More Malaysians fret over economy

(The Malaysian Insider) Malaysians are increasingly worried about their economy in the light of the global financial crisis and continuing political turmoil on the domestic front.

More than half of the respondents to a survey just conducted by the independent Merdeka Centre said they were worried about the prospects for the economy, a sharp jump from the 25 per cent recorded a year ago.

Fifty per cent of the 1,002 respondents said economic issues, such as price hikes, inflation and unemployment, were most important to them. Twenty-one per cent cited political issues as most important, up from one per cent when another survey was conducted in March.

Forty per cent of respondents also said they were “very dissatisfied” with the government’s performance on licking inflation and curbing price hikes, while 41 per cent were ‘very dissatisfied’ with its performance over the economy in general.

Bank Negara governor Zeti Akhtar Aziz warned yesterday that the country’s growth might be affected by the continuing financial crisis in the United States, adding that this was in its early stages.

She said that growth had become ‘more of a concern’ because of falling commodity prices coupled with the US crisis.

The Kuala Lumpur Composite Index, which reached an all-time high of 1,524 points in January, fell to 1,157 after the March elections, which saw the ruling Barisan Nasional (BN) coalition lose its traditional two-thirds majority in Parliament.

Earlier this month, the bourse tumbled to a two-year low of 963, and ended last week at 1,020.53.

The political turmoil, combined with the turbulence in the US financial markets, offered “not much hope” for the market to revive before year end, according to Stephen Soo, a senior analyst at local brokerage TA Securities.

“Investor sentiment is still weak and foreign funds have been pulling out of the market. The political scenario is definitely a deterrent to foreigners,” he added.

Yeonzon Yeow, Kenanga Investment Bank’s head of research, said the country’s economic outlook should be positive, given that the government had presented an economic development blueprint until 2010 under the Ninth Malaysia Plan.

But the continuing turbulence on the political scene has meant that the implementation of projects has been delayed. Prime Minister Abdullah Badawi has also come under intense pressure to step down after the BN’s poor showing in the general elections.

“The economy has been on a downtrend since the general elections. Political uncertainties result in economic paralysis. A lot of time is spent on politics instead of economics. That will slow down the whole process,” Yeow said.

A decision by Umno – the main component in the ruling coalition – to postpone party polls to next year will serve only to further prolong the uncertainty over the country’s leadership and economic situation, he added.

“For the market to revive by the year end would require some form of resolution on the political front,” he said.

But others were more sanguine about prospects, with an editorial in The Edge financial weekly saying that a “significant improvement in growth” was expected next year.

Indeed, the government still expects growth to reach 5.7 per cent this year, despite recent economic woes.

However, the Malaysian Institute of Economic Research – a government think-tank – has cut its growth projection for this year to 4.6 per cent, partly due to the domestic political turmoil. – The Straits Times

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Political crisis paralysing Malaysian economy, say analysts

(The Malaysian Insider) The political crisis in Malaysia since the March election that humiliated the ruling coalition, has stifled the stock market, deterred foreign investment and crimped growth forecasts.

And economic observers said that with Prime Minister Abdullah Ahmad Badawi still clinging on to power despite mounting calls for a speedy departure, there is no end in sight to the uncertainty.

Abdullah has said he may not seek re-election as the ruling party leader in internal polls next year, but the coalition also faces an unprecedented challenge from the opposition, which says it has the numbers to seize power.

The prospect of a messy change of government — the first in the history of Malaysia, which has been ruled by the Barisan Nasional coalition since independence in 1957 — is making investors very nervous.

The Kuala Lumpur Composite Index, which reached an all-time high of 1,524 points in January, dived to 1,157 shortly after the March elections. On Sept 18, the bourse plunged to a two-year low of 963, and ended last week at 1,020.53, in a malaise worsened by the stream of bad news from Wall Street.

“It has been on a downtrend since the general elections and we expect it to remain so as there are no signs that the political situation is easing,” said Stephen Soo, a senior analyst at local brokerage TA Securities.

He said the political turmoil, combined with the turbulence in the US financial markets, offered “not much hope” for the market to revive before year-end. “Investor sentiment is still weak and foreign funds have been pulling out of the market. The political scenario is definitely a deterrent to foreigners.”

Citigroup chief economist for Singapore and Malaysia, Kit Wei Zheng, said the political situation has forced the ­government to resort to unsustainable policies that could widen the budget deficit. “When you have an unstable political situation, you are forced to make populist promises needed to secure power,” he said.

Abdullah’s 2009 budget offered tax cuts and sweeteners designed to restore support for the beleaguered coalition and spur growth in the face of a global slowdown. Kit said the premier’s flip-flop on petrol prices — with two cuts that partly reversed a deeply unpopular 41 per cent price hike in June — “is not a good signal to foreign investors.”

“As long as this political situation does not resolve itself, even if there is a global recovery, Malaysia might be passed by in favour of other destinations,” he said.

Despite the gloom, the Malaysian government’s forecasts remain relatively rosy. Deputy Premier Najib Razak, who last week took over the finance portfolio from Mr Abdullah as part of a succession plan, said the government still expected the economy to grow by about 5.7 per cent this year.

However, the Malaysian Institute of Economic Research — a government think-tank — has cut its 2008 growth projection to 4.6 per cent, partly due to the domestic political turmoil. “The government has been unable to respond to the economic crisis with even a basic plan of action,” said Tengku Razaleigh Hamzah, a veteran figure in the ruling party and one of Abdullah’s most vocal critics.

“Business confidence has plummeted as capital flees the country. Political crises come and go, but the present crisis might well be the beginning of a cascade of failures leading to long-term instability and destruction,” he said in a statement last week. – Today

Rebuild the foundations

 

 

                       Lets start rebuilding the foundations…………………………..

 

 

Malaysians had a dream

“I have a dream that my four little children will one day live in a nation where they will not be judged by the color of their skin, but by the content of their character.”  by Martin Luther King, Jr on 28 August 1963.

The days it happenned in United States; Singapore, Sarawak, British North Borneo (now Sabah) and the Federation of Malaya are preparing to form a new country that is our home called Malaysia on 23 September 1963. Full of happiness and joy that a new nation is about to be born. Freedom to all; that many of our ancestors had thought.

Fast forward to 45 years later, the child of Malaysia still dream on. The freedom and fairness to all Malaysians. At last,we woke up on 8 March 2008 and thus a new dawn had begun.

To achieve Malaysians dream.