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Sakmongkol ak 47

Tuesday 27 October 2009

Principles of Budget Economics

I was planning to write some something substantial about the 2009 Malaysian Budget. I realized that being a bit slower off the starting line; I am unaccustomed to the ability to give spontaneous answer to such a weighty subject as the Malaysian Budget. Having studied a little bit about the theory of 'rational expectations' where one's stand is often taken based on his accumulated experience and accumulated knowledge, I have this bad habit of always being pessimistic about things. I shall in due course give some thoughts on the budget.

For the moment, I am surprised at the feigned jubilant response on the statement that our economy will contract at a reduced rate. Hello, the economy is still contracting, fellows. It's not growing yet. I hope to come up with a more substantive essay in due course after going through the customary skull cracking.

In the meantime, as to the many pronouncements by PR consultants and other positivists, I would like to share a video clip that sums up my general impression.


nxforget 27 October 2009 at 11:41  

Salam dato,

You sure know how to enjoy yourself too hah ? ... surfing the youtube :)

Surely it's hilarious with the hidden economic principles message embedded.

Thanks for sharing.

walla 27 October 2009 at 19:42  

A: 'And what about your specific impression, B?'

B: 'My specific impression? There are no principles of budget economics in this country. That much you would yourself have concluded, A.'

A: 'Why so?'

B: 'If there were, they would have dissected and debated the Auditor-General's Report in Parliament before presenting the Economic Report and the Annual Budget.'

A: 'Practicalities aside, why is that important?'

B: 'Today we read that the Treasury will be coordinating with the ministries and agencies on how to prevent overspending and curb procurement leakages as reported by the AuG. Yet if you will recall, this is exactly what was said after the Auditor-General report was presented - two years ago. So if that has been done, why have the problems ballooned instead?'

A: 'It's an ongoing process, B.'

B: 'Do you think the rakyat are going to accept that, B? They have already pinned the overall KPI for Umno. Government misspending will be the millstone round Umno's neck come GE13. It's not going to come off. Especially when a young girl has just died on a 1Malaysia camp because the new suspension bridge had snapped.

Look, A, it's all about evaporation. But unlike pumping petrol where you can expect a few sen of petrol fumes as spillage, here you have billions blown. Now all the rakyat know where the money has gone. But they don't know that's just the tip of the iceberg. Because all these scams are done by the politicalized underlings in the civil service of Umno, whether federal or state. It has to be in the service of Umno because if it was in the service of the rakyat, they would long been fired and hauled off somewhere, wouldn't they?

Let me draw you something, A. There is a big pot. The bigger the better. It contains a lot of water, the more the merrier. There is nothing above; the lid has been removed. Then you have a hot fire underneath. The hotter, the more efficient. Heat turns liquid to gas which evaporates into the atmosphere.

Can you see the analogy, B? Big pot means big item budget. Hot fire means urgency to spend. Nothing on top means no checks and balances or cost and process control.

That's how all the money has evaporated and we are left to console ourselves that our economic contraction has slowed?'

A: 'But people have explained that some projects require more money than standard because of more stringent specs and also because the agencies have not been updating the pricing lists.'

B: 'Which means they have not been doing their work to update pricings, and/or there's no real open tender. And stringent specs? Ask the germans and the british about MRR2, as a small example.

This isn't new, A, so what's the real reason? Come on, A, don't tell me you don't know a laptop can't cost thirty five thousand more? Or a flagstaff or a photocopied manual can cost thousands? Those are not mindef items so you can't cost the extra missiles into toilet seats.'

A: 'But they are starting to do something about it, you know, whistleblower program, buck stops at head, demerit points, deductions, and so on.'

B: 'Deductions? How many lifetimes before they pay off the scams? Why not go all the way, A? In some countries, the guys are marched to the centre of the field, given a shovel and asked to dig, deep. So why not give the annual bonuses only on condition there be zero malpractices tabbed at the end of the cycle? That will stoke up enough internal fire and get everyone from cleaner to secgen to minister to make sure the right thing is done from day one and from start to finish. Not like now, the play starts after the curtains have fallen.

walla 27 October 2009 at 19:42  


I tell you, it is going to be curtains for Umno come GE13. Because we are talking about billions siphoned away year in year out. Don't we have the thing called conscience anymore, B? Why bother to ask the young to parrot Morals 101?

