29 September 2011

Where Is Malaysia Direction For Next Generation? – OnlyAtMalaysia.blogspot.com
For those who started work around 1973, a 1.3 litre Japanese car was RM7,000.
Today the equivalent is ... let's say RM60,000 ... 8.5 times.

In 1973 a double storey house was about RM45,000 ... or less.
Today it is about RM300,000 ... 6.6 times.

In 1973 an Engineer's pay was RM1,000.
Today it is about RM2,800 ... 2.8 times.

From 1973 to 2011 ... 38 years. What is the trend?

In a stock market when the trend is bearish, what do we do? Exit!
When a country's trend is bearish what do we do?

This bearish trend is more difficult to turn around as compared to the stock market.

I have used these 3 items: house, car & salary as a measurement of the country's performance for the past 38 years. Foreigners also ask about these 3 items to gauge our standard of living.

There is a book I saw entitled: "Malaysia : The Failed Nation". Some of you may be interested to read it. I agreed with the writer.

This morning I was having coffee at McDonald (now the coffee, 100 % Arabica beans is quite good @ RM 2.90 with free refill!
I asked how much per hour is their pay?
RM3.00 x 8 hours = RM24 per day x 25 days = RM600 per month.

My daughter works part time during her university days. She worked at Gloria Jeans Coffee. The pay?
Australian $14.00 @ 3.15 = RM44 per hour x 8 = RM352 per day x 25 days = RM8,800 which is 14.7 times more!

Price of houses in Perth is about the same in Kuala Lumpur.

Price of cars are about 23% cheaper in Perth.

I think more and more people are becoming aware of this bearish trend.

Developed country by 2020 means high income country!

Let's look at some as of year 2005 (Financial Times)
USA GNP per capita US$35,400
UK GNP per capita US$25,510
Australia GNP per capita US$19,530
Singapore GNP per capita US$20,690
(These are developed countries by income measurement)

Malaysia 's GNP per capita US$3,540

Year 2020 developed country? Really a sad story. Worrying trends, isn't it?

Recently, I interviewed some fresh graduates applying for jobs with my engineering company. I accepted two applicants on a starting salary of RM1,600. It struck me as odd that 15 years ago, I myself started work as a fresh graduate engineer for the same pay.

Indeed, if you compare the salaries of graduates now and 15 or even 20 years ago, you'll find little difference but that their purchasing power is vastly different. It's the same story when you compare salaries of shop assistants, office staff, factory workers and others.

To compound the effect of inflation, the ringgit has depreciated greatly against all major currencies. The real income of most Malaysians has moved backwards.

This is why many Malaysians suffer under the petrol hike. The root of the problem is that our real incomes have shrunk in the face of inflation and depreciated currency. Malaysians have not been spoiled by subsidy but are unable to move out of the time lock of stagnated and depreciated incomes.

If you compare the per capita incomes of Singapore, Hong Kong, Taiwan and South Korea, they are a few multiples of ours although at independence all these countries were the on the same economic level as Malaysia. We grouped with them and were called Asia little Tigers. Today all of them have progressed and become 1st World (OECD) except us. We are now compared with second tiered Thailand, Indonesia and Vietnam who also seem to have overtaken us!

What has gone wrong? We were the rising star of East Asia, a country rich in natural resources with the most promising potential.

The reason is massive corruption, plundering of resources, wastage of funds for huge non-economic projects, anti-public interest deals with politically-linked companies (cronies) and passing-of-the-buck to the man in the street. For example, Hong Kong and Singapore eradicated massive corruption in the 80-90s with their ICAC and promoted transparency and meritocracy with world standard education to uplift their economies. They now have universities ranked in the World's Top 50 (none in the 80-90s except University Malaya ).

Four decades of NEP where education, economic and employment policies are defined by race ensured that meritocracy took a back seat.

Our university standard has declined and today the best and brightest of our youths emigrate to escape the racial inequility only to contribute to the economies of foreign lands.

The reputation of our judiciary which was held in high esteem worldwide has sunk so low that foreign investors now insist on arbitration in Singapore in case of any dispute.

We also have a slew of oppressive laws such as the ISA, OSA, UUCA and PPPA which stifle free speech and are designed to keep the ruling parties in power..

We have become less attractive to foreign investors and now lag behind our neighbours in Asean for foreign direct investment. Even some corporations who have established themselves here are moving out.

All the economic and social malaise cannot help but affect the value of our currency. The strength of a country's currency is after all, a reflection of its fundamentals.

Furthermore, Bank Negara has a policy of weak ringgit to help exporters, never mind the burden on the common folk. It is pro-corporation, not pro-rakyat.

While the poor and middle class are squeezed, an elite group gets breathtakingly rich. We have the distinction of having the worse income disparity in Asean. A re-distribution of wealth is under way from the poor and middle class to a select group of politically connected elite.

The end result of this re-distribution will be a small group of super-rich while the majority are pushed into poverty and the middle class shrinks. This is what happens when the rich gets richer and the poor get poorer.

There is much that is wrong with Malaysia. The responsibility for pulling the country backwards can be laid squarely at the door of the ruling regime. It is mis-governance, racial politics and culture of patronage which has seen the country regress economically and socially.

Is there any hope for Malaysia?

Only At Malaysia


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