Categories
Economics

[2800] What is the fiscal deficit status now?

Back in January, the official deficit projection for 2015 was revised up by the government to 3.2% of GDP from 3.0% due to the falling energy prices. I concluded then the new target was achievable if government revenue would increase by at least 1.2% YoY. It was a reasonable target eight or nine months ago.

Unfortunately, a lot of things have happened since then and that 1.2% YoY revenue growth does not look easy anymore. That means, the current deficit target seems incredible now.

I have updated my sensitivity analysis. I think the fiscal deficit this year will likely be around 3.5%-3.9% of GDP. I did a tighter projection for work but I can afford to cast a wider net here.

Below is a table of deficit-to-GDP, dependent on revenue and NGDP changes this year. I have highlighted several cells in red corresponding to my expectations.

2015 Fiscal deficit sensitivity analysis

The assumptions (projections?) are:

  1. 0%-2% revenue contraction
  2. 4%-5% NGDP growth.
  3. For government spending growth, I imputed 1.2% YoY into my model, which is the exact increase the government announced from its budget revision back in January. I do not expect any spending cut due to… hmm… some political imperatives and I suppose, Keynesian tendencies within the government. I am unsure how the Monday announcement would affect spending as details are scarce so far but my gut feeling says it will not matter.

The weaker revenue is mostly due to depressed petroleum tax collection, lower petroleum royalties and lower dividend. I am a bit unsure how other taxes, especially company and individual income taxes, will change. But what we do have is the first half data and individual income tax collection is already down by 33% YoY, partly, I guess, because of the earlier tax cuts. Company income tax collection rose strongly however, increasing 43% YoY but judging from earning reports so far, I think the second half will be very different.

The 1MDB Minister Prime Minister Finance Minister will table the government budget on October 23. We will know more then.

Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved
p/s — It would be interesting to compare current assumptions with past ones:

  1. My current expectation is based on 1.2% spending growth, 0%-2% revenue contraction and 4%-5% NGDP growth. These are part of the three assumptions listed above.
  2. Back in January 2015 during the revised budget, the assumptions were 1.2% spending growth, 1%-2% revenue growth and 4%-5% NGDP growth.
  3. The original 2015 official projection, shared in October 2014, was 3.2% spending growth, 4.5% revenue growth and 9% NGDP growth.

You can see the drastic change in projections and assumption since October 2014. Maybe a table will be clearer for comparison:

Malaysian deficit ratio target change

Categories
Politics & government

[2799] Singaporean silent majority are no Malaysians

PAP’s better-than-expected victory in Singapore has gotten BN supporters in Malaysia excited.

It tickles me to no end watching BN people looking into the Singaporean mirror and seeing men in white instead of their own reflection. They see the Singaporean reality and confuse it for a Malaysian one. Perhaps there is something wrong with the lens they wear for BN is no PAP and Najib Razak is no Lee Hsien Loong. And Singapore is no Malaysia.

Salleh Keruak, the unelected information minister, thinks otherwise. He believes the Singaporean election has proven a point about the silent majority defeating the noisy minority at the ballot box. He believes this will be the case for Malaysia and encourages the government to act as so.[1]

Former PM Mahathir Mohamed loved the argument when he was in power but in our last general election in 2013, there was no silent majority voting for BN. Did we forget 51% of us voted for Pakatan Rakyat, and that BN received only 47% for the votes? In fact I would even go farther and say the the silent majority argument has been irrelevant since at least 2008 because our society is essentially divided in the middle.

Will 2018 show otherwise?

I do not know and as a person who believes strongly in the need for institutional reforms (read power change at the federal level) instead of more investment in malls and condominium to boost the GDP, the dynamics involving PAS and the rural votes worry me. But the differences between Singapore and Malaysia are so big that there is a limit to how much the Singaporean experience is applicable to Malaysia. The minister’s confidence does not recognize that limit at all.

For one, Malaysia had no Lee Kuan Yew. His death sparked the politics of thankfulness much to the benefits of the PAP, never mind the nationalism in conjunction of Singapore’s 50th year as an independent state. What Malaysia has in contrast is Mahathir and he, unlike Lee, does not think highly of the incumbent government.

Furthermore, Singapore has no real scandal of its own. There were issues causing the PAP to lose some support back in 2011. But the party set out to address those concerns after that and apparently, sufficiently successful at doing so. This, I think, is the most important point that has been raised out there to rationalize PAP’s victory.

Malaysia? The sitting government has created more problem than it has solved. The power abuse and corruption concerns of 2008 have been amplified instead.

The minister and the proponents of the silent majority would do better if they compare and contrast the Malaysian and the Singaporean contexts closely. In fact, there is no guarantee those keeping quiet will vote for BN when the time comes.