Every year you see the rakyat queue up in a long line to pay their income taxes. Even when they have had to work so hard to make their money, people take time and trouble to discharge their fiduciary obligations to Malaysia. And yet here you have the system, if you can call it that, systematically creaming off a big chunk of the money paid by the very people who had placed their hopes, trust and votes for good governance. What do they get in return, B? Corruption of the process to weed out corruption. That's what they have woken up to realize.'

A: 'I can understand your angst, B. It has been estimated that some RM28 billion could have been evaporated through overspending and bad procurements.'

B: 'That's without the RM12 billion due for PKFZ. You can add at least RM5 billion that will be bailout money for another project. Why not go all the way back, for posterity's sake, A? How about the billions from BMF, the London tin market, the forex trading, the Sabah paper mill, the Perwaja steel mill, the Inventqjaya, Columbia, Proton, Augusta, Sauber and Lotus investments, the EPF money used in MISC and MAS, the oil paintings, the lawat sambil belajar, the mansions, the million-ringgit tandas project, the hundred million ringgit commission for submarines, the BI no-banker-on-board losses, the Felcra losses, the ROC losses, the MOE losses, the Tourism losses, the TNB losses, the Maybank losses, the Immigration losses, the JPJ losses, the losses from the stadium collapse, parliament house roof and equipment procurements, the losses from the magistrate courts and miti buildings, the flower delivery losses, the cracked roads losses, the unsafe MARA building and NS camp losses? Oh, before i forget, the RM400 ringgit screwdriver losses and the plastic coconut trees losses.'

A: 'You've been keeping tab, B?'

B: 'I'm just reeling out a little bit from a small part of the cerebral cortex, A. Now add that RM114 Billion.'

A: 'What RM114 Billion?'

B: 'That Umno had inked for motorists to have to continue to pay for using tolled roads, that's what. Long after the concessionaires and their bankers have already made their piles over and above investment.'

A: ''

B: 'Exactly, A. So now tell me how you will perceive those uplifting speeches made at the assembly about the need to change and the need to abandon the siege mentality. My beautiful friend, the only people under siege are the stupid rakyat of this country. Can i add something, A?'

A: 'Since you're already so hot, i can't stop you, Tun.'

B: 'I'm not hot. I'm evaporated, A. Just like the other Tun, i have to say what i have to say.

Now, with such marvelous financial management, tell me how replacing malay domination with malay leadership will save this country.

walla 27 October 2009 at 19:42  


If you can answer that, then next tell me when you think the NEP is going to be stopped since the reason given for it is that there are still malays who remain deprived who should also be helped. I have no problem with that since we now have 1Malaysia and so the others who are equally deprived should also be helped as they are also making babies to continue the target that will therefore remain in place, forever.

Now only if you can answer those questions should you try to defend the notion that we don't really practise apartheid policies, A.

And while at it, explain how attracting bigger deficits will be serving the rakyat when all there's coming out are siphonages, leakages and evaporations, furthermore on projects which end up substandard and life-taking. Please, why don't we just call it plain vanilla stealing so that the young of today who will be bequeathed this fantastic nation will celebrate our brilliant and clean governance by declaring yet another national holiday.'

A: 'B, it takes two hands to clap. The givers are also equally guilty. Maybe if they don't give, there will be no takers.'

B: 'Which year were you born in, A? Do you think any giver is such a dumbass as to give while quoting the true price? And ask yourself a simple question. If the system is clean and efficient, will there be room for such malpractices to take place? Is there now real transparency or is it just translucency or transience? If small potato states can do it, why can't we? You want NEP? All that billions are your NEP. That's why i am incensed. You must forgive me, A. I am an old man with nothing much to look forward to except for all the young of this country to have a better tomorrow.'

A: 'I understand how you feel, B. People will say such things also happen in other governments, even the more advanced.'

B: 'But on per capita basis we should have been way better in terms; we should have learned from them earlier. Just that politics and race messed up the economics.

