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Sakmongkol ak 47

Wednesday, 7 July 2010

Spending out of recession

The best thing the government can do presently is to be honest. In the first quarter, our growth was described as scorching may have been due to just padding. It was not due to substantive dynamics of the economy. Just say so. We wanted to fudge the numbers so that the people will be confident with our management of the economy.
When Idris Jala painted a doomsday scenario he was doing exactly the opposite. Making the people less confident with the government management of the economy. If he does things that jeopardizes the government, throw him out. I am sure he isn't the only native of Sarawak who is clever. I have met native Sarawakians in Shell Miri who are very much cleverer than him and more unassuming. Idris Jala? long in form, short in substance.
If the government had been honest, it would make the current justification to spend more , acceptable. We are sane and rational. If we need to spend our way out of recession we have to do. A man's got to do what a man's got to do. We don't have any quarrel with that. I have always said, spending more than our income is not necessarily bad if it's done correctly. What do we spend it on? Its only bad, if our planned deficit is the result of gross financial indiscipline, is the result on non rational justification. Then deficit spending is bad. It's bad if the spending is for prestige purposes.
We need to educate the public about this deficit phobia in as much as we need to educate the public about responsible fiscal policy. Fiscal policy refers to the way the government manages its income and expenditure. Ok so far?
So can we spend our way out of a recession? The answer is yes we can; provided that spending is high enough and in the right places. Yes, if the government doesn't treat this as a license and excuse for profligate spending. Please don't buy designer shoes for our lady army and police personnel. Can we not?
Will a sovereign government go bankrupt by doing so? No, it will not. It will only if Idris Jala manages the economy. He can't even manage MAS properly , the PM wants to entrust him to talk about our economy. Ibrahim Ali does have his point there- Idris Jala should be dropped from the cabinet. What was his strong point? For calling a spade a spade? Many bloggers can do that job without having to be appointed a minister maa.
Does government spending lead to inflation? No, it does not. Does bigger government spending mean that the government will take over the economy? No, it does not. Does it mean that all types of spending are equally beneficial? Definitely not.
Here's how government spending can be harmful and therefore objectionable. Government spending can be wasteful if there is no improvement in the welfare of society through infrastructure spending, better social programs, and other government spending, preferably employment-enhancing, that improve the standard of living of the population. Ada faham ka? The government wants to spend RM 35 billion on a mass rail transport system. Is there a cheaper alternative instead of spending this amount? The public bus system isn't that good , you want to spend on more expensive means pf public transport.
The problem is, when our government spends, it spends far too much money on wasteful financial rescues and far too few Ringgit were used for the benefits of the overall population. For example has government expenditure reduce unemployment? The minister in charge of labour hasn't got even the data on unemployment in Malaysia. How do you manage then?
Please mister government, publish your unemployment data so that economic sleuths can mine the data. Has unemployment declined significantly? I suppose not when I hear bank economists here and there speak about giving graduates more jobs. What is the employment-population ratio? If employment per population is dropping, then something is bad with the way government spends.
Want a few ideas to fight for? What about increasing health-care benefits, eliminating the payroll tax, engaging in massive green infrastructure programs( why not turn the Sungai Besi air base into our own Central or Hyde Park?), providing free education in the fields in need (not finance, economics, or the arts ok-hehe)? Study FDR's New Deal and look at the type of spending commitments that have been hugely popular among the U.S. population, have contributed to the rise of US economic power, and have not affected at all the solvency of the United States. Baca lah sikit tuan pegawai woi.
As they say, the proof is in the pudding: just look at the popularity of Medicare, Social Security, the air transportation system, the highway system and many other achievements of the New Deal and post-WWII policies. Look at the ideas that work. Forget the ideological leanings.


Anonymous,  7 July 2010 at 10:09  


How do we expect the government to spend "honestly" and "efficiently" when the cancer of corruption is not removed from the government? I think you failed to include "transparency" and "honesty" in government spending in your write up.

As long as the government remains corrupt and the rent seeking culture persists, we do not expect this government to carry out your suggested "honest" and "efficient" spendings to boost the economy.

As for incompetent ministers, Malaysia is in the same league as Myanmar and the african banana republics where such incompetent ministers gets promoted because they happen to be sycophants of their boss.

