Categories
Economics

[2707] A quick take on 2Q2013 GDP: it’s all government spending!

Malaysia’s GDP grew 4.3% YoY in the second quarter of 2013, slightly faster than 4.1% YoY in the previous quarter.

While it is faster growth, I find the numbers worrying because if it was not for government spending, overall growth would have been much worse. Investment growth was down, private consumption was down and exports contracted.

The government spending was just because of electioneering. Election saved Malaysia. Really (This can be confusing since federal government spending actually decreased from a year ago. Yea, I was surprised to find that out. The GDP government spending includes non-federal government spending. Please take note of that).

The good news is that, I think things will be brighter from now on. Investment should increase because there is more political clarity moving out of the second quarter.

I also think exports will improve, for reasons I have written previously.

Categories
Economics WDYT

[2706] Guess the 2Q2013 GDP growth!

It is that time again. Malaysia’s Department of Statistics will release the second quarter GDP figures on August 21. Growth in the first quarter was 4.1% YoY no thanks to eroded trade surplus. Domestic demand however held up well and prevented the growth figure from being worse.

The situation on the trade surplus front has worsened tremendously over the second quarter. In fact, some private economists are fretting over the possibility of Malaysia experiencing its first trade deficit in a long time as exports have been doing really bad.

I think exports will improve in the second half of the year. Imports of intermediate goods have grown faster in June while imports of capital goods contracted less badly. I think these figures say something about future exports since Malaysia re-exports a lot of its imports.

In any case, there are some indications that domestic demand growth finally slowed. I have some expectations that bad news on the external front will affect domestic demand. It has not happened so far but we will see soon how domestic demand grew in the second quarter.

The upside is that government spending could prove to be an important driver of growth in this quarter, mostly because it was an election quarter. For the same reason, investment might grow slower.

There is also base effect to worry since in the 2012 second quarter, growth was 5.6% YoY. While it is a mathematical artefact, it does highlight how hard it is for the GDP to grow faster than it did previously, especially in this kind of environment. This is a case for somebody to develop seasonally adjusted GDP, but that is another story for the wonks.

Ultimately, I expect growth to be about the same as last quarter, if not worse. I will be surprised if growth is anything greater than 4.5% YoY. What about you?

How fast do you think did the Malaysian economy grow in 2Q2013 from a year ago?

  • Above 5.0% (6%, 1 Votes)
  • 4.5% to 5.0% (18%, 3 Votes)
  • 4.0% to 4.4% (35%, 6 Votes)
  • 3.5% to 3.9% (18%, 3 Votes)
  • Below 3.5% (24%, 4 Votes)

Total Voters: 17

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Categories
Society

[2705] A retreat from openness

There was a time when we only heard or read news of strangers becoming victims of crime. It was easy to shrug off the news because the victims were strangers. Somebody would cry for them but that somebody would not be us. We would just go on with our lives and worry about other things that were not at all worrisome. We would have to be very, very unlucky if we made it into the news ourselves.

Those days have receded into the background. It is starting to feel that it does not take random luck anymore to become a victim. We need to take active steps instead to prevent ourselves from becoming one.

In response, I think our society is becoming more reclusive than before as we collectively try to avoid becoming victims ourselves.

The idea of becoming a victim of crime is not so foreign anymore. In the past, the victim would be two, three or more degrees separated from us. Nowadays, it is likely that most of us personally know someone who has become a victim. It could be our family, friends, neighbors or colleagues.

That is definitely true in my case. While I have not become a victim myself, I know friends — not mere acquaintances — who have become victims of crime in recent years. One of them was robbed at knife-point after being taken for a ride in a cab some months ago. Thankfully the perpetrator was later apprehended and sentenced swiftly, but only after he raped a tourist.

Another almost lost his pinky while defending himself in a robbery. Yet another was beaten up and had his car taken away from him.

The whole experience is disconcerting. It is a feeling of you standing in the middle of a crowd and everybody surrounding you being eaten by wolves. Long ago there were lots of people and strangers especially between you and the wolves. Today, you can almost see the wolves themselves. It is too close for comfort.

However, the men and women of transformation try to convince us that it is merely a matter of perception — no thanks to the social media which is unhelpfully amplifying the fear as they would say — you get the feeling that you will be next. Rightly or wrongly, it gives out a sense of fatalism. It is not a matter of if. You only need to ask the wolves when.

