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Tuesday, June 6, 2017

'Najibnomics' is just rubbish



Economics, as anyone who has had the benefit of studying it, is divided into two streams: microeconomics and macroeconomics.
Najibnomics does not understand the distinction between the two, yet jumped right in to transform Malaysia.
Not surprisingly, the transformation produced a slew of feel good numbers, what is otherwise known as 'Syiok Sendiri Economics' (SSE), that verges on a farce.
To begin with, inflation is not tracked holistically. Thus annually, the official inflation ranges between 4.5 percent to 5.5 percent, which effectively negates any meaningful growth of the same.
Not surprisingly, Malaysia is caught in a middle income trap, with private consumer debt of some 80 percent of the total GDP.
Invariably, the Malaysian economy is now within a whisker of being wiped out by any property burst in China, or, the explosion of the debt bomb, again in China.
By taking Malaysia closer to China, in the name of being integrated into China's One Belt One Road, Malaysia has imported all the risks that now confront this massive project.
Indeed, Moody's has downgraded the credit rating of Hong Kong the week before last, on the ground that Hong Kong has embraced the Belt and Road initiative without a clear sense of where the risks may be.
Malaysia, for the lack of a better word, walked where it should not thread blindly, jumped when it shouldn't be hopping in joy.
China's debts 250 percent of its GDP
Instead of spreading our risks, by working closely with all OECD countries, which formed the developed economy, Putrajaya hung on the coat tail of Beijing, at a time when China's private and public debt combined have nearly reached more than 250 percent of its GDP.
At this rate, the Chinese economy is in the league of US and European economy just before 2008-2009 great recession. Lim Sian See, who remains anonymous, thus a black propagandist of Najib, argued that Najib has saved Malaysia.
How can, for instance, a debt of RM44 billion borrowed by 1MDB be used to save a country, indeed, to transform it, when all of the money now is missing, with interest needed to service the dent now verging on few billions a year and increasing?
Najibnomics is bollocks, precisely because it doesn't know the micro and macroeconomics foundation of Malaysia.
Microeconomically, Malaysian entrepreneurs are bankrupted more easily than any laws in the world. Anyone above a debt of RM50,000 can be declared a bankrupt.
Not surprisingly, the legions of Malay and Chinese entrepreneurs, in an attempt to make a better life for themselves, end up receiving the short end of the stick.
Buy a van to sell to get involved in some cash-based food businesses. If the revenue is not more than what one can afford to repay, the bankruptcy is permanent. And, one thought that hell is eternal.
In Najib's economic world, hell is already permanent in Malaysia, even before the angel of death comes knocking on one's door.
Macro economically, Najib has had zero view on currency. Unlike Singapore, that made it a point to strengthen its currency in the mid-1980s, eventually allowing the Singapore currency to be as strong as the Australian and Canadian dollars, Malaysia took to allowing surplus labour from all over the world to invade the country.
Thus, stagnant wages went into a downspin, and Malaysia is now in a race to the bottom to tout its economic advantages. At this rate, it goes without saying that Malaysia has to show that it is more attractive than Myanmar or the Philippines.
Najibnomics are BSnomics pure and simple. It sought to dig a hole in the middle of Kuala Lumpur, borrowed heavily to refill the hole in the heart of the city, allowed tens of billions to be allegedly, stolen or frozen in more than six jurisdictions - all of which for criminal liabilities and money laundering - yet did nothing to repay the debt, except to go to Beijing yet again to ask for financial lifeline and redemption.
If Najib Abdul Razak had graduated in industrial economics in the University of Nottingham, one can see that he hasn't been following his lectures with any diligence.
Not surprisingly, Najib often allows Professor Kim of the Blue Ocean Fame to tell him how to transform the country. In fact, the cabinet is so clueless, that they assume Blue Ocean implies the need to transform the maritime corridor of Malaysia.
Thus one has Port Klang, Port Carey and Malacca Gateway all within earshot of one another. And, as if that was not enough, there are Port Tanjung Pelepas, Kuantan Port, Lumut Dockyard, Terengganu inland docking facilities and Penang Port, too.
If Najib is a quarter as wise as what Lim Sian See said, the Malaysian economy is what Hokkiens would call "sie liao" (dead already).

The fact is Najibnomics has and always been about allegedly, a land scam based on over leveraged debt, something he learned from another Larry Low, the father of Jho Low, both of whom would probably sink in a sea of spit, if they dared to show their faces anywhere in Penang or Malaysia.
 

RAIS HUSSIN MOHAMED ARIFF is a supreme council member of Parti Pribumi Bersatu Malaysia.- Mkini

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