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Malaysia Looks West for Investments

By MATTHEW SALTMARSH
The New York Times
August 16, 2011

LONDON — With Europe’s economy mired in a debt crisis, governments in the region have been looking east for a helping hand, tapping the likes of China and Japan to buy their bonds and step up investments.

But at least one Asian country — Malaysia — still sees value in turning the opposite way, to enhance opportunities for its more assertive multinationals as well as bolstering investments from the West.

The Malaysian prime minister, Najib Razak, led a large official delegation last month to Britain via Turkmenistan, to capitalize on his country’s strong economy and investment inflows and assuage concerns about political agitation in the multicultural Southeast Asian country. Continue reading “Malaysia Looks West for Investments”

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GDP growth slows to 4pc as global economy falters

By Lee Wei Lian
The Malaysian Insider
Aug 17, 2011

KUALA LUMPUR, Aug 17 — Malaysia’s economic growth decelerated to its slowest pace of four per cent since the 2009 recession as the country was hit by a slowdown in external demand and a moderation in government spending, Bank Negara said today.

This was the fifth consecutive decline in quarterly growth and down from the 4.6 per cent growth registered in the first quarter of this year.

Bank Negara governor Tan Sri Zeti Akhtar Aziz added, however, that stronger growth is expected in the second half of the year and that while there is no revision to the 5-6 per cent growth target for the year, it will “very likely be closer to 5 per cent.” Continue reading “GDP growth slows to 4pc as global economy falters”

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Getting back its mojo

Malaysia’s Penang state
Getting back its mojo
After a slump, an early engine of globalisation is thriving again
Aug 13th 2011 | The Economist

IF YOU are going to have a heart attack, have it in Penang. So one might think, to the see the hospitals in George Town, the capital of this north-western Malaysian state. Patients are flocking in. Ted Mohr, the head of the venerable Penang Adventist Hospital says that he will admit 70,000 medical tourists this year. The hospital specialises in heart procedures and it will perform roughly 23,000 of them this year, including 550 open-heart operations. Such is the demand that the hospital is doubling its number of beds.

Mr Mohr gives two main reasons for Penang’s success with the coronary crowd. First, it is relatively cheap. Open-heart surgery that would set you back $100,000 in America costs only about $10,000 in Penang. Second, Penang’s hospitals are as well-equipped as many in the West.
Continue reading “Getting back its mojo”

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The evolution of crisis

By George Friedman
Aug 11, 2011 | Asia Times

Classical political economists like Adam Smith or David Ricardo never used the term ”economy” by itself. They always used the term ”political economy.” For classical economists, it was impossible to understand politics without economics or economics without politics. The two fields are certainly different but they are also intimately linked.

The use of the term ”economy” by itself did not begin until the late 19th century. Smith understood that while an efficient market would emerge from individual choices, those choices were framed by the political system in which they were made, just as the political system was shaped by economic realities. For classical economists, the political and economic systems were intertwined, each dependent on the other for its existence. Continue reading “The evolution of crisis”

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Bursa losses at RM91 billion since last Monday

By Yow Hong Chieh
The Malaysian Insider
Aug 09, 2011

KUALA LUMPUR, Aug 9 — Malaysia’s benchmark index regained some ground today but still fell 1.66 per cent as regional markets struggled to halt their slide on European and US debt crises fears.

The index recovered from its early morning low of 1,423.47 to end the day at 1,472.14, down 24.85 points from the start of trading. Losers continued to outpace gainers 828 to 159, with 179 counters unchanged.

The broad-based Emas index meanwhile rebounded to 10,048.74 at market close after losing as much as 490.12 points, or 1.75 per cent, earlier.

The Kuala Lumpur share market is down an estimated RM91 billion from last Monday following last week’s rout on Wall Street, the worst since Lehman Brothers collapsed in 2008. Continue reading “Bursa losses at RM91 billion since last Monday”

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Will Idris Jala please return the millions?

— Gomen man
The Malaysian Insider
Aug 08, 2011

AUG 8 — So the turnaround specialist, or best thing to happen to Malaysia Airlines, did not do such a good job after all.

