MALAYSIA REPEATING HISTORY
I agree the thoughts and future views from Datuk Seri Dr. Chua Soi Lek. Especially sentences in red written below. Can the government see what is going to happen?
Posted by Datuk Seri Dr. Chua Soi Lek
We are now facing an economic crisis as bad as the 1997 financial crisis, maybe not as dramatic as the depreciation of currency as in 1997. However, impact of the fuel rise and increase in prices in almost all essential goods, creeping inflation, political uncertainty, the US slowdown, all these will definitely affect export sector and will put the Malaysia economy under great stress. The fuel hike will definitely cause the increase in the cost of production and this will definitely eat into the profit margin of the various economic sectors, ultimately, the erosion of their profit margin. This may cause an economic contraction and this will lead to a chain effect, both up streams and down streams. The various industries and services will definitely put expansion on hold. There may be retrenchment, hence unemployment may grow up. Creation of new jobs may come down. Under the RMK9, the yearly creation of new jobs should be 200, 000 per year. I doubt that we can achieve this figure this year. For next year, it could be anybody’s guess for what the employment rate would be, but one thing for sure is that the creation of new work will be much less. Government’s revenue will definitely be affected because corporate tax, individual tax and entertainment tax will be down. Bank will also be confronted with non-performing loans, both from corporate and household loans. Less people will be traveling; both within the country and outside the country and this will affect the whole service sector of hotels, public transportation and entertainment. One area of the service sector which I find illogical is the Ministry of Cooperative and Entrepreneur’s consistent refusal for the taxi fare and transportation fare to be readjusted to cope up with the fuel hike. While they may be provided with subsidized fuel, fuel is only one of the components involved in the public transportation system since many other factors are involved from spare parts, wages of drivers and etc. Hence, it makes no sense that they are not allowed to readjust their fare and transportation changes. Therefore, we can understand why we have dishonest and not so friendly taxi and bus drivers. Hence, we may be facing economic slowdown, rising unemployment, inflation going up, government revenue going down and consumer confidence badly affected and I am sure street demonstration will not resolve these issues.
No comments:
Post a Comment