sukuk programme managed by local financial institutions.

The Forest City project in Johor is a development programme that runs over 20 years.  How much is being allocated per project is a company confidential information but if we go by average, it would be at $5 billion per annum, with a total of $100 billion over 20 years.  The project commenced in 2015 and to date has completed about 11 percent.  At the end of December 2016, Forest City saw concluded contracted sales of $2.9 billion for 17,000 apartment units.  It still has another 17 years of development to go.

Our GDP now stands at around $320.25 billion (RM1.3 trillion) for 2017 which puts the cost of the ECRL project at 4.1 percent of the GDP while Forest City accounts to approximately 1.6 percent of the GDP per annum.  The total Government debt as at end of June 2017 was reported to be at RM685.1 billion or 50.9 percent of the GDP.  Of this total, RM662.4 billion was domestic debt while RM22.7 billion was offshore loans.

Interestingly, as of October 2017, the US debt to China is at $1.2 trillion, which is 19 percent of the $6.3 trillion in US Treasury bills, notes and bonds held by foreign countries.  The US GDP in 2016 was $18.57 trillion which makes its China-debt-to-GDP alone at 6.5 percent.

Of course, we could undertake to pay for all the above projects.  Our foreign currency exchange reserves are at RM414.71 billion ($102.17 billion) which is more than enough to pay for both projects.  If we use the Mahathir-era method, then Petronas has RM129 billion in cash ($31.8 billion) while the EPF has RM771 billion ($189.9 billion) worth of assets.  This does not include sources from other funds such as Khazanah, Tabung Haji, KWAP, SOCSO, PNB and others.

If our debt-to-GDP ratio of 50.9 percent is still a scary number to you, it was at 103.4 percent when Mahathir was the Prime Minister in 1985!  And an equivalent to 24 percent of the GDP went missing as a resut of the BNM Forex scandal also during his tenure as the PM in 1991!  That is RM315 billion if our GDP is RM1.3 trillion!  In contrast, Singapore’s debt-to-GDP ratio is 112 percent at tenth place out of 17 nations with the highest debt-to-GDP rate listed by Business Insider, UK.  Japan is first at 239.2 percent.

Still, we did not go bankrupt back then. So why should we fear a 50.9 percent debt-to-GDP ratio with much stronger economic fundamentals when we have reached 103.4 percent with a much weaker economy? And neither Singapore nor Japan has gone bankrupt.

And what is with the ownership of the land where Forest City is situated?  It is a reclaimed land; therefore, no part of mainland Johor was carved out to be “given to the Chinese.”  Johor has rights over the reclaimed land as accorded by the National Land Code, 1965 up to three nautical miles as given by Section 3(3) of the Territorial Sea Act, 2012.  Whether it is a freehold land or a leasehold land, Johor can always take it back, with provisions, under the Land Acquisition Act, 1960. Up to 12 nautical miles from the foreshore, the Malaysian flag flies no matter who holds the grant.

Mahathir recently said “I hope Forest City will truly become a forest… Its residents will consist of baboons (kera), monkeys (monyet) and so on”, fuelling unjustified fears among the people of Malaysia.

The Malaysia-China Kuantan Industrial Park (MCKIP) has MCKIP Sdn Bhd (MCKIPSB) as its Master Developer.  MCKIPSB is a 51:49 joint-venture between a Malaysian consortium and a China consortium.  In the Malaysian portion of the shareholding, IJM land holds 40 percent, Sime Darby Property 30 percent and the Pahang State Government holds the remaining 30 percent. Its twin sister, the China-Malaysia Qinzhou Industrial Park (CMQIP) in China is 49 percent owned by a Malaysian consortium (SP Setia Berhad and Rimbunan Hijau Group).

Going by Tun Dr Mahathir’s logic, has China just allowed Malaysia to colonise its land too?  Prior to this it allowed Singapore to colonise in two other areas, namely the China-Singapore Suzhou Industrial Park and the China-Singapore Tianjin Eco City.

As bleak as Sri Lanka may sound, Japan, Singapore and India have expressed interest in building infrastructure and setting up shop in Sri Lanka.  Even with much weaker economic fundamentals compared to Malaysia, Lolitha Abeysinghe of Opportunity Sri Lanka remains optimistic.

Over-dependence on any country for investments, technology, and markets could result in some adverse impacts on national interest in the long-run, but if managed properly with a futuristic vision, Sri Lanka can mitigate such adversity and reap the best benefits for the rural domestic economy in one of the least developed districts in Sri Lanka,” he said.

Malaysia has that vision but sadly some of its people would rather see everything fail in the name of politics.  The politics of baboons and monkeys.

 

 

 

Baca Dan Berlaku Adil

Saya menerima mesej yang ditularkan dalam salah satu grup WhatsApp seperti berikut:

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*TARIKH: 21 MEI 2017 (AHAD)*

*MASA: 10 PAGI*

*TEMPAT: IPD KEPALA BATAS, SPU, P. PINANG*


Sila berkumpul di Kedai Mamak bersebelahan Maybank Bertam bermula jam 9 pagi. Semua veteran dan rakyat Malaysia yg prihatin dijemput hadir. *Warna pakaian: Hitam*)
*Biar Putih Tulang Jangan Putih Mata*


Maklumat lanjut akan menyusul. Pertanyaan:

*AZIZAN MEMALI: 019-5673650*


http://www.malaysiakini.com/news/382421


http://www.malaysiakini.com/news/382531


# VIRALKAN DEMI NEGARA DAN ANAK CUCU TERCINTA

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Lalu saya menjawab:

