Categories
Economics

[2592] The stimulus was not the cause of the rebound

Economist Nor Zahidi Alias at Malaysian Rating Corporation wrote in The Edge Financial Daily today that there was too much concern for the fiscal deficit. I will accept that (while I am concerned about the deficit, concerns shown by the public  is overly excessive, especially about the debt limit) although I do still believe the government revenue should aspire to reduce its deficit in the long run.

But I am writing here not to discuss about the deficit per se, but rather an assertion by him that:

In Malaysia’s case, its budget shortfall widened to 6.7% of GDP in 2009 as the government implemented measures to avert deeper economic contraction. As a result, the economy rebounded strongly by 7.2%, whilst revenue growth accelerated by a double-digit pace by 2011. At the same time, the budget deficit as a percentage of GDP narrowed to 4.8% in 2011 from 5.4% in the preceding year. [Nor Zahidi Alias. Budget shortfall no cause for sleep deficit. The Edge Financial Daily. September 5 2012]

First, a small issue of clarification. The economy grew by 7.2% in 2010. Government grew by 16% in 2011. I think the langauge can be a bit confusing.

Now, to the beef. I am disagreeing with the causality cited here. The author wrote that as a result of government spending in 2009 or really, the stimulus, the economy rebounded strongly in the following year.

In 2010, real government spending in real terms slowed to 2.9% from 4.9% in 2009. The economy did rebound in 2010 but given the trend in government spending, it is really hard to attribute the 2010 rebound to the government. This is especially so when government spending typically formed only 11% of total real GDP.

How about gross fixed capital formation (i.e. investment) of the public sector? It grew by 2.9% in 2009 and 5.0% in 2010. The 5.0% is more or less the typical growth in the immediate years before the recession.

In fact, the first three quarters in 2010, GFCF by the public sector contracted. Only in the last quarter of the year did it grow by 34.7%, which was huge. If GFCF had not grown at all in that quarter, overall real GDP growth would have still grown by about 6% in 2010. If the GFCF had contracted at about the same average magnitude in the earlier three quarters, the economy would have still rebounded. So, clearly, the source of the rebound came from somewhere else, not the stimulus.

One might try the multiplier story but given how late the stimulus came, I doubt it, along with the stimulus, really was relevant.

Truly, private consumption and private GFCF growth recovered before the stimulus really came into force. Private consumption registered year-on-year shot up by the first quarter of 2010 and private GFCF registered its first growth in the last quarter of 2009. Both happened well before the stimulus had a chance to act. If one compares the numbers on quarter-on-quarter basis, one will realize that the recovery came even earlier.

So, I cannot agree with Nor Zahidi’s assertion that the 2010 economy rebounded strongly because of the stimulus. The numbers do not show that.

 

Categories
Society Sports

[2591] Sports and unity are false friends

It is always nice to watch Malaysians from across the spectrum uniting and cheering behind a Malaysian athlete or team in competitive sports at the international level.

That more or less happened when the number one national badminton player Lee Chong Wei was up against Lin Dan of China at the London Olympics. He failed to get Malaysia’s first gold medal but that did not deter the “I’m proud to be a Malaysian” sentiment among Malaysians.

Sports does sometimes give that warm feeling that we all live under the same brilliant, tropical sun. It can emphasize the common bonds that we share as Malaysians. It is that same feeling that has pushed the idea that sports should be supported further to unite Malaysians in times when our society appears so divisive in so many ways.

Yet, call me a skeptic. While there may be various reasons to support the development of sports further, I do not believe unity should be the driving factor in doing so.

I am skeptical of the value of sports as a substantive unifying factor for Malaysians. It is overrated as a unifying tool.

The reason I believe so is because the ability of sports to unite us is at best superficial. It is more or less effective only during the duration of the match. If we are lucky, then the feel-good atmosphere can last several days after, before we direct our attention to the next issue or event of the day.

Sports can make us temporarily forget our real world problems. That respite can be good for our health. We do need a break from time to time but that is all that it really is — a break and nothing more. Once the game is done, each of us will go our own way.

Sports just does not suddenly make us come to realize, “Hey, we are all Malaysians and so let us hug each other, and be best friends ”¦ forever.”

That kind of logic should be left in the essays of young schoolchildren as they develop their writing skills. It makes cute narrative but unfortunately, it is naïve to expect a child’s narrative to dictate the complex real world.

We do not live within school classroom settings. We are not children and unlike most children, we are not forgetful of past wrongdoings and conflicts, for better or for worst. As proof, some of us are still stuck with the May 13 incident which occurred more than 40 years ago.

Malaysia as a whole will likely move on with respect to the issue only once the generations that identified with that incident are gone and replaced by younger generations unburdened by the hangover of yesteryear.

We will go our separate ways because sports solve nothing of importance in the way we live our lives and deal with our differences. As such, old divisions will remain and we will continue to squabble over it.

