The right of reply

Enough is enough. People who proclaim to fight for freedom of expression and free media but censors other's legitimate reply based on their whims and fancy, must realise that on the internet, they cannot suppress peoples' legitimate right to reply and express contrarian views. This blog welcomes all views. ~ Ellese

Penang tunnel: A con artist justification


The Penang toll tunnel project seems to be turning into a farce. I’ve read the latest response by LGE in pro pr blogs. It’s well written but find it illogical. I must say I take my hats to him for a good spin conning the gullibles.

Now this is what he says. He says he needs the tunnel to solve the traffic woes in Penang. The tunnel apparently comes with other highways. He claims that he has to do the underground tunnel as overhead bridge is under federal jurisdiction. Then he argued that he has to impose toll because if he doesn’t federal government may sue him coz for other bridges there’s toll. The toll to be charged is based on other bridges toll. To compensate the concessionaire, they will give prime land to concessionaire. This project is expected to cost between 6 to 8 billion.

I think LGE is a con artist. You see he has always objected to tolls saying whatever toll imposed is excessive and exhorbitant. In pr manifesto they agree to wipe out toll.

Now he argued that he has to impose toll coz federal government might sue him? He claims in the first place he has the right to build underwater tunnel and federal has no say in it but in the same breath he says the federal government can sue him for not imposing toll on state matter. What a load of bull. If federal government has no right, how can federal government sue?

Then LGE says he’s going to base the toll rate on other bridges toll. He has claimed all the while that BN tolls are excessive but suddenly here wants to impose the same toll rate? Did he forget he promised to do away with the toll? But why is he committing to another 30 years?

It’s getting illogical and weird by the day. If one looks at his Penang toll model, its worse than bn model. In bn privatisation model, concessionaire is only compensated by toll collection which LGE argues as exhorbitant. In Penang model, concessionaire is not only compensated by the toll of the same “exhorbitant” rate but also obtain prime scarce land on Penang. Isn’t this piratisation? Gila bab punya model. I think he just ripped Penang off in the eve of election.

LGE is really a con artist. I’ve not touched on the comedy of the award justification they’re pulling. They have absolutely no experience in doing toll roads and it shows. Many pr supporter goons are too afraid to question this tokong fella. Just ask the same question lah they ask on BN.

That’s what happen when you don’t know what you want. I leave for now. I’ll tell you what our road privatization should be next time as some would already know it from my past write. This pr toll model is ridiculous and worse than our first generation model. Rubbish betul this LGE.


93 thoughts on “Penang tunnel: A con artist justification

  1. We know the PR group can’t be trusted in their words & promises which are all designed to be broken – the proof of this is the 2008 PR Manifesto promises especially in Selangor not fulfilled and now the introduction of undersea tunnel tolls against the promise for toll-free society. And they are making more empty promises on free education, cheaper cars and again no toll – can you trust them?

  2. Hussin

    I beg to differ on your comments about Selangor not fulfilling their promises. In the spirit of this blog, may I ask if you can attempt to list down what they promised that was not fulfilled, even in part? It is best not to make such a sweeping statement.

    I agree no Govt is perfect and I wholeheartedly agree if we debate civilly that will reflect our maturity in thought.

    I agree that if any Govt is behaving with no accountability, the voters will soon get the better of them. I look forward to your thoughts here.


    • proud2bmalaysian –

      OK, I will just list two of them:

      a. Free water supply for all in Selangor, of course, including the flat/apartment dwellers even if they have “pukal” water meters – no excuses here.
      b. Financial assistance to single mothers – again no excuses.

      Just to be as short as possible to respond to you, the PR government even declared that the PR campaign promises and manifesto are not binding as they are not legal contracts meaning just empty promises designed not to be fulfilled.

      • Hussin

        Help me with the reference to their manifesto please. I don’t have a copy. That will help greatly.

        How do you think Lim GE as fared as CM for Penang? Did he do better or worse than previous CMs?

