Categories
Economics WDYT

[2860] Guess the 3Q17 Malaysian GDP growth

The Malaysian GDP has been growing strongly so far this year. So strong, that a lot of economists and institutions had to revise their 2017 projections significantly.

The growth has been partly due to consumption recovery that took a tumble thanks to the GST, and partly due to strong trade figures (though this is true for the second quarter only). You can see the actual contribution of each component to the GDP below:

Industrial production rose about 6.0%-6.8% YoY in the third quarter, which is quite respectable. The September numbers are not out yet but I do not expect it to be bad. The fourth quarter could be a different story with all the major flooding happening, especially in Penang which is an industrial powerhouse in Malaysia. And we are not yet done with November. I am unsure how the major Penang industrial spots are affected but it does not seem like the disastrous Bangkok-style 2011 flooding. But at the very least, several production days could have been affected just because of labor and commuting issues.

This monsoon season feels stronger than usual but I probably should look at the rainfall data first before making that statement. Unfortunately, data at the Met Department is… not really forthcoming. But this is one negative impact of climate change on GDP growth. Addressing climate change for Malaysia might not be easy since our emission contribution is not big compared to other countries, but we can do our part by keeping our jungle healthy and perhaps, institute a carbon tax or at least a tax on petrol.

Trade figures continue to be outrageously strong. Total trade has been growing at double digits since December last year. There is no temporary “base effect” and instead there is a level shift, as you can see in the second chart. More relevantly, net exports are strong too.

You might say, “but these are in nominal prices!” Well, the same level shift is also visible in export and import indices that strip price effect out. So, it is real (Get it? Did you get it?).

But the double-digit yearly growth on the nominal part will not last, and so this I agree with Mr Econsmalaysia. Eyeballing the levels, December sounds like the time when the double-digit growth phenomenon will end. But, that also means, Penang flooding notwithstanding, trade would likely have a positive effect on the GDP in the fourth quarter.

Anyway, the labor market and core inflation appear stable despite the relatively strong GDP growth so far this year. Meaning, no overheating yet.

The Department of Statistics will release the GDP figures on Friday. So…

How fast do you think did the Malaysian economy expand in 3Q17 from a year ago?

  • 4.5% or slower (10%, 1 Votes)
  • 4.6%-5.0% (10%, 1 Votes)
  • 5.1%-5.5% (20%, 2 Votes)
  • 5.6%-6.0% (40%, 4 Votes)
  • 6.1%-6.5% (20%, 2 Votes)
  • Faster than 6.5% (0%, 0 Votes)

Total Voters: 10

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Categories
Society

[2747] Food racism: It still stinks!

I think a lot of us Malaysians have engaged in those long never-ending debates about racism before. The problem with these debates is that they are framed within the context of Malaysian citizenry and more often than not, they ignore the universal value of equality across the human race. This gives rise to hypocrisy among those who believe in equality among Malaysians. They disapprove of racism against Malaysians, but have no problem practicing it against foreigners.

I write this as a reaction to the proposal in Penang to ban foreigners from becoming cooks in that state. I find the rationale behind the proposal extremely flimsy: the state government wants to preserve food authenticity. It is about protecting Penang heritage.

This assumes cooking styles and recipes cannot be learned, with cooking being an innate special ability. It assumes there is something special about Penang people cooking Penang cuisine.

But the reasoning should be deconstructed to its logical end, right up to its building blocks. If we are worried about food heritage, then perhaps some Malaysians should be banned from making some Malaysian food.  Chinese cooks should not be allowed to make Malay food. Malay cooks should not be allowed to prepare Indian food. Run the logic of innate cooking ability for every single ethnic group and see if you like the results.

The differentiation between Malaysian and foreign cooks is just a pretty veneer hiding the ugly prejudice. One might argue there is a difference between racism and anti-immigrant sentiment: we are not discriminating against a race but against immigrants in general. But deep down there beyond artificial categorizations, is there really a difference between racism and xenophobia? Both definitions have more than a tinge of prejudice in it. Xenophobia is just racism by another name, it smells just as stink.

Besides, the proposed ban will likely affect foreign workers from poor countries. What if the cooks are of European origin? Would we worship them as gods instead? That line separating racism from xenophobia looks thin and blurry, if there is even a line in the first place.

Additionally, around the internet, the question of hygiene has been raised to suggest foreign workers are dirty people and of poor health, supporting the proposed ban and more importantly, revealing a crasser form of racism. The counterpoint on hygiene is that if you have gone to any of the stalls in Penang manned by the locals, you would conclude hygiene is not a priority of those hawkers. I definitely concluded so when I ate my noodles and cendol on Macalister Road in George Town recently.

