Category: Economics

Categories
Economics

[1014] Of property prices set to go up

The government has eased up restriction on trade. In particular, within the property industry. In the NST today:

KUALA LUMPUR: Foreigners can now own or invest in as many houses costing more than RM250,000 per unit as they want in Malaysia.

In a statement yesterday, the Prime Minister’s Office said effective today, foreigners can buy residential units costing RM250,000 or more without seeking approval from the Foreign Investment Committee (FIC) under the Economic Planning Unit of the Prime Minister’s Department.

What will this liberalization do?

Foreign demand for local property will increase total demand for property in Malaysia. That will increase property prices, while holding supply constant, with all else being equal. It might also add more liquidity in the property market.

Today might be a good day to invest in properties, if supply is unable to cope with the future demand surge.

Categories
Economics Environment

[1001] Of a better and humane alternative to crows culling

Several of weeks ago, I had a meeting with a few people — Shin and Khalid Jaafar were two of them — at Bangsar. While committing myself to an impossible search for a parking space there, I saw a Kuala Lumpur city hall squad shooting down crows. There were countless of crows hovering the area at that time, producing annoying noise. It’s easy to hate the crows for that. While I agree that the noise is a nuisance, I completely disagree with the scourge. The city hall was, and very likely, is, attending to the symptoms, not the root cause. Therefore, there’s a better way to deal with the crows, as a friend advised me during the meeting.

First of all, it’s important to realize that crows in urban areas are scavengers. Despite the negative connotation the noun scavengers brings, scavengers, crows included, play important role in our ecosystem. Scavengers are practically cleaners, breaking down our food leftovers. As scavengers, crows are attracted to the leftover, essentially waste. Our environment as a whole would be a very bad place to live in without scavengers.

It’s highly likely that the reason why the flock of crows hover Bangsar, or any area of that matter, is the presence of waste. Hence, if city hall is really interested in solving the problem, city hall should clean up the waste produced by Bangsar, which is an affluent area. Or better yet, if the population and visitors of Bangsar wants to solve the problem, they will need to clean up.

The culling is barbaric, regardless whether it happened in Kuala Lumpur or Singapore. This is on top of the fact that the culling is ineffective and wasteful exercise, by the very fact that the act of culling attacks the symptom, not the root cause.

Categories
Economics Sports

[997] Of medals, population and wealth at the 2006 Asian Games

In the last Southeast Asian Games held in the Philippines, a Southeast Asian blogger suggested that there’s a correlation between the number of medals won by a country with the country’s population size and wealth. That sounds reasonable to me. With respect to the ongoing Asian Games at Doha, let’s test it.

Let’s touch on the data first. I use 2005 GDP at PPP (IMF) and population size of Asiad country-participants as listed at Wikipedia. The GDP at PPP is used as a proxy variable to wealth. Data on medals collected by countries as of 0400 Greenwich time is obtained from the official site of the 2006 Asiad. In order to differentiate between gold, silver and bronze, I assign three points to gold, two to silver and one to bronze. I have the all the data in one file and you may have it if you’d like to play around with it.

I got MS Excel to run the necessary regression. I know, it’s a bad choice but I don’t have access to other statistical software. I did download some free, legit softwares off the internet but that was too much hassle.

So, on MS Excel, I regressed medal points — number of medals multiplied by point assigned — on population per thousand and GDP at PPP per million.

Before I reveal the result, let’s talk about my initial hunch. I’d think population size and wealth have positive relationship to medals won by countries. To generalize it further, if we take medals won as a proxy to strength in sports, population size and wealth would contribute positively to countries’ strength in sports. What do you think about that?

Now, the result supports that wealth increases the number of medal won. Specifically, each billion of GDP at PPP leads to a 0.0008 increase in medal point, with all else constant of course.

The surprise comes from the correlation between population size and number of medal won. Each thousand leads to 0.0002 decrease in medal point; an inverse relationship, with the typical caveat, ceteris paribus.

The output:

Some rights reserved. By Mohd Hafiz Noor Shams.

Honestly, I’m kind of skeptical of my own regression.

Regardless, on a different set of regression – medal points on GDP at PPP per capita – reveals that a dollar increase in GDP (PPP) per capita increases medal point at about 0.0018, ceteris paribus. The regression result if you’re interested in it:

How significant are the figures?

Well…

Categories
ASEAN Economics

[994] Of ASEAN-India FTA is not looking good

Exactly a year ago, I caught a piece of news on a proposed ASEAN-India free trade agreement. ASEAN however rejected the Indian initial offer because India wanted too many items that fuel ASEAN economy excluded from the FTA. By July 2006, the talk was suspended by ASEAN because the Indian list — down to 850 as of July 2006 from 1400 items as of December 2005 — was still too long:

KUALA LUMPUR, JULY 25: The Association of Southeast Asian Nations (Asean) has suspended free-trade talks with India because of New Delhi’s reluctance to open its markets, Malaysia’s trade and industry minister said on Tuesday.