1. Jumlah pelaburan China di luar negara tahun 2015 berjumlah USD54.4 billion. USD38 billion sahaja di Eropah.
2. Lapan bulan pertama tahun 2016 ianya berjumlah USD61.7 billion.
3. Amerika Syarikat merupakan tempat pelaburan negeri China terbesar 2016 untuk dua tahun berturut-turut diikuti Hong Kong, Malaysia, Australia dan UK.
4. China merupakan pengimport kedua terbesar bagi barangan Malaysia.
5. China henti sokongan dari semua aspek terhadap Parti Komunis Malaya selepas lawatan Tun Razak pada tahun 1974. Ini mengakibatkan PKM dan Suara Revolusi Malaya berpindah dari Hunan ke Selatan Thai.
6. Usaha pertama untuk membuka perdagangan dan memperbaiki hubungan politik di antara Malaysia dan China adalah oleh Dr Mahathir pada bulan November 1985, 4 tahun 1 bulan sebelum perletakan senjata oleh PKM, selepas peristiwa berdarah Memali.
7. Hutang 1MDB tidak melibatkan wang negara. Semua hutang jangka pendek telah dilangsaikan dengan 1MDB membuat keuntungan USD2.5 billion.
8. Pembayaran kepada IPIC telah dibuat dan tiada hutang lagi.
9. Jumlah hutang jangkapanjang 1MDB dalam bentuk bond bernilai RM41.7 billion hanya perlu dibuat pada tahun 2022 dan 2039. Jumlah aset dalam pegangan 1MDB bernilai RM60 billion.
10. Sekiranya 1MDB tidak menjalankan sebarang perniagaan ia masih mampu membayar hutang jangkapanjangnya.
11. Hutang negara hendaklah dilihat dengan KDNK sekali. Sepertimana hutang kita berbanding pendapatan.
12. Kadar hutang negara berbanding KDNK pada tahun 2015 adalah 54.5%. Ini bermakna sekiranya (contoh) anda mempunyai pendapatan RM1000, hutang anda adalah RM545.
13. Berbanding tahun 1986 kadar hutang negara berbanding KDNK adalah 103.4%. Sebagai contoh jika anda menerima gaji RM1000 tetapi hutang anda adalah RM1034.
14. Singapura mempunyai kadar hutang negara berbanding KDNK sebanyak 106%, atau RM1060 sekiranya anda mempunyai pendapatan RM1000. Adakah Singapura juga akan bankrap?
15. Keadaan ekonomi pada hari ini adalah akibat kejatuhan harga minyak global yang menjejaskan banyak negara dan bukan Malaysia sahaja. Malah KDNK Malaysia adalah jauh lebih baik dari Singapura, UK, Australia, Amerika Syarikat, Brunei dan 142 lagi negara di dunia.
16. Berbalik kepada soal ideologi Komunis menular akibat Malaysia berbaik dengan China, adakah ini bermakna Amerika Syarikat, Australia dan UK juga bakal menjadi negara Komunis?
17. Kita kena lebih bijak berfikir dari mengutamakan emosi. Wahyu pertama Allah SWT menyuruh kita membaca dan Surah Al-Hujurat ayat 12 menyuruh kita menyelidik sebelum membuat kesimpulan.

RM623.3 billion… AND FALLING!

  
One look at the headline above and the untrained mind would scream in panic.

However…

According to a parliament answer by Deputy Finance Minister Johari, as at end Sept 30, 2015 our govt debt is now at RM623.3 billion, which is 50.7% of GDP – dropping from 52.8% (RM568,8 billion at June 30, 2014) and 54.7% (RM547.6 billion as at end 2013).

Our debt has increased but our country’s GDP (our national income) has increased much faster due to our steady GDP growth – hence the sizeable drop in the Debt to GDP ratio.
At 50.7% Debt to GDP ratio, according to the CIA fact-book, more than 70 other countries in the world will have to go bankrupt before it reaches our turn.
These countries include: Japan Zimbabwe Greece Lebanon Jamaica Italy Portugal Eritrea Cabo Verde Grenada Ireland Cyprus Belgium Singapore Barbados Spain Puerto Rico France Canada Egypt Bhutan Jordan Antigua And Barbuda United Kingdom Iceland Croatia Austria Saint Kitts And Nevis Belize Saint Lucia Hungary United States Germany Morocco Sudan Albania Sri Lanka Ghana Ukraine Dominica Serbia Sao Tome And Principe Netherlands Malta Aruba Saint Vincent And The Grenadines Israel Seychelles Pakistan Guyana Uruguay El Salvador Mauritius Slovenia Malawi Mozambique Montenegro Finland Brazil Bahamas, The Yemen Costa Rica Slovakia Senegal Vietnam Venezuela India Marshall Islands Syria 
The steady drop in our Debt-To-GDP ratio is due to our shrinking yearly budget deficits which have been reducing every year to only 3.2% this year and targeted at 3.1% next year.

The federal government debt as of Sept 30 this year was at RM623.3 billion, said Deputy Finance Minister Johari Abdul Ghani.

“Of this amount, 96.4 percent or RM601.1 billion was domestic debt, with the balance of RM22.2 billion or 3.6 percent being offshore loans in various denominations of currency.
“The government debt is manageable and categorised as a country with moderate indebtedness,” he told the Dewan Rakyat today.
He said this in response to a question from Ahmad Hamzah (BN-Jasin) who asked for clarification from the finance minister on the federal government debt.
Johari said the level of the federal government debt for the stated period to the Gross Domestic Product (GDP) was 50.7 percent.
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https://www.cia.gov/library/publications/the-world-factbook/rankorder/2186rank.html
http://www.malaysiakini.com/news/322001
http://www.themalaysianinsider.com/bahasa/article/hutang-negara-rm568.9-bilion-atau-52.8-daripada-kdnk