econsmalaysia.blogspot.com

Just discovered econsmalaysia.blogspot.com. It had a very good post named A FAQ On Malaysian Government Debt.
I am very much anti-BN but I really had difficulty stomaching Pakatan politicized attack on Malaysian public Debt and deficits. They went too far with their household comparison and omitting the fact that public debt for other countries was growing pretty fast in the last 5 years also.


My comments on his post are reproduced here:
Pardon me a blue collar worker for adding a few grain of under informed opinions hereon what most Malaysian Debt/Deficit Doomsayer choose not to touch:

1) Malaysian Government don't print money. They can only borrow money from Bank Negara Malaysia(BNM) or other institutions(private/public)by issuing government securities(MGS). As a result, the interest on MGS will also cause the national debt to grow.

2) Pakatan doesn't mentioned that other countries governments also rollover their debt consistently. And it is one of the major contributing factors to why most countries saw their gov debt rose steeply in recent years.(Compound interest curve become pretty scary after the 20th year)

3) Gov deficit(public spending) represents a surplus for the private sector. Singapore has a public debt of 102.1% of GDP. Singapore public debt are used to keep public transport affordable, keep the street safe and other commonwealth functions. Malaysian gov deficit are spent into the pockets of cronies. We should be panicking because of corruption and not debt levels per se.

4) Public(Gov) money vs Private(Banks) money? Both increases their liabilities(leverages) to supply the economy with money. But not enough panicky weight has been placed on the level of private debt(mortgage and vehicle). As much as we lament irresponsible gov borrowings, the private banking credits(created out of nothing too) are as culpable in messing up the economy. Both puts money into businessmen to create oligarchies/monopolies and very little are trickled down. Both also pushes the normal folks into debt choke-hold. Bottom line Najib's government needs to face the electorate but CIMB answers to the rich elites only.

5)CM Lim Guan Eng mentioned briefly about private debt but fell short of implementing anything concrete that can curb excessive land speculation in Penang.

6) Malaysia the next Greece? Only if Malaysian foreign debts grow out of proportion and our government cease to be sovereign state that can create its own credit money. Actually, we do have a decent trade surplus by today's international standard.



IMHO instead of worrying about debt level, our main problem is political and legal. How to keep our sovereignty? Meaning what are we going to about practical issues:

1)prevent escalation of an artificial crisis where predatory private individuals/entities (foreign or local) can buy up Malaysia for cents on the ringgit?

2)If SHTF how are we going to repudiate some of the odious debts incurred by corrupt politicians?

3)Gotta to admit that huge amount of the loots had already been illicitly transferred out of the country. So can we come up with some contingencies to claw back some of these funds? Can we find some way to neutralized the value of these illicit Ringgits overseas?

4) Seems that half of our EPF had also been drawn down by our current gov(they seem to prefer borrowing form EPF than BNM). It is not ideal but we have to face the fact that EPF is not going to be fully funded for future retirees. But we can nonetheless find some way to manage the funds flow by not compromising on the retirees or the working public too much.

5) And most importantly when the hell are we going to vote out the crooks in parliaments?(added later)

MRT breakdown : An outsider view

Singapore Government and GLCs have done a pretty efficient job so far compared to others in the region. So how to manage Singapore is none of my business most of the time(except for the cases involving foreign workers like me).

I have worked with some Singapore Statutory Boards and GLCs on public projects for about 4 years. Most of these project and engineering team that I had encountered are pretty decent people. There were some who had used their pangkat as an excuse for being incorrigible, but they are minorities really.

This MRTs breakdowns had already been blown up, dissected and scrutinized. So I am just going to add some personal views only.

My view on the MRT breakdowns are more on the incentives side. An entry level SMRT technician salary now is the same as what I got when I started as a foreign worker in Singapore 10 years ago. Many ITE/Poly grads just used these positions as a stepping stone to other places.

It needs to be asked whether there are sufficient incentives to foster a committed team (people who actually maintains and detect potential problems)? It will be very difficult to come up with a sustainable and effective maintenance program without a committed ground crew.

We can throw all sorts of exogenous management strategies, systemic feedback approach and engineering failure analysis at the problem. Probably solving the problem currently on hand. But have we solve the human problem? The problem with incentives and fairness (or the lack of it) as perceive by people. This in turn will affect the level of cooperation the management will get from its employees.

The problem is not unique to Singapore. Morale in the general labour force are at a very low everywhere you go in the East Asian economies. Management everywhere will always argue that wages need to be kept low as possible because we need to compete with slave like labour in China/Vietnam. That is true and is not going away soon.

To further complicate the problem, a SMRT engineer once told me that it is difficult to increase the technicians and engineers salaries. Due to its nature as a public service, increase in wage bill may incensed some Singaporeans. There is a need for public transport to remain affordable he said.

But there are other areas as well people to delve into. As much as everyone like cheap public transport, do the people want technicians that may need to resort to pizza delivery to supplement their meager salaries? Sleep deprived technicians manning the shifts?

Or is it possible to have detailed breakdown of the company wage distribution? This can justify management position that the workers are fairly compensated within the organization. I mean people can work wholeheartedly even for less money if they feel are fairly treated and sincerely feel they are part of something meaningful.

Globalization and capitalism should not only be restricted to labour must compete among themselves to stay alive. Competitions comes in various forms and on various issues. It can be a competition between cheaper public transport vs higher public worker salaries. It can be 3 corner fight between shareholders, management and employees on how best operate the business.

Furthermore capitalism also concerns the balance in risk (responsibility/liability) and reward(incentives). To keep things in order, management can choose to employs an ex-military or ex-police man to catch night shift technicians dozing off and shouting nasty words to keep them working their toes. Or would it be wiser to consider whether the technicians are fairly incentivised with respect to your expectations? Fairness or bureaucracy first?