But Datuk Seri Idris Jala pocketed a few million short of RM20 million when he left Malaysia Airlines to become the Najib administration’s transformation czar.

This money was either a bonus or compensation for his glorious achievement of “turning things around” at MAS. I am sure major shareholders at MAS — Khazanah Nasional and EPF — will be happy to enlighten Malaysians on this reward scheme.

That is the problem with us Malaysians; we are so quick to praise people and put them on a pedestal. We called Abdullah Ahmad Badawi a reformer early on and look how that turned out. We still didn’t learn. Continue reading “Will Idris Jala please return the millions?”

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Bursa bleeds another RM31b in global carnage

By Yow Hong Chieh
The Malaysian Insider
Aug 08, 2011

KUALA LUMPUR, Aug 8 — Malaysian stocks continued tumbling today with an estimated RM31 billion in value shed from Bursa Malaysia, as jittery investors spooked by concerns about the global economic outlook continued to dump shares.

After the sustained sell-off today, sparked by concerns over Standard & Poor’s downgrading of the United States’ credit rating and Europe’s persistent debt woes, the KL share market is down an estimated RM65 billion in value from last Monday.

Losers overwhelmed gainers 1,051 to 67 today while the broad-based Emas index shed 2.39 per cent to settle at 10,227.95 — a five-month low.

The benchmark FBMKLCI slipped 1.8 per cent to 1496.99, also a five-month low. Continue reading “Bursa bleeds another RM31b in global carnage”

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Goldman Sachs cuts Malaysia’s GDP forecast

By Yow Hong Chieh
The Malaysian Insider
Aug 08, 2011

KUALA LUMPUR, Aug 8 — Malaysia’s exposure to global markets, especially in Europe and the United States, as well as its budget deficit, is likely to hamper economic growth until next year, with international investment bank Goldman Sachs downgrading today its GDP forecast for the country.

Prime Minister Datuk Seri Najib Razak’s Barisan Nasional (BN) government is expected to face more pressure on the economic front after Goldman Sachs downgraded Malaysia’s GDP forecast for this year and the next.

Goldman Sachs’s downgrade was sparked by concerns that the tightening US budget will limit export growth in Asia over the next 12 months.

The investment bank revised its forecast for the national economy to five per cent from 5.4 per cent for this full year and similarly cut next year’s GDP growth projection to 5.2 per cent from 5.6 per cent previously. Continue reading “Goldman Sachs cuts Malaysia’s GDP forecast”

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Guan Eng: US economic woes could prompt snap polls

By Lisa J. Ariffin
The Malaysian Insider
Aug 07, 2011

KUALA LUMPUR, Aug 7 — The weak US economy and last week’s downgrade of Malaysia’s credit ratings could prompt the Najib administration to call for snap polls as early as November, DAP secretary-general Lim Guan Eng said today.

He said the US debt crisis “will not only have impact on the economy but also the date of the next [general election]”.

“If the impact continues, we will see early elections as early as November because it is very important for the economy,” Lim told a press conference at the party headquarters here today.

“After Bersih, this seems more likely because of a contagion effect,” Lim added. Continue reading “Guan Eng: US economic woes could prompt snap polls”

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The wrong worries

— Paul Krugman
The Malaysian Insider
Aug 06, 2011

AUGUST 6 — In case you had any doubts, Thursday’s more than 500-point plunge in the Dow Jones Industrial Average and the drop in interest rates to near-record lows confirmed it: The economy is not recovering, and Washington has been worrying about the wrong things.

It is not just that the threat of a double-dip recession has become very real. It is now impossible to deny the obvious, which is that we are currently not and have never been on the road to recovery.

For two years, officials at the Federal Reserve, international organisations and, sad to say, within the Obama administration have insisted that the economy was on the mend. Continue reading “The wrong worries”

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Bursa firms shed RM26b amid global markets bloodbath

By Lee Wei Lian
The Malaysian Insider
Aug 05, 2011

KUALA LUMPUR, Aug 5 — Today’s global market sell-off wiped an estimated RM26 billion from the KL stock exchange as investors took the cue from the regional meltdown following the rout on Wall Street yesterday.

