Category: Finance

— S.M. Mohamed Idris
The Malaysian Insider
Feb 10, 2012

FEB 10 — The government’s aim is to achieve a high-income economy by 2020 must equally benefit all Malaysians. We cannot have a society where one small elite group is living in luxury, while one big part of the society is struggling to survive.

The income inequality gap

According to Dr Muhammed Abdul Khalid, a research fellow with University Kebangsaan Malaysia, although Malaysia has made great strides in reducing poverty and inequality (especially between ethnic groups) from 1970 to 1990, the inequality remains high post-1990.

It has remained almost at the same level for the past 20 years; in fact, the inequality in Malaysia is among the highest in the region. Continue reading “A tale of two classes: Inequalities in Malaysia”

by Costas Lapavitsas
Sydney Morning Herald
January 25, 2012

The dreadful debt saga will only come to a close when Athens takes charge of its predicament, writes Costas Lapavitsas.

Negotiations to reduce Greek debt have been suspended after no agreement could be reached last week. At some point in the near future, Greece seems certain to default on its obligations. But the drama surrounding the talks in Athens, Berlin and Paris shows that there will be nothing co-operative about a Greek default. It is a ruthless contest dominated by the so-called troika: the European Union, the European Central Bank, and the International Monetary Fund.

At every turn, the interests and rights of people across Europe have been disregarded. Negotiations have proceeded in secrecy. Greece, whose government is led by an unelected central banker, is represented by a team of politicians and technocrats who have performed lamentably during the crisis. Those who are owed money by Greece have been represented by the Institute of International Finance, a self-styled mouthpiece for bankers.

The troika has accepted that Greek debt must be reduced to sustainable levels. However, it also wants the reduction to appear voluntary because, if the lenders were coerced, Greece would be declared in formal default, and banks and financial markets would be thrown into crisis. Continue reading “For its own sake, Greece needs to declare default”

By Yow Hong Chieh
The Malaysian Insider
Jan 10, 2012

KUALA LUMPUR, Jan 10 — Malaysia’s national debt will hit 100 per cent of the Gross Domestic Product (GDP) by 2019 should Putrajaya continue to borrow more than it earns, economists say.

Malaysian Institute of Economic Research (MIER) distinguished fellow Mohd Ariff Abdul Kareem warned that the federal government revenue was growing too slowly to keep up with its borrowings, which hit 53.1 per cent of GDP in 2010.

He said while the current size of government debt relative to GDP was not troubling, the pace of its growth in recent years was cause for concern.

Debt-to-GDP ratio jumped from 41.4 per cent in 2008 to 53.1 per cent in 2010 while government debt grew 14.6 per cent in 2008 and 18.3 per cent in 2009, far outpacing the country’s GDP growth, Ariff noted.

“If nothing is done to reverse the current trends in government expenditures and revenues, extrapolation suggests that Malaysia’s national debt will explode to 100 per cent of GDP by 2019.

“Should the debt growth gather speed, this can happen sooner,” he told The Malaysian Insider via e-mail. Continue reading “National debt to equal GDP by 2019 if Putrajaya remains spendthrift, say economists”

By Shannon Teoh
The Malaysian Insider
Dec 15, 2011

KUALA LUMPUR, Dec 15 — Malaysia lost RM150 billion in illicit outflows in 2009, the fourth highest in the developing world, says US-based watchdog Global Financial Integrity (GFI).

According to its report on illicit financial flows from developing countries released today, Malaysia lost a total of US$338 billion (RM1.08 trillion) over the first decade of the century.

“This report should be a wake-up call to world leaders that more must be done to address these harmful outflows,” GFI director Raymond Baker said in a press release.

GFI had reported in January that RM930 billion flowed out of Malaysia from 2000 to 2008, growing to RM218 billion per year from an initial RM71 billion in that period.

It said the increase was “at a scale seen in few Asian countries.” Continue reading “Malaysia rises in illegal money chart, RM150b lost in 2009”

By N. GREGORY MANKIW
The New York Times
October 22, 2011

AS the economy languishes, politicians and pundits are debating what to do next. When we look around the world, it’s hard to find positive role models. But as we search for answers, it is useful to keep in mind those fates that we would like to avoid.

The recent economic histories of four nations are noteworthy: France, Greece, Japan and Zimbabwe. Each illustrates a kind of policy mistake that could, if we are not careful, presage the future of the United States economy. Think of them as the four horsemen of the economic apocalypse.

Let’s start with Zimbabwe. If there were an award for the world’s worst economic policy, it might well have won it several times over the past decade. In particular, in 2008 and 2009, it experienced truly spectacular hyperinflation. Prices rose so fast that the central bank eventually printed 100 trillion-dollar notes for people to carry. The nation has since abandoned using its own currency, but you can still buy one of those notes as a novelty item for about $5 (American, that is).

Some may find it hard to imagine that the United States would ever go down this route. Continue reading “Four Nations, Four Lessons”