By August 2006, the Indian list was reduced to 560 items. The lists were supposed to be finalized in June 2005 while the FTA itself was expected to come into force by January 2007.

The latest development on the FTA this month reveals that negotiation doesn’t look too good:

NEW DELHI, NOV 30: Asean has given a jolt to India by deciding to almost double its negative list for the proposed free trade agreement (FTA) with India.

“The negative list which they gave us in August was 2,700 which, after subtracting the overlapping items in the country-specific list, came to a consolidated figure of 600. But on November 17, they came up with a revised list of 6,900 which amounts to a consolidated list of 1,000 plus,” commerce secretary GK Pillai told media on the sidelines of the International Chamber of Commerce of the World Council Meeting here on Thursday.

I’m unsure what ASEAN is trying to do by increasing the size of its list but the increase is unfair to India, especially when the India has been trying hard to reduce the list length, though admittedly, I myself prefer to see a much shorter Indian list; I prefer a more liberal market for both sides with almost no exclusion list at all. But when the Indian proposes something like:

Ramesh [Indian Minister of State for Commerce] added that India will not compromise the interests of its farmers by pruning the list. India’s negative list of 560 does not include palm oil, pepper and black tea on which the country has proposed to gradually bring down duties to 50 percent.

I think we shouldn’t call this agreement as an FTA. A 50%-tariff is still way too high, no matter what the initial level is. Perhaps, the reason why ASEAN increases the length of its list is due to frustration. I’d be frustrated too if I were in the negotiation, looking at a “liberalized” market with a 50%-tariff staring back at me.

This latest development looks very different from the optimism we all saw back in early 2005:

KUALA LUMPUR, Mar 28 2005 India and Malaysia are on the verge of signing a comprehensive economic co-operation agreement by year-end. It will include free trade between the two nations.

The signing may be done during a visit by Indian Prime Minister Dr Manmohan Singh to Malaysia in December.

Indian High Commissioner to Malaysia R.L. Narayan said both sides had worked hard on the matter following Prime Minister Datuk Seri Abdullah Ahmad Badawi’s visit to India last December.

In the past three months, they have charted a “road map” of the broad parameters of the agreement.

Let’s hope the negotiation won’t end here because prosperity comes from trade, not isolation.

Apart from India, Malaysia, as far as I know — on its own or as part of ASEAN — is in FTA negotiation with Australia, Chile, Pakistan, People’s Republic of China, South Korea and the United States. There’s rumor of a Malaysia-Canada FTA but Canadian officials have ruled them out, at least from the next one or two years.

Categories
Economics Environment Kitchen sink Liberty

[983] Of let us be honest

Let’s be honest to ourselves this once.

You can’t expect more subsidy and expect taxes not to go up.

You can’t expect the government to give you everything and not expect taxes to go up. You can’t both have your cake and eat it too. Well, George Carlin might disagree but he’s a comedian.

C’mon.

You really want to satisfy your conscience by helping the poor by using somebody else’s money.

And c’mon.

You are more interested in jealousy rather than wealth inequality.

Let’s be honest.

You can’t expect others to grant you justice when you commit injustice to others.

You can’t expect to conserve your liberty if you would violate others’ liberty, every single chance you had.

Honestly, freedom is a two-way street.

You can’t expect a person to respect you when you disrespect others. Respect is reciprocal.

You really can’t expect people to trust you when you lied to them. Trust is reciprocal.

Let’s be honest. Let’s be true to ourselves this once.

You can’t prove that a supreme being exists. Or do not exist for that matter. You may believe or disbelieve in but but knowing and believing are two very different verbs. For all we know, theists and atheists are fighting over something that both of them can’t prove.

What does honesty mean to you?

How is it that your religion claims to monopolize everything that is good in this world but seems to produces only hate?

Let’s be honest. Goodness is larger than religion.

Be honest.

Could you advocate racism but in the same breathe, talk of unity across communal groups? How honest could you answer that question?

Be honest.

Do you call a person as racists but unwittingly realize that you’re a racist too?

Be frank.

Do you sway freely with populism or do you stand firm with your priciples? Have a backbone for once. Please.

Be true to yourself. In your little heart, answer this.

Do you really think you could consume everything today and still expect there’s something left for tomorrow?

And let be honest this one time.

As far as this entry is concerned, honesty is a cliché.