While it is easy to be apathetic when a stranger has her handbag snatched or his house broken into, it is almost impossible to remain indifferent when your loved ones become victims. If it happens often enough, we will begin to take action on our own.

Some of us have. Looking around the city, the word ”some” is an understatement.

The first to come up noticeably were the boom gates and fences surrounding our neighborhoods in the suburbs. Along with private security services, residents put them up to deter home invasions. Sometimes, when I find myself inside one of those overzealous neighborhoods, I feel as if I am in a fortress, as if the world outside comprises of barbarians to be repelled and kept out.

The truth is that the security measures keep more than potential criminals out. Passing through these checkpoints can be a hassle. As we put them up, we will likely get fewer of the good kind of visitors in the process. In effect, we retreat inside our four walls.

Some of us have guns on ourselves. In the news some weeks back, a ”˜Tan Sri’, while waiting to meet his doctor at a clinic in Cheras in Kuala Lumpur, managed to defend himself and others in the clinic against a gang of robbers by shooting at them. One robber died. This is a rare story of a person successfully defending himself. But I wonder, what is the implication of that?

Do we now need guns to protect ourselves?

I am a libertarian and libertarians usually demand the right to bear arms. While that is so, I think libertarians, or at least just myself, also have higher ideals and that is to live in an open society. Whatever the value of the right to bear arms, guns do have a corrosive effect on openness. I would not have the guts to walk the streets where everybody is armed to the teeth.

Yet, unfortunately, we do not need the right to bear arms to be in that situation.

This week alone saw more people getting shot. One of them, a prominent local banker, was shot dead in broad daylight in the middle of the city. And who can forget, just months ago, a top official of the royal custom was shot dead in the middle of Putrajaya. If these happen all too often in a country with supposedly tough anti-guns laws, public places would be dearth of life.

I know I am not nearly as important as some of the victims mentioned here. That probably means that I am not a target per se. Nevertheless, I would not want to be there when it happens to some important persons. Being an accidental witness cannot only be emotionally horrifying, the shooters may not like a person witnessing the crime.

If we make it there without being stabbed or shot at, our future will be a reclusive, untrusting society. The future is not fixed but the path we are taking right now leads towards that future.

An easy and safe response is to stay at home, be quiet and be reclusive. No adventure, no meeting up with strangers and not even walking on the street alone.

Already we jog in gyms and not in the parks. Even in the parks, if we do run or walk, when we come upon a stranger along the path, we will run a bit faster rather than smile and say, “How do you do?”

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 Online on August 4 2013.

Categories
History & heritage Liberty

[2704] Berlin on why fascists, nationalists and Marxists kill

This is most obvious in the case of Fascism. The Fascists and National Socialists did not expect inferior classes, or races, or individuals to understand or sympathise with their own goals; their inferior was innate, ineradicable, since it was due to blood, or race, or some other irremovable characteristic; any attempt on the part of such creatures to pretend to equality with their masters, or even to comprehension of their ideals, was regarded as arrogant or presumptuous. Caliban was considered incapable of lifting his face to the sky and catching even a glimpse if, let alone sharing, the ideals of Prospero. The business of slaves is to obey; hat gives their masters their right to trample on them is precisely the alleged fact — which Aristotle asserted — that some men are slaves by nature, and have not enough human quality to give orders themselves, or understand why they are being forced to do what they do.

If Fascism is the extreme expression of their attitude, all nationalism is infected by it to some degree. Nationalism is not consciousness of the reality of national character, nor pride in it. It is a belief in the unique mission of a nation, as being intrinsically superior to the goals or attributes of whatever is outside of it; so that if there is a confliction between my nation and other men, I am obliged to fight for my nation no matter at what cost to other men; and if the others resist, that is no more than one would expect from beings brought up in an inferior culture, educated by, or born of, inferior persons, who cannot ex hypothesi understand the ideals that animate my nation and me. My gods are in conflict whit those of others, my values with those of strangers, and there exists no higher authority — certainly no absolute and universal tribunal — by which the claims of these rival divinities can be adjudicated. That is why war, between nations or individuals, must be the only solution.

We think, for the most part, in words. But all words belong to specific languages, the products of specific cultures. As there is no universal human language, so there exists no universal human law or authority, else these laws, his authority, would be sovereign over the earth; but this , for nationalists, is neither possible nor desirable; a universal law is not true law: cosmopolitan culture is a sham and a delusion; international law is only called law by a precarious analogy — a hollow courtesy intended to conceal the violent break with the universalism of the past.