If only Malaysian ministers have some dignity like the Japanese, Koreans and the western government ministers who voluntarily resign when they fail to deliver, this country may still have a chance to improve and progress forward with real capable people at the helm. Instead our incompetent Malaysian ministers hide inside their own sarongs and change modes to protect their own skins.

sakmongkol AK47 7 July 2010 at 10:23  

yes, but if we pre-judge every expenditure by the government as having the seeds of corruption, we will not spend. weeding out corruption is another issue then. every govt spending ( whether by BN or PKR) contains potential seeds of corruption then. would you rather we do nothing and let the economy self destruct?
no corruption id definitely yes, but we must also take action to save th economy.

hishamh 7 July 2010 at 10:38  


DOS has begun publishing monthly unemployment statistics since March.

A few things to note:

1. The participation rate is pretty lousy, but that can be largely explained by very low female labour force participation (which I suspect, but can't prove, is largely Bumi) of less than 50%. This is largely a long-standing structural issue that is very slowly resolving itself, but can be helped along by women friendly employment policies (extended maternity leave, public funded or incentives for creches/day-care centres, legal support for temporary/part-time employment).

2. The unemployment rate peaked in Feb-Mar last year at 4.0%-4.1%, which coincides with the turning point in the recession, and as of April is 3.2%.

3. What's missing is foreign labour force statistics - I suspect that most of the employment losses fell on this segment of the worforce first, and it hasn't really recovered. Which raises the question of whether we want it to.

Anonymous,  7 July 2010 at 11:18  

Asking thieves to be honest!!
Well, as always the government will spend on 'concrete', weapons, aircrafts and submarines.
It's all hardware.
Human capital, R and D, education, health care, are non starters.
What about brain drain?
In any case government spending is temporary. It cannot go on for ever.

sakmongkol AK47 7 July 2010 at 11:42  

anon at 11:18

i have been very critical about many things the govt does. but if we start off everything with this prejudiced notion, thhis prevents any objective analysis.
i have met up Ibrahim Ali whom i have been critical of, but i was willing to suspend judgement. i am also willing to meet up with Anwar Ibrahim, but i am willing to do the same. i will have the chance to meet up our own great helmsman, TDM i will also suspend judgement.
we must have this attitude my friend. wrong is a wrong. we will come to that.

Anonymous,  7 July 2010 at 12:15  

The White House (US), Buckingham Palace (UK)etc has been in existence since the 1800's and they are being still used by the country's heads & presidents. Why on earth do we need to spend millions of taxpayer's monies on a new palatial palace for the Agong which is not only wasteful but does not help the economy in the long run? And our Jala fler says we must cut subsidies or else Malaysia go bankrupt ! All right thinking rakyat knows what's actually going on except those in the rural areas which are fed on daily spin by the MSM.

Quiet Despair,  7 July 2010 at 12:18  

Bro Sak

I have always appreciated what you have done to corrct the ails in UMNO and the government.
Who can do it better and more believable than those in UMNO itself.
Indeed, we do not want our beloved paty to be in a situation of fools rush in where angels fear to tread.

Neither do I want us to wear rose-colored glasses and paddle down the river denial.
But I feel it's time for you to also single out the good deeds done by the government in the spirit of 1Malaysia.
I dont want you to be misunderstood as someone who have an axe to grind in UMNO.
You mean well, but you know too well, you are open to your enemies arsenal to shut you out of the league of powers-that-be in UMNO.
I also did not like your site to be a battering ram for people like nstman and other Malay haters to run down our race.
Looks like some racist have a field day here to run down the Malays.
To them you are like pucuk dicita ulam mendatang.
They can go to town saying hey, even an UMNO strongman like Sak does see bad things in UMNO.
We cant go to PKR or DAP blogs to bash Anwar because it will never see the light of day.
And the racists on the pretext of being liberals, have many, many blogs to run down UMNO and us Malays.

Anonymous,  7 July 2010 at 12:42  

Dato...there's always a pothole in jalan ampang>>repaired eventually but then other potholes keeps popping up.

Suggest to resolve problem..government build a 7 km elevated highway to bridge all the potholes..cost about RM 1 billion (if awarded on direct nego) call competitive tender lah (or send it down the Swiss challenge road)..myb cost about RM 300 mil.

