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Sakmongkol ak 47

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Thursday, 11 December 2008

DS Najib- what is to be done?(1)

DS Najib- what is to be done?

First, his task is appointing a highly-capable economic team,

and (2) telling the nation what he plans to do starting the afternoon of March 2009. Specifically: the members of his economic team.

Who they are, we don’t know yet. He must have advisers. He does not have to shy away from appointing advisers. But I hope the team of advisers will not include those paper tigers reviled by the public. Anyone with a modicum of business knowledge with tons of OPM (other people’s money) can do what those alumni of Ethos did. So throw them out first.

Appoint some madcap economists- the more unconventional the better. Keynes wasn’t a typical economist in a tweed jacket and sporting bifocals like Buddy Holly’s. He married a ballerina, headed an insurance company, lover of art, connoisseur of wine( and perhaps the fairer sex too), members of an avant garde group. Preferably a younger group. Late 30s or 40s, representing a generational change and a fresh start. Despite their youth, they must also have some experience . All must be pragmatists, we can even classify them as "centrists" or "centre-right," but in truth they will be remarkably free of ideological preconception. This is more important. Between theory and practice, says Lee Kuan Yew, practice is more important. Also the remark by Deng Hsiao Peng about not caring whether the cat is black or white, as long as it catches mice.

All have well-earned reputations as hard workers, well-versed in the technical details of public and private finance.

In selecting the advisors stay away from veterans of the old battles over supply-side economics or deficit reduction. No need to be well-known to the public. Not necessary to be visionaries. Because we don't need visionaries when the economic perils are clear and immediate. We need competence.

DS Najib must come out with a plan big enough to meet the challenges we face which is to jumpstart job creation in Malaysia and lay the foundation for a strong and growing economy.

Again, I have no inside knowledge, but I'd expect it to be about larger than the RM7 billion proclaimed. Heck the broad band business is RM11bn that would make Rohana Mahmood and Mustapha Ong salivate. Whatever stimulus package must be directed on infrastructure of a sort that will not only put people to work but also improve the productivity of the economy. Increasing productivity is more important than ensuring class F contractors get jobs.

DS Najib’s economic plan will be a down-payment on his larger plan to increase the nation's public investment. His plan will be timely at a time when aggregate demand is shrivelling because consumers aren't spending and investors have stopped investing, and exports are shrinking. DS Najib must recognize that government must be the spender of last resort. He will combine old-fashioned Keynesian economics with newly-fashioned public investments to pull the economy out of its slump.

And he needs to outline his plans now. By putting his economic team in place and telling the nation what he plans to do immediately after he takes office, the incoming PM will be asserting leadership at a time when the Abdullah administration has all but abdicated.

After having his team, he must get down to the fundamentals. First, he must understand that the main problem right now is not the supply of credit. To hell with Valuecap or other big-name borrowers. Of course the Financial Market is jittery at the moment because the possible bursting of the housing and other asset bubbles means that lenders are fearful that creditors won't repay loans. But even if credit were flowing, those loans wouldn't save jobs. Businesses want to borrow now only to remain solvent and keep their creditors at bay. If they fail to do so, and creditors push them into reorganization under bankruptcy, they'll cut their payrolls, to be sure. But they're already cutting their payrolls. It's far from clear they'd cut more jobs under bankruptcy reorganization than they're already cutting under pressure to avoid bankruptcy and remain solvent. This means bailing out boutique investment bankers or the insurance industry or the housing industry may at most help satisfy creditors for a time and put off the day of reckoning. DS Najib must take note that industry bailouts of the nature featured by Valuecap and its like won't reverse the downward cycle of job losses.

10 comments:

Malaysian Tigress 11 December 2008 at 20:06  

Yes Dato,

What IS he going to do? Ada plan ka? Ada plan kita nak tau gak.

Macam isteri bebel kat suami...so what are you going to do? How much do we really have? How are you gonna spend it? What returns we gonna get? How much we keeping liquid? (Ya like we have any...hahaha) Bla2 bla2...bukan pasai apa Dato...bukan suka2 membebel..tapi matter of SECURITY AND PEACE OF MIND...

Ni semua orang clueless and in the dark. It adds to the intense insecurity of the people.