Meaningful unity can only be achieved through equitable resolution to real problems and differences that we face as a society. The unfortunate thing is that problems are aplenty and it will take a very long time before we can even take a substantive step forward.

We need to have hard, sober, open and long discussions and debates on all of these problems.

We cannot run to sports to forget our problems and expect the temporary respite from our divisions to last. Sports are no refuge from our deep divisions. It is just but a wooden, creaky hut.

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 Sun on August 31 2012.

Categories
History & heritage Photography Travels

[2590] False door at Angkor Wat

Here is a typical pattern used on a typical richly ornate false door. Given how various temples were built sometimes a century apart, I found the commonness as mildly surprising. It suggests innovation was really slow.

Some rights reserved. Creative Commons 3.0. By Attribution. By Hafiz Noor Shams

But it is pretty nonetheless.

This is at Angkor Wat.

I am unsure of its functions but my readings tell me that an actual door typically face east and the other false doors face the other three cardinal directions.

Categories
History & heritage

[2589] How old is Malaysia again? A layman generalization attempt

Since it will be August 31 soon, I think I want to further develop my thinking about the 55 versus 49 years old debate, i.e. how old is Malaysia?

I have shared opinion on the matter a number of times over the last, probably six years. I was September 16, before there was September 16 (kidding, don’t shoot me). Now, I want to generalize my framework on the matter.

The debate does matter in terms of historical accuracy and its logical implications are huge (honestly though, in the immediate every day, the debate is pedantic but fun nonetheless). For instance, if you understand Malaysia to be born in 1963 and that Malaysia does not exist prior to September 16 1963, then Malaysia was never colonized. What were colonized were the lands that modern Malaysia now encompasses. I think this is a strict observance of definition but many are not really interested in such strict observance.

In fact, many would ridicule that strict observance. When historian Khoo Kay Kim said that Malaysia was never colonized by the British because technically, the lands that came to form Malaysia under the British were protectorates, many thought he was crazy. But technically, he was right though those lands for all intents and purposes were colonized.

So, to many, Malaysia was colonized in the past. Not too many differentiate the history of modern Malaysian state (the 1963 federation) from the history of its member states. Really, if you read history from the perspective of the land instead of the state as an institution, there is no difference between the history of Malaysia and the history of its member states. I do think the history of the land is the lens which most Malaysians see the history of Malaysia.

The proper way to understand history is to consider each state on its own terms but at the same time, take the history of the land as continuous, whatever states that existed in the relevant period (also, history is “borderless“, i.e. one cannot apply modern boundary into the distant past in the reading of history). This allows for consistent and technically precise understanding of history but also allows for the appreciation of history in its widest, complete context. Call it the state-land dichotomy; same-same but different, or so the Indochinese would say.

While it is a dichotomy, the understanding of both is crucial. One obviously cannot understand modern Malaysian history without understanding pre-1957 history of the land.

For instance, how does one understand modern conservative Malay psyche that is a major factor in contemporary politics without knowing the history of Malay sultanates?

Also, history of foreign lands are important as well. But that would digress from my point and so, Iwill stop here as far as foreign lands are concerned.

So, according to the state interpretation, Malaysia is 49 years old. According to the land interpretation, Malaysia the land is, well, I do not know how old Malaysia is. It cannot be 55 years old because the land existed in 1956. In fact, this land has existed since time immemorial.

The third interpretation, which probably an amalgamation of the dichotomy into one, is that all those states or institutions that existed are intertemporally related states that should be taken collectively as the same state from modern point of view (as seen from the current state, which is taken as the successor of previous related state).

This has been the argument that supports the idea that Malaysia is 55 years old. But there is inconsistency here. If these institutions are really the same, why accept 1957 as the beginning? What about 1948 when the Federation of Malaya was formed? What about 1946 during the Malayan Union? There are other dates but it all leads to the same question: when did the first institution was formed? Do we need to go to all the way to Srivijaya’s time? All the way to the beginning of Kedah? I see third interpretation as eventually approximating the land interpretation.It will not have the time immemorial conclusion but it will go far enough into history that it really does not matter to contemporary life.

I know monarchists do take this interpretation in some way, by basing the “Malaysia” institution as the office of the Agong. Since the office of the Agong was established in 1957, then Malaysia is 55 years old. That intepretation does logically lead to the number 55, but I do not subscribe to that. I do not see how the office of the Agong is the state. The state does not take its power from the Agong. The office of the Agong is merely an institution within the state.

Perhaps, the question is not how old the state is but rather, it is a question of independence: how long has the current state been independent? This sidesteps the reference to 1948 or earlier dates. Unfortunately, it suffers from controversial Malayan bias: Sabah and Sarawak (and Singapore) attained independence in 1963.

But whatever it is, something happened on August 31 1957. The Federation of Malaya, formed on January 31 1948, became independent.

Categories
Pop culture Sports

[2588] I love you Denard

Four more days!