Remember 2008?

The social media is not the best national barometer, but do not take the hostility in cyberspace to mean all is fine and dandy on the ground.

In Wangsa Maju, there is a big water pipe visible from the main road leading to Taman Melawati. On it written “Undur Najib. Kekal BN” in red paintIn Keramat, I am surprised Najib’s big poster on the UTC facade has not been vandalized yet. Maybe because there is a police station inside of it.

But talk to these Malays in Keramat, Kampung Baru, Kerinchi, Wangsa Maju and Setapak for instance. See if you will be celebrated as a superstar.

Mohd Hafiz Noor Shams. Some rights reservedMohd Hafiz Noor Shams. Some rights reservedMohd Hafiz Noor Shams. Some rights reserved

[1] — There may be thousands marching and screaming and demonstrating its displeasure. But there may be an even larger group that has no issues and do not share the views of this minority group of noisy protestors.

Politicians do not fear that noisy minority. What they fear is the silent majority because one never knows what the silent majority is thinking and what they will do come Polling Day.

The Singapore general election has proven this point. The noisy minority dominated the internet and the social media. They made it appear like they represent the majority rather than the minority. And the election result proved that the silent majority were not with the noisy minority.

Undeniably, in Malaysia as well the noisy minority dominates and monopolises the internet and the social media. In fact, many are intimidated and do not want to post their views on the internet because if you disagree with the noisy minority you would get vilified and insulted.

However, just like what happened in Singapore, the silent majority got turned off with what the noisy minority was saying on the internet and in the social media. They watched silently what was being said and the more the silent minority talked the more people were turned away. Sometimes overkill can work against you, like what the Singapore election has proven. [The noisy minority and the silent majority. Salleh Said Keruak. September 12 2015]

Categories
Humor Sports WDYT

[2798] Guess the scoreline for Malaysia-Saudi Arabia match

UAE scored 10 goals against Malaysia in the World Cup qualification. That is right. Ten against none. It is such a happy coincidence given the 1MDB and Najib scandals. It is UAE of all countries, the country which somebody sold Malaysia to.

But up next in the schedule, for September 8, is Saudi Arabia, which is probably as tough as UAE. So…

Malaysia versus Saudi Arabia. What will the result be?

  • Malaysia to win! (0%, 0 Votes)
  • A draw (0%, 0 Votes)
  • Lose by a goal or two (4%, 1 Votes)
  • Lose by 3-5 goals (22%, 5 Votes)
  • Lose by 6-10 goals (22%, 5 Votes)
  • Lose by 11-700,000,000 goals (13%, 3 Votes)
  • I have never taken these goals for personal gain (39%, 9 Votes)

Total Voters: 23

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Categories
Photography Politics & government

[2797] Is he still Prime Minister?

Late after midnight… on the wall of one of the buildings along Jalan Tun Perak previously filled with protesters in yellow.

20150830 Bersih4 (169)

Categories
Activism Photography Politics & government

[2796] The balloons of Bersih

In solidarity with the balloon girl…

KUALA LUMPUR, Aug 31 — Police have charged a woman who was detained earlier today for distributing Bersih 4 balloons at an upscale shopping mall here for allegedly attempting to stir some trouble, according to the suspect’s lawyer.

It is understood that Bilqis Hijjas, the daughter of prominent architect Hijjas Kasturi, has been charged under Section 504 of the Penal Code for ”provoking a breach of peace” by distributing the balloons at the Pavilion shopping mall in Bukit Bintang during the DiverseCity International Art Festival which Prime Minister Datuk Seri Najib Razak had attended. [Malay Mail”˜Balloon girl’ charged for handing out Bersih balloons. August 31 2015]

…here are the balloons of Bersih?

My favorite balloon is this big white fatso.

20150830 Bersih4 (12)

I am sorry for the up close and personal shot violating the balloon, but I was on my zoom lens and I thought I did not have enough time to switch to a more appropriate one. But it turned out okay.

And Tweety!!!

20150830 Bersih4 (13)

You see those normal yellow balloons? Yea, somebody got arrested for that.

And this one is a bit aggressive in a confusing way. A smiling bear with a potty mouth in need of a big soap.

20150830 Bersih4 (19)

I could not make up what it said, but bodoh is stupid in Malay. And Jibby is, well, Najib, our affectionate nickname for the Prime Minister.

And as the balloon bear danced in the wind, it turned around and… haha

20150830 Bersih4 (23)

Yea, angry bear. Too bad there were no angry birds.

Anyway, yea, you have to have these…

20150830 Bersih4 (123)

I have no more balloon picture, but if you do read up on Malaysian social media, you will know how magical this moment was, just 10 minutes before midnight:

20150830 Bersih4 (136)