  3. Lim GE is too arrogant now.

  4. I think he may be misconstrued by people or misrepresented in the media.

    I sure hope he is not arrogant now. I met him a few times in person and he seems really nice. His tone of voice is confident. Maybe some would think he is over confident and label him cocky.

    If he is truly arrogant now, he should be reminded that it is the people who put him there.

    If he is misrepresented, then his PA should do damage control ASAP.

    • Fair comment. But I thought LGE response to SAM Idris is symptomatic of his character.

      Rather than answering the questions posed by Idris, LGE attacked and miscategorize Idris. I think as a state leader cowering Idris is below the belt. This guy has been protesting on many issues all these years against BN. Now because he question LGE there is no necessity for LGE to categorize Idris as pro BN to win an argument.

      He can easily response with points without touching on unrelated transactions. He must realise that as a leader even the most dumbest ignorant citizen can ask him a question. There’s no need to attack personally. Listen lah.

      That’s why people around and close to him call him tokong and arrogant. This unfortunately would be his down fall.

      • I am not privy to SAM Idris interest posited to Lim GE. Just curious. Did anyone here witnessed this particular engagement or did we read it somewhere?

        I find that even being present we can misconstrue the matters because we are not aware of the motives of people. In politics, people are after your neck every time and perhaps he has gotten paranoid.

        Strangely, it is not characteristic of Lim GE from what I know of him.

        I guess I try to give him as much leeway I can tolerate.

        • It’s at Anil’s netto blog. As usual I left my comments there. Hope you can find it within the last month or two.

          Anyway, if you know LGE as that, you’re entitled to it and I won’t try to change it. For past few years I’ve written before that I’ve met more than enough politicians to never wholly believe in their words. We judge them by their actions. Cheers.

          • Well, most politicians seem to promise and say too much then get caught.

            Perhaps Lim GE is falling into that trap.

            Strangely, I wonder why few talk about Najib, Muhyiddin, Hishamuddin, and the BN politicians who talk like this all the time and talk down at us yet get away with it. Maybe it is because they can throw the book at us when we do it, with the Police, new ISA, Sedition Laws, and all.

            But once the Opposition tilts the wrong way, and I am not condoning it, the piranhas attack ferociously. Maybe this is our Malaysian style where we have had BN for far too long and gotten numbed to their corrupt antics.

            Sorry, a bit of ranting here.

          • No worries. For me it applies to all politicians. I wrote before we have a systemic problem in our political structure. We need to change the incentives and disincentives of politicians and only then they can change. This applies to all bn and pr. Without this corruption will continue to be the same.

            My main issue with the current two party system is that we’re not moving in the right direction. PR should be different from BN but they are exactly the same. Their approach of taking high moral ground and using hate will be detrimental to us. Assuming they are in power, there’s nothing to be accounted. They went on the hate ground of replacing bn. So if bn loses, what do they intend to do?

            Supporters of PR must make them accountable. Not give every excuse in the book to justify non performance. Not give spurious argument which doesn’t make sense. My oft quote example is the deficit budget. Pr must put a stand whether they want surplus budget or development. Right now they’re arguing bn deficit budget incurs debt and this will bankcrupt our nation. But pr for every past years had proposed the same deficit budget too. There’s too much ‘bodoh’ politics now in the words of Anas.

            The paramount job of a leader is the improvement of our quality of life. At this juncture Najib and BN had made a more compelling case despite the deep shortcomings on corruption (We can go through comparison of buku jingga and now both manifestos). I had thought when we appoint Pak lah it was a mistake. Appointing Anwar as PM will be the same or worse. Anwar has betrayed us in 98 with the most ridiculous economic policy ever and this time I cannot see LGE or Hadi to counter. Tony Phua has been extremely dissappointing going by some of this non sense proposals. Anwar just don’t have that capacity to delineate what’s good for our nation first. He proudly til today boastfully claim what he did was right when all over, the world has condemned such ridiculous policy. The budget and economic argument they put forward time and again reminded me little has changed since then. They don’t know what’s proper or not for the general well being.

