by Ismail Dahlan
The average Malaysian has to budget his monthly expenditure
based on his monthly income. For example if you earn RM3,500 a month, you can
only spend up to RM3,500. Spend more and you are in debt, or deficit if you
like.
Najib Razak, however, has apparently decided that he is not
bound by any such economic rules. In Najib’s wonderland, he first figures out
what he needs to spend to win the election. He then adjusts his growth figures
to fit his expenditure. He insists on defying the laws of economics!
If Najib were to attempt to defy the laws of gravity in the
same way, he would fall splat on his face. That is the trouble with economics,
we suppose, you simply have to play around with numbers on excel spreadsheets
to defy its laws (for a while). But eventually it catches up with you. And it
won’t be Najib who pays the price, it will be all of us.
Bankruptcy
and the SF Golden Bridge
The individual who exceeds his budget to the frustration of
his creditors and the state which does so will meet the same end; bankruptcy.
And that is precisely and unerringly where Malaysia is headed now. And what is
this in aid of, exactly? What is the cause? So that we can have another five
years of Najib and Najibonomics where 2+2 somehow adds up to 6!
Not satisfied with handing out vast sums of cash from
non-existent income sources, Najib declares that he will also…take a deep
breath….reduce the deficit! And if you believe that, then I have a gold-colored
bridge in San Francisco that I would like to sell to you.
The fact is that Malaysia will be fortunate to grow the
economy by 4% based on the prevailing conditions in Europe and the United
States. And this is provided there are no major jolts to the world’s economies
from unforeseeable circumstances. Baseds on this we would end up with an
enormous deficit next year. And how will Najib solve it? Yet another fantasy
budget? Deeper into the quicksand of deficit budgets we will sink.
One-off,
then what happens next month?
Let us now examine this RM500 that Najib is promising
households with incomes below RM3,000 per month. There is a catch, of course.
It is a one-off payment. So what are the poor supposed to do the next month?
It’s back to good old destitution.
What Najib should be doing is addressing the issue of runaway
prices which is the real problem facing Malaysians. And he should be looking at
how to increase disposable income for Malaysians.
That Najib does neither is clear proof of his, and BN’s,
incompetence at managing the economy. And it is a damning indictment of his
tenure as Prime Minister that where there should be energetic leadership and
visionary plans; there is only a leaderless vacuum. Where there should be
prudent economic management, we are presented irresponsible, empty populism.
Handing out cash in scattershot fashion will not increase
economic activity or output. Nor will it create jobs. What we need is focused
investment in sectors where the country can compete internationally.
Najib knows the mess we are getting into with this irresponsible
budget he has proposed, but he presents it regardless. His only objective is to
win another term even if the entire country is to tumble headlong into the
ravine of insolvency.
Source : MC
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