You know, an indonesian ex-minister has been returned because he was so popular with the peoples there for his uncompromising efforts to weed out corruption. People are saying that he doesn't need electoral funds to shore up his popularity. They will just vote for him. Here?

Look, someone posted some study on Malaysia's slide ( Scroll down two-thirds and find our country. Then conclude for yourself. See through all the spin that have covered our collective eyes. Start with those APs. Then ask yourself what this annual budget 2010 is really all about and why has it been shaped the way it is. Draw your own conclusions. I believe in the wisdom of our crowds. Our rakyat are not stupid. Maybe some political party think they are. They are entitled to their own illusions.

And lack of conscience, if i may add.'

walla 27 October 2009 at 20:21  

A: 'So what next, B?'

B: 'Set an example. Make it completely transparent. If the Opposition states can post tendered details, so too this BN animal.

Say we have the PDRM procurement for logistics supplies coming up. It's a RM1 Billion water pot with a hot fire of rakyat demand for better security. Make that procurement the most above-board example.

You need to do this because it's the same minister as the one who was running the same education ministry which has been reported by the AuG to have suffered one of the obscene overspendings.

Don't say it's omission by ignorance. Because an omission here is indirectly a commission of spending needed elsewhere.

There's this malay man. A taxi driver. One day he brought the car to a workshop. He looked tired, dispirited, and worn-down. Only later i learned from the mechanic that the poor man is down from diabetes and kidney failure. He has to spend his own hard-earned wages to clean his kidneys regularly. Otherwise he will..die.

Now, if we overspend in the logistics supply there, we underspend in the healthcare supply here.

Do you understand what i am saying? They don't give shiny medals at pompous investitures for such realizations, do they?'

A: 'You have a good heart, B.'

B: 'Coming to which, why only 30 scholarships for ivy-league scholars? Why not 300? You mean we don't have at least 300 top scholars after fifty years of nation-building into this 21st century? Hummm? Answer me, lah.'

A: 'Let me make you dinner, Tun. Tomorrow is another day.'

B: 'Another day of reaping and rippin', you mean, A.'

Anonymous,  27 October 2009 at 22:25  

Wondering if we should regard you as what many regards Raja Nazrin.

kuldeep 27 October 2009 at 23:08  

I am told that the Budget is very good cos it will catapult us into this high earning economy.
This means..I will soon be earning 4 times more then wat I am earning now.

However.I do hope that the increase is only for me..cos if not ,relatively I will still be poor..and my GLC boss is still 60 times richer (in salaries lah) then me.

The bus driver gets paid more and thus my bus tickets will cost more.The CEO of the GLC bus company who is paid a million bucks to buy bad buses at good prices in order to ensure the tradition of delayed and late services is maintained ;will also be paid 4 times more.

I don't think this works.

Pm needs to have a Creative Minister..not unlike Koh n Jala guys in KPI world...and who are at this present moment holed in 5 star hotels with a huge group of Civil servants and Consultants (wat r we without them?) working feverishly to develop the KPIs.This modus operandi follows the famously publicised "MAS Labs" that spawned the less publicised Rm 3.8 bil hedging loss.

Now,back to Minister Of Creativity..Upin & Ipin comes to mind but they don't qualify cos of their lack of a last name thus uncertain lineage..Dato Latt will certainly bring cheer to the cabinet..Our own Puteri Gunung Ledang is pretty n pretty creative..knows how to spend a bundle..and has some Sarawak wow factor. Norman KRU is a fine prospect now that he is married and dispelled the rumors conclusively.And why not Jean Todt perennial gal fren?

PM in his wisdom will pick the right guy.We await with bated breath.

Meanwhile,do I qualify for a gold card on account of the promised by PM "4 times higher earnings" VISA doubting my PM's promise?

Unknown 28 October 2009 at 09:41  


Govt just announced that they will be restructuring the Petrol Subsidy for All Malaysians starting next year. And that Petrol Prices will reflect global market price! .....
This was never mentioned in the Budget..How is this going to impact the budget??

I would think that Any Increase in Petrol Prices will certainly impact EVERYTHING!

Or is it just a case of the Right hand not knowing what the left is doing?

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