Trader terminals were a sea of red today as losers vastly outnumbered gainers 934 to 60 while the broad-based Emas index shed 1.89 per cent to hit 10,478, a level not seen since May.

The benchmark FBMKLCI slipped 1.45 per cent to 1524, also its lowest level since May.

“If the Dow has another down day, things won’t look too good,” said Chris Eng, head of research at OSK Research. Continue reading “Bursa firms shed RM26b amid global markets bloodbath”

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West’s mid-life crisis points to power shift east

By Kristina Cooke and Emily Kaiser
Reuters
Aug 3 2011

NEW YORK/SINGAPORE (Reuters) – The world’s industrialized nations, burdened with aging populations and deeply in debt, face years of slow economic growth that could speed the shift of economic clout to the East.

The United States has no coherent plan to pay for supporting a retiree pool that is about to overflow with the so-called “babyboom” generation, and lawmakers missed an opportunity to address that during the debt debate that dragged the country to the edge of default this week.

Its economy is too weak to create enough jobs for young people on whose shoulders the debt will ultimately rest.

In Europe, economists warn of a “lost generation” as youth unemployment soars as high as 40 percent in some countries. The average public debt of the 27-nation European Union stands 20 percentage points higher than it did before the financial crisis struck in 2008. Continue reading “West’s mid-life crisis points to power shift east”

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Malay contractors call MCA racist, defend Penang government

By Yow Hong Chieh
August 02, 2011 | The Malaysian Insider

KUALA LUMPUR, Aug 2 — The Malay Contractors Association of Malaysia’s (PKMM) Penang branch has defended the state’s open tender system as fair and warned Penang MCA to stop politicising contracts awarded to Bumiputeras there.

Acting Penang PKMM chief Datuk Izham Merican today condemned what he said was Penang MCA’s “ignorance” for failing to understand that open tenders allowed the state government to select the best and most competitively priced contractors, regardless of race. Continue reading “Malay contractors call MCA racist, defend Penang government”

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Rollbacks are threatening reform agenda, say economists

By Yow Hong Chieh
The Malaysian Insider
Jul 28, 2011

KUALA LUMPUR, July 28 – The Najib administration’s reform agenda is in danger of being derailed through decisions to appease the “Bumiputera agenda” and pressure from Malay rights groups intent on preserving the status quo, economists have said.

RAM Holdings Bhd chief economist Dr Yeah Kim Leng said the government must recognise that Malaysia is underperforming economically because the “unfounded fears” of such groups were hindering reforms.

“Their (Malay rights groups) narrow interest may undermine the country’s progress into a high-income nation,” he told The Malaysian Insider. Continue reading “Rollbacks are threatening reform agenda, say economists”

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Muhyiddin pledges RM100,000 to BN MPs as economy bites

The Malaysian Insider | July 28, 2011

KUALA LUMPUR, July 28 — The government will approve an immediate RM100,000 grant for constituencies after Barisan Nasional (BN) lawmakers complained to ministers on Monday that the administration’s focus on big-ticket projects in the Klang Valley would not help the coalition in the next general election.

The Malaysian Insider understands that Deputy Prime Minister Tan Sri Muhyiddin Yassin (picture) had promised the MPs the RM100,000 meant for constituency projects during his meeting with 100 BN federal lawmakers on Monday night.

The sum is expected to be dispersed in time for the Hari Raya Puasa holiday.

Lawmakers had told Muhyiddin and other ministers at the dinner meeting that the government must ensure more funds trickle down to their constituencies instead of concentrating on big-ticket projects like the Mass Rapid Transit (MRT) construction in Kuala Lumpur if the ruling coalition wants to receive a strong mandate in the next general election.
Continue reading “Muhyiddin pledges RM100,000 to BN MPs as economy bites”

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AirAsia Moves Corporate HQ from KL to Jakarta

By Asia Sentinel
23 July 2011

With all the troubles he has had over the last two months, the confirmation Friday that AirAsia, arguably Malaysia’s most vibrant private company, is moving its headquarters out of the country to Indonesia is one more blow.