Malaysian Tigress 11 December 2008 at 20:37  

Dato...

satu lagi..kalau dapat peluang, nasihatlah yang bakal dok kat seri perdana. toksahlah redecorate sakan bila nak pindah atas alasan "job creation" atau "stimulate economy". ada suami isteri tgh hari kat opis ikat perut makan roti canai ja so anak depa dapat makan cukup untuk sebulan tu budget depa. ada org hampir murtad sebab dahla suami infect dia dgn HIV, anak pulak 4 disabled tak dak org nak tolong...mana pi welfare department ntah...ada masa dato pi la blog dr lo lo...macam2 lagi lah kesengsaraan rakyat.

berpada2 lah bakal first lady...paling tak, tukar cadar je la..kalau geli sgt, tukarlah tilam...tapi tak yah lah redecorate habis.

nak masuk seri perdana itu bukan untuk bersuka2, tapi untuk bekerja.

satD 11 December 2008 at 20:43  

yum yum 11 billion

Dato Sak

Valuecap was doomed from the start..how can one borrows to invest? No different that margin trading or even the typical leveraged hedge funds....this is supposed to be "strategic buy and hold" institutional investor...

How to apply for the job ah...should we prove how "mad" we r first?

Zawi 11 December 2008 at 21:46  

Datok Sak,
The PM will be as good as his advisers.
If you were in his shoes, who would you appoint to the panel? I would love to see the blink Professor Dato' Dr. Ismail Salleh on the panel who maybe physically blind but sees farther than most people with eye sights.

Anonymous,  11 December 2008 at 21:46  

MT,takkanlah dia dok nak tukak cadar ngan tilam je naa?Orang lain shusah bukan salah dia mak oi!Suami dia PM oi!Nasiblah!Apa dia nak pduli anak orang cukup makan ke tak?ish, ish,ish!
Kapet,langsir,pinggan mangkuk,tukak fungshui lagi mesti ubah pintu dinding sikit,nanti kena cepat berenti pelak macam paklah!Kena check dan ubah habiak oi!Janganlah dok kacho2 pelan baru naa!

sakmongkol AK47 11 December 2008 at 22:03  

bro zawi,
dr ismail salleh is a very clever fellow. he was my tutor when i was in 2nd year econs at UM. very sharp.

walla 12 December 2008 at 08:09  

It is all too well to have young OxBridge groups go in and powerpoint scenarios. But what is equally important is to have senior citizens who have stayed behind to see the cycles of changes which have colored the landscape of our country over the last thirty to forty years. They're like the cinematic reel of a day in the life of a nation caught on film as it starts the day and you can see how the land and the skyscape changes with each passing hour until night arrives. The gradual but perceptible changes which affect the peoples and the state of the economy.

Najib need these people to provide the other piece of the jigsaw puzzle, otherwise he will continue to have the same problems faced by Badawi which all emanate from a disconnect from the pulse of the rakyat.

You can find such a group of advisers from those who have been trained locally and abroad, but stayed on for many years in this country to cultivate good networks at both grassroot and corporate levels while polishing their own individual lenses to provide fresh perspectives on how to analyse situations and get to the roots of matters.

Those who have worked as ADUNs before while having pedigree qualifications and those who have serviced big and small companies before on a multitude of portfolios that challenge their thinking about matters Malaysia in the context of the world are the ones who can play more active roles in helping Najib help Malaysia help the rakyat of this country. Some are also endowed with unmatchable knowledge assets to bring all analyses into more informatised domains.

mekyam 12 December 2008 at 15:42  

tok sak,

what you and pak zawi and walla said make me recall these favorite lines of mine from frank herbert's "dune".

you gents may know the ones:

"a [nation] is supported by four things: the learning of the wise, the justice of the great, the prayers of the righteous and the valour of the brave. but all of these are as nothing, without a ruler who knows the art of ruling."

since herbert's canvas involves planets and stars and galaxies and our own scope only encompasses the nation states on one tiny precious blue marble twirling in space, i have substituted "world" with "nation".

sadly, our own little nation today has sidelined the learning of the wise, compromised justice with those not so great, cannot rely on prayers because there are more of the self-righteous than there are the truly righteous and there is no longer true valour as the brave have only bravado. and all of these degeneration are as nothing in bringing the nation to its present sorry state, without the ruler who learns the art of ruling from the IDIOT's guide of Governing!

satD 13 December 2008 at 02:54  

Salam Dato Sak

have you hear about TIA

http://satdthinks.blogspot.com/2008/12/is-terengganu-leaving-federation.html

satD 13 December 2008 at 02:55  

heard...sowee for the spelling mistake.....:)

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