This assumption is less obvious with the cases of Marxism, which in theory, at least, is internationalist. But Marxism is a nineteenth-century ideology, and has not escaped the all-pervasive separatism of its time. Marxism is founded on reason; that is to say, it claims that its propositions are intelligible, and their truth can be ”˜demonstrated’ to any rational being in possession of the relevant facts. It offers salvation to all men; anyone can, in principle, see the light, and denies it at his own peril.

In practice, however, this is not so. Theory of economic base and ideological superstructure of which Marxist sociology is founded teaches that the ideas in men’s heads are conditioned by the position occupied by them, or by their economic class, in the productive system. This fact may be disguised from individual persons by all kinds of self-delusions and rationalisations, but ”˜scientific’ analysis will always reveal that the vast majority of any given class believe only that which favours the interests of that class — interest which the social scientists can determine by objective historical analysis — whatever reasons they may choose, however sincerely, to give for their beliefs; and conversely they disbelieve, reject, misunderstand, distort, try and escape form, ideas belief in which would weaken the position of their class.

All men are to be found, as it were, on one of two moving stairs; I belong to a class which, owning to its relationship to the forces of production, is either moving upwards towards triumph, or downwards towards ruin. In either case my beliefs and outlook — the legal, moral, social, intellectual, religious, aesthetic ideas — in which I feel at home, will reflect the interests of the class to which I belong. If I belong to a class moving towards victory, I shall hold a realistic set of beliefs, for I am not afraid of what I see; I am moving with the tide, knowledge of the truth can only give me confidence; if I belong to ta doomed class, my inability to gaze upon the fatal facts — for few men are able to recognise that they are destined to perish — will falsify my calculations, and render me deaf and blind to the truths too painful for me to face. It follows that it must be useless for members of the rising class to try to convince members of the falling order that the only way in which they can save themselves is by understanding the necessities of history and therefore transferring themselves, if they can, to the steep stair that is moving upwards, from that which runs so easily to destruction. It is useless, because ex hypothesi members of a doomed class are conditioned to see everything through a falsifying lens: the plainest symptoms of approaching death will seem to them evidence of health and progress; they suffer from optimistic hallucinations, and must systematically misunderstand the warnings that persons who belong to a different economic class, in their charity, may try to give them; such delusions are themselves the inevitable by-product of clinging to an order which history has condemned. It is idle for the progressives to try to save their reactionary brothers from defeat: the doomed men cannot hear them, and their destruction is certain. All men will not be saved: the proletariat, justly intent upon its own salvation, had best ignore the fate of their oppressors; even if they wish to return good for evil, they cannot save their enemies from ”˜liquidation’. They are ”˜expendable’ — their destruction can be neither averted nor regretted by a rational being, for it is the price that mankind must pay for the progress of reason itself: the road to the gates of Paradise is necessarily strewn with corpses. [Isaiah Berlin. European Unity and its Vicissitudes. 1959]

Categories
Economics

[2703] TPP neutralizes trade diversion caused by other existing trade agreements

Joseph Stigliz argues that the Trans-Pacific Partnership (TPP) will disrupt pre-existing efficient Asian supply chain.[1] That essentially suggests that the TPP creates trade diversion away from non-TPP Asian countries. While this argument is true if it stands in isolation, it is not applicable for Malaysia.

This is because Malaysia already maintains free trade deals with major Asian economies. Either through bilateral means or through Asean, Malaysia has free trade agreement with China, India, Korea and Japan among others (also, Australia), never mind that Malaysia is also a part of Asean Free Trade Area. Combined, they are Malaysia’s major Asian trade partners. Other Asian export destinations are small compared to the combined exports to the aforementioned countries. Major trading Asian countries also have multiple free trade agreements among themselves.

At the same time, Malaysia does not have an FTA with the US. With the TPP, Malaysia will.

So if anything, it is these Asian FTAs that Malaysia maintains which are creating trade diversion away from Malaysia-US trade, contrary to Stigliz’s assertion that the TPP will create diversion away from intra-Asian trade.

That means, if agreed upon and implemented later, the TPP will help in neutralizing some of the trade diversion Malaysia-US trade is suffering from. TPP makes diversion less of a factor and creation, more.

Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved
[1] — In the case of the TPP, there is a further concern. Asia has developed an efficient supply chain, with goods flowing easily from one country to another in the process of producing finished goods. But the TPP could interfere with that if China remains outside of it. [The Free-Trade Charade. Project Syndicate. July 4 2013]