Tony Fernandes, AirAsia’s group chief executive, confirmed the decision in Tokyo Thursday, saying the move is an effort to upgrade his company’s image as a regional Southeast Asian airline rather than just a Malaysian carrier.

“I don’t know whether Najib has been told or not,” said a business associate of Fernandes in Kuala Lumpur. “But why should Tony care? There are solid business reasons for moving to Jakarta.” Continue reading “AirAsia Moves Corporate HQ from KL to Jakarta”

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What’s really choking investments in Malaysia?

by Edwin Yapp
The Malaysian Insider
Jul 21, 2011

JULY 21 — In my many years as a journalist, one of the most oft-asked questions I’ve put to interviewees who have business interests here in Malaysia is: “What are some of the factors that have prompted you to invest in Malaysia?”

The answers that I get, though not exactly the same every time, can be summarised into one or more of the following major points: low costs, multilingual workforce, skilled labour, and political stability. This was especially true in the heydays of the Multimedia Super Corridor (MSC) Malaysia, when multinationals began pouring their investments into Cyberjaya, building their shared services and outsourcing centres there.

Thus, I read with interest an article last week which quoted our deputy minister of international trade and industry as saying that one of the main features that attracted investors to Malaysia was political stability.

He went on to say that it was “unfortunate” his ministry will now have to rely on other “features” in its bid to promote the country, especially coming off the back of last week’s Bersih 2.0 rally. Continue reading “What’s really choking investments in Malaysia?”

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Applying Prospect Theory To Ending Affirmative Action

By M. Bakri Musa

An insight of cognitive psychology (that sub-discipline dealing with mental processes like thinking and decision making) is that humans are far removed from the ideal of a rational self-interested Homo economicus (Economic man) when making decisions, contrary to the core assumption of traditional economics.

Two factors weigh heavily when we make decisions, given a set of alternatives. One, we are loss averse; that is, we magnify the value of a potential loss and minimize the potential gain even if the two are quantitatively the same. The other is that how those alternatives are framed very much influences our decision.

Although these insights refer to individual decision-making processes, nonetheless they can be extrapolated to the societal level, on how we collectively make decisions. This has relevance to the central wrenching issue dividing our Malay community today, on whether to continue or do away with affirmative action.
Continue reading “Applying Prospect Theory To Ending Affirmative Action”

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Bersih asset freeze will scare investors, says DAP

By Boo Su-Lyn
July 16, 2011 | The Malaysian Insider

KUALA LUMPUR, July 16 — The government’s threat to freeze the assets of those involved with Bersih 2.0 will destroy Malaysia’s financial reputation as bad press abounds on the Najib administration’s handling of last weekend’s rally, the DAP said today.

Deputy Finance Minister Datuk Awang Adek Hussin said yesterday that Bank Negara Malaysia (BNM) can freeze the assets of those believed to be participating in activities deemed risky to the nation’s security. Continue reading “Bersih asset freeze will scare investors, says DAP”

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The economics of compassion

by Erna Mahyuni
The Malaysian Insider
Jul 06, 2011

JULY 6 — The ETP is meaningless. Or at least it is to the man on the street. “Where do they get the numbers from?” a fellow I know asks me. The only numbers that mean anything to him right now are the prices of his food.

His shi cha (iced Chinese tea) and his chap fan (mixed rice) cost more these days while he isn’t earning more. And that is the reality for most Malaysians as we find prices rising while our incomes remain flat.

If the middle-class are feeling the pinch, what more those in the lower-income bracket? While the government spends millions on labs that are supposed to fix whatever problems we have, the poor remain poor.

I get angry when those who know nothing of poverty claim that with hard work, anyone can buy what they want or be who they want to be. Poverty is called a trap for a reason. It is easier to fall out of wealth than to come into it. And for those already poor or born into poverty, the odds are against them from the start. Continue reading “The economics of compassion”