          • It is hard to say that even in hindsight that Anwar’s 98 policy in accordance to IMF is wrong. Right now, all economies who implemented the IMF policy has far surpassed us in economic growth and FDI. Our economy is now in waking up mode at best since it is over controlled.

            The 2 party system will work if we put it to the test. Right now, it should be Pakatan’s turn to show what they can do. What we say now is all theory but the 4 states they run has shown sterling performance while the BN states are pathetically locked in corruption and unaccountability.

            As such, they deserve a shot at the Federal Govt since BN will give us more corruption at a greater scale while giving handouts to more than 40% of the households. How can this be progress?

            Will PR smaller deficit be OK? I suppose so since the previous BN administration has already spent far into the future. Mahathir spent 4 Malaysia Plan budgets. Pak Lah had nothing to spend. Najib doubled the national debt in 4 years. He is the biggest spender of Malaysian history. He spent what 5 other PMs spent put together. Where in the world will the Govt get any more income for the future budgets?

            BN’s way, an clearly not in the manifesto, is to introduce GST and remove all petrol and sugar subsidies. This will clearly make inflation zoom up overnight without a counterbalance of household income growth. Najib’s way is to give more BR1M which is no way to grow. And this is clearly left out in the manifesto. Isn’t it a misinformation? Spending without telling us where to fund it?

            PR is saying monies will be diverted from savings of inflated projects, revised agreements for IPP and tolls, without going to GST and removal of subsidies yet. In the past 4 years, they did just that and gave the people back the savings in projects. So, the PR manifesto is doable, in my opinion, as long as we are not surprised that the national debt is far greater than what Najib has confessed to be.

            I have more confidence in PR than BN because BN has no intention to fix corruption and the manifesto is about giving out more money and spending on big ticket projects which is the avenue to more corruption. So, BN intends to pretend to give the people something while taking even more away without telling us how and where the money is coming from.

            I believe we will be bankrupt with BN faster than PR able to help us recover the position. Look at the speed the billions of RM contracts are given out in the past few weeks. They are talking about a better future for the few and the rest of us get crumbs, and for that, we should be grateful to BN.

            In the event PR forms the new Govt, whether Anwar or somebody else becomes PM, I am sure somebody with the proper national and international stature will be selected because that person will have to shoulder Malaysia’s burden and lighten ours.

            For now, it is about letting the 2 party system shape up and once it happens, we can then freely choose who we want to elect if they foul up. At this time, we can’t and that is the problem. Absolute power corrupts absolutely and that is BN. Perhaps, when they know their power can be taken away from them by the people that they will behave properly.

            In Malaysia, people get into politics to make money. BN has that culture. Perhaps, PR may get into that eventually but if given only a term or two, they must do everything in their power to show they can rule efficiently and accountably that corruption will be at best minimum. If they foul up, we vote BN back and they won’t have the chance to be corrupted anymore because their role can change when we vote the next time.

          • Like the way you write but we are miles apart my friend. Pretty tight today and I may explain in bits.

            Issue one on 98 crisis. The issue is very clear. We were facing economic contraction. Now in economic crisis government cannot push up interest rates and cut down public spending. If you do, what will happen is that the economy will further contract. Private will spend less, pay less and less jobs. Simple logic.

            In 98, Anwar as FM just did that. The economy went on further tailspin. Our issue was never on underlying economic structure but due to hot monies. As a result it became worse. I was offered to put money overseas and earn 30% return.

            Anwar was then advised by prof jomo and I supported them before the crisis and even followed them during the crisis.