So..govt saves RM 700 mil and no more potholes.Kill 2 bord with one AK47.

Can i be the Minister of Potholes?

btw..don't laugh at the logic of my proposal cos its very much the rationale for the RM 36 b MRT..

Instead of fixing our komuters,LRTs and buses>>go dig tunnels in search of the miracle cure.No Sir..max what u have first.

Anonymous,  7 July 2010 at 13:03  


I do agree that the recipe for overcoming recession is spend, spend and spend by the government.

Sadly much of the government spending hardly trickle down to the men in the street and main street, but was siphoned off at the top.

Anonymous,  7 July 2010 at 14:03  

"You may say that I'm a dreamer
But I'm not the only one
I hope someday you'll join us
And then will be as 1Malaysia"

I believe that PM is really pushing the agenda for transparency,competitiveness and deregulation.

And I believe we can attain that goal.

IJM's recent contract win for the approach road to Penang Second Bridge of RM 350 mil signals the way fwd cos earlier there were talks of RM 700-900 mil cost for that portion.

The new LCCT is also producing some very competitive bids.

We can be competitive as a NATION..
And as there are many capable & competitive Malays,Chinese,Indians etc..being good is not exclusive to one race.

Similarly,rent seekers comes from all race,creed,religions & States.

So,lets differentiate between those who CAN and those who only WANT...and lets channel our efforts to help those who CAN.

CYC,  7 July 2010 at 14:23  

Dato Sak,

It is not as if we like to prejudge the govt's spending. In reality, it is a fact that corruption can be seen in almost all govt project. And the good thing is BN seems to turn a total blind eyes on the AG's report and let all the sinful ministers and politicians off the hooks. This is the wonderful contribution of your beloved BN govt. What has MACC done?

Anonymous,  7 July 2010 at 15:15  

Dont cry me for Malaysia........if we dont remove the corrupt system that entangles us. Let us do someting for our future generations.

Anonymous,  7 July 2010 at 15:23  

Are you implying that idris jala is not up to the par?
But then isnt that the foremost criteria to select a candidate for a role play kinda post in our beloved motherland?

Anonymous,  7 July 2010 at 15:43  

Dato Sak,

I agree we can boost the economy if we spend but we need to spend wisely and with total transparency. So how do we ensure that the government will do just that when all the so-called spending to date is shrouded in suspicion and mired with controversy?

Unless we also work in tandem to weed out corruption, I'm afraid that "business will be as usual" with the cost of projects highly inflated to enrich certain people. The Auditor General's annual report is sufficiently proof of such blatant abuse of funds and yet no one to date has been censured and taken to task.

Actions speaks louder than words.

Anonymous,  7 July 2010 at 15:47  

Idris Jala is nothing except being used as a sacrificial lamb. To date the PM has been pretty silent about Idris revelation of Malaysia going the way of Greece. I wonder if the PM's silence can be construed as agreeing with Idris?

schenker78 7 July 2010 at 20:47  


just read in the malay mail that the submarine no 1 is broken down that due to DCNS doing sloppy job as they paid commision to Perimekar Razak Baginda and the crazy woman, his wife Mazlinda.???

all of us will be totally shocked to see in 10yrs time the total money spent for this 2 junk subs in the 10s of billions ....

Anonymous,  8 July 2010 at 06:15  


we can talk and discuss till our mouths run dry.

Those APNO goons are only interested in spending where a part of it can be siphoned to line their own pockets. This is their number one objective...and they are steadfastly guided by this objective.

Their actions, guided by this objective, will be seen as unwise expenses by us. And, these goons come across as stupid to us. They do not care what we think so long as they continue to look for opportunities which can meet their objective. They are the conniving and slimy scums of the earth!

Malaysia is heading for doom's day. Crime rate will rise since unemployment will rise. Education standards are poor.....malay calls it kangkong education :-)
have you not heard it?

Malaysia is an international disgrace.


Anonymous,  11 July 2010 at 22:09  

our dear govt is promoting another indirect tax, which is a compulsory contribution towards health program. goodness, when will this govt stop leeching employees who are increasingly being punished by this inept govt. first thing first, stop lining the pockets of the cronies and as you put it rightly, dato' spend wisely for the welfare of the people and UMNO has to engage in gutter politics to regain support.

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