I am not a good cook myself but I did try cooking when I was away as a student abroad. It appears to me that you can learn cooking and what makes it good is practice. I do not practice my cooking but I am quite certain if you learn and practice something, you will be good at it. If you intend to work as a cook, then you will need to go the extra mile to be good at it.

After all, we have Chinese Malaysian cooks making relatively good roti canai on Goulburn Street in Sydney. Does that make it less authentic? I ate the roti canai anyway and ordered another. I am sure there are more examples of that in Malaysia and all around the world. If we truly bought into the point about food authenticity and heritage, then these Malaysians should be condemned for cooking something belonging not to their ethnic heritage. But we do not.

In fact, a lot of us are proud of them for spreading Malaysian culture abroad. And for those of us who travel, sometimes we miss the food from home and we are thankful we can find Penang food just around the corner in Chicago, for instance. Some of us cannot eat anything else but Malaysian food even after years of living abroad, mixing only in Kampung Malaysia in London and elsewhere, which is a bit worrying but let us not go there for now.

So, why would it be okay for Malaysians to cook Malaysian food but not foreigners? Simple. We advocate equality among Malaysians, but to hell with others. In my books that prejudice comes close to racism.

At the end of the day, the judge is the customers. If they like you, they will patronize your stalls or restaurants, paying you good money for a good meal. If you are a bad cook, whoever you are, Malaysian or not, the photo-snapping hungry crowd will not visit your establishment all too often. We do not need the government to tell us we cannot buy food from certain parties. We can decide that ourselves.

The Penang proposal is not the only example of that kind of racism. When the Federal Territory Minister wanted to ban the homeless and soup kitchens from the Kuala Lumpur city center, civil society stood up against him and all the state machineries under his control. In defending the proposal, among others, the minister said most of the homeless and beggars were foreigners anyway (not true because based on news reports, City Hall ”relocated” 965 homeless persons in 2013, with about 13 per cent of them foreigners). In his imagination, that makes the proposal more palatable. Since the homeless were foreigners, he thought he could do whatever he wanted, forgetting that foreigners are human beings too.

And this does not stop there. Some of us think immigrants are lesser beings. That is why we abuse them. How many times have we heard of foreign maids abused in Malaysia? Some of us want them out completely, putting all kinds of blame on immigrants, regardless whether it is true or not. Low wages? Immigrants! No jobs? Immigrants! Rising crime rate? Immigrants! Low women labor participation rate? Immigrants!

Of course, really, they do not mean all immigrants and definitely not those under the Malaysia My Second Home program. Oh no, not the so-called high-skilled workers. Just immigrants from certain poor countries.

Citizenship grants us certain rights, but that does not make non-citizens less human. They bleed red too, like Malaysians.

Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved
First published in The Malay Mail on July 17 2014.

Categories
Economics Politics & government

[2676] Investment growth is volatile, a slowdown is not necessarily extraordinary or worrying

Some parts of the economy enjoy stable growth rates in normal times. Consumption and government spending are two of the GDP components which grow in a stable manner, unless there is a recession. As much as ridiculous as it may sound (yeah, that is the libertarian in me speaking out), the government does plan its expenditure and that is one of the reasons for smooth government expenditure growth. The same with consumers and others in the private sector too.

Export and import growth rates are stable too, although it is more volatile that the consumption component.

The same cannot be said with investment. It is a stylized fact in macroeconomics that the investment component of the GDP is wildly volatile. It is by far the most volatile of all GDP components. In one period it could reach for the sky and in the next, it could be six feet underground.

Here is a chart to show exactly how volatile investment is compared to other components of the real GDP of Malaysia:

Malaysia RGPD Component 2006-2012

The volatility of GDP investment component (truly, it is gross fixed capital formation) will be mostly true for other countries as well.

So, anybody who wants to score a political point cannot really score a political point if investment in one period slowed drastically. It is the nature of the series. It is just how the economy works.

I write this because the Penang state government has come under criticism because investment into the state has fallen dramatically.[1] Given the context of volatility and investment, I would not take the criticism too seriously.

Now the investment figures referred to are not strictly the real GDP investment component (the one that is of controversy is the approved investment figures), but the nature of volatility is the same anyway.

Slow investment growth may be a worry but only if there is a significant slowdown in the sense that there is structural break. In other words, something like if the average investment growth from 2005 to 2010 is significantly lower than the average from 2001 to 2005. In contrast, if investment growth in 4Q2012 is significantly lower than in 3Q2012, or even if 2012 as a whole is lower than 2011, I do not think one can say much without further context: from the series itself without further context , an investment growth slowdown or even an outright investment slowdown gives out no real story.

Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved
[1] — GEORGE TOWN: A DIP of 73 per cent in investment flow into Penang has the state Barisan Nasional questioning the state government’s abilities to drive and continue growing the manufacturing and services sectors. Both sectors, state BN committee member Ong Thean Lye said, were the main sources of revenue for the state and had in previous years placed Penang at the top in the country’s investment ranking. However, there were now growing concerns that investments were on the decline with Penang only getting RM2.47 billion in investments last year compared with RM9.11 billion in 2011 and RM12.24 billion in 2010. [Looi Sue-Chern. Harvard’s Gopinath Helps France Beat Euro Straitjacket. New Straits Times. March 22 2013]

Categories
Politics & government

[2551] Class is something DAP supporters can learn from Tunku

I am disappointed at the treatment which Tunku Aziz received with respect to his comment about the Bersih’s sit-in. It is quite clear the DAP-led Penang state government ended Tunku’s senatorship to punish him for criticizing the sit-in.

While I disagree with Tunku’s position and I do support the sit-in, the path taken by the state government is utterly disproportionate to the issue at hand. It reveals immaturity of those in power in handling disagreement over what I see as a minor issue. Worse, it suggests some kind of intolerance towards differences of opinion.

Some differences may require severe punishment. The case of Hasan Ali in PAS is a perfect example where there were severe differences that translated into actual actions that caused real unrest and consternation among the populace. Hasan Ali appeared determined to weaken the state government.

In the case of Tunku however, this is really the first real public disagreement. Furthermore, the disagreement is over something that cannot be turned into action. What could the Tunku do as a senator? To be sure, nothing as nearly as severe as what Hasan Ali did. And Tunku has no intention to bring down the state government or break the unity of Pakatan Rakyat coalition.

Another disappointment is the naivety on the part of the state government. It is pure foolishness to peg Tunku’s senatorship to his take on the sit-in. The result of the pegging has now raised questions about DAP’s commitment to free speech. That opens DAP to attack unnecessarily, especially when the general election is just around the corner. Now that Tunku has decided to quit the party, the DAP finds itself in a deeper hole dug by the party itself.

Among these disappointments, there is an insulting opinion floating around accusing Tunku as an UMNO mole.

What is this? Prior to this, the man was praised as the hallmark of integrity. Now, the man has none?

The DAP-led state government is a mistake. DAP supporters and sympathizers need to realize that. Step out for awhile and see the larger picture.

Instead of that they are leveling an outrageous accusation against a gentleman that is Tunku.

What is this? How is this filth any different from the slime UMNO is employing?

Have a bit of class. Now, class is something they can learn from Tunku.

Categories
Economics

[2024] Of stimulus may be hurting recovery

I am holding the view that the RM67 billion government spending-based fiscal stimulus as announced will not be helpful. The market will show a swing independently of spending.

The swing is already happening in spite the fact that government spending has been insignificant so far. Furthermore, the magnitude of government spending is pale in comparison to the drop of external demand. If there is to be any recovery, it will be driven by external demand, just as the recession has been caused by external demand. All this makes the government spending-based stimulus irrelevant.

Due to temporal issue between the effectiveness of the spending and market cycle, when proper recovery takes places, private firms will suffer from crowding out effect since the stimulus is financed through local sources. Interest will have to go up higher when compared to a situation where there the size of government spending is absent.

Well, I might be wrong. My position is too kind. There is a piece yesterday that may indicate that the stimulus is hurting recovery:

GEORGE TOWN: Penang’s electronics industry is facing a shortage of production workers after orders started to pick up early last month, according to a job outsourcing company.

The problem is compounded by local workers who prefer to enrol instead in the government’s retraining scheme where they are paid more, said Inter Resources Consulting Global Search (M) Sdn Bhd managing director Michael Heah.

He said locals were not keen to work long hours in factories for RM500 to RM600 a month, preferring the retraining scheme for unemployed graduates and retrenched workers where they were taught new skills and received a monthly allowance of between RM500 and RM800. [Penang electronics firms unable to cope with demand. The Star. July 2 2009]

Firms are actually competing — gasp! — with the stimulus package for labor, making them incapable of meeting demand in the short run.

How is that for a stimulus?

Worse:

Heah said the electronics industry started to recover last month with the semiconductor and consumer electronics sector stepping up their recruitment drive to get more locals to fill vacancies.

”To make matters worse, the intake of foreign workers has been frozen. We appeal to the Government to lift the freeze in the sector,” he said. [Penang electronics firms unable to cope with demand. The Star. July 2 2009]

Unless productive firms can find individuals that are not enrolled in the retraining program, they will need to raise wages.

I am a fan of raising wages only to accommodate inflation, to compensate improvement in productive for the labor factor of production or competition from firms for labor.

I see none of those here. That potential raise of wages may be caused by distortion created by the government, more than anything else.