            Now what would a responsible government do in times of crisis? You need to counter this cycle. You must always put rakyat well being first. So Government must spend more. Government must take in the deficit. Why? Coz only government can counter it. Remember, we didn’t have structural problem (stats will verify this). So we need to spend. But had a currency attack problem where if we spend there’s an outflow. So we need to cut it out. That what Mahathir brilliantly did.

            Now what did jomo said? Before the capital contro,l he propounded a quote reasonable productive spending approach. He never alluded to the possibility of capital control. You know what? When Mahathir introduced it, in his lecture he said its a good idea but a bit too late to introduce. What rubbish he and Anwar. You didn’t think of it and when introduce you said its a good idea and then criticize it. Made me really mad at that lecture.

            Now you look into the recent economic crisis in US UK worldwide. All of them adopted Keynes (who propounded the anti cyclical method) In crisis government need to stop the deterioration. Put people first. Put employment as priority. And thats what all of these great economists did. They spent like hell with deficit spending. And even came out with a lame excuse “too big too fail” to support selective companies. Last time they call it crony capitalism. (Rubbish this US). There is no doubt at this current juncture Keynesian approach is the way to do it. You look at your own national interest. And on hotmoney, if you go to IMF website its now a prudent acceptable practice to adopt capital control to counter hot money in times of crisis.

            Mahathir was dead right. Anwar was simply stupid not thinking of our interest. He betrayed us putting foreign creditors first. I have only expletives for him when he still claim he is right. To me what Mahathir did was not only right, He put nation and rakyat first. We owe him big time. While Anwar put himself first and cared nothing for us. To him I only have scorn.

            If you want we can debate further with economic sources quoted. Done this many times for the past years already.

            Issue two: on your economic approach, I totally disagree with you as it makes no sense to me. Go google economist blog. He is a very respected non partisan. Read about budget and deficit spending on malaysia. I will explain to you why PR got it wrong again. Mixing up everything and leading to nowhere. Doesn’t make sense some of their proposals. Catch up with you later.


  5. Yes I agree that we are at poles apart but I think I will enjoy this debate with you.

    Historically speaking, Mahathir didn’t implement capital control in 98 because he didn’t know it yet. Otherwise, he would have introduced it when he didn’t agree with Anwar, not castigate him instead.

    Mahathir’s capital spending has caused Pak Lah to struggle and no money left for Najib. But Najib managed to spend double the past 5 PMs, that is incredible.

    We not talk from hindsight so it is not fair judgment in my humble opinion. There are many MNCs very wary that Malaysia can force capital control and put them into jeopardy again. Perhaps, this is one of the reason why FDI is so suspicious of Malaysia even until today. The opening up of the Ringgit is a good start though.

    I don’t think we will ever know if Anwar would be right although you believe he is dead wrong. However, Thailand and Indonesia who both implemented IMF policies are doing so much better than Malaysia now and we are being compared with Cambodia and Vietnam instead. What happened? FDI is passing us by. We are one of the lowest in ASEAN now for foreign investments. Is it our policies, our history or our Govt still in la la land preparing for election for 4 years?

    On PR going deficit, BN will go big time deficit based on their manifesto. BN didn’t focus on income and investment for 4 years. Always giving handouts and spending on big projects with commission. Now, the manifesto is the same tune still. How can my economic approach make no sense? The BN approach is suicidal.

    Fix corruption and save money.

    Fix economic opportunities, not give handouts.

    Removal of subsidies and introduction of GST will be BN’s next moves else no more money for giving away.

    I worry that Najib or BN can grow the national debt by another 50% in the next term. Then we are totally screwed. It is not OK for PR to have deficit but it is OK for BN to screw us in national debt borrowings and spending?

    That does not make sense to me.

    Catch you later then.


    • Thank you. But I think youre mixing up with many issues. I will touch on deficit budget later.

      Lets resolve one major economic issue because it will happen again whosoever rule.

      In times of economic crisis (contraction) do you agree that government should counter the contraction cycle and boost public spending by budget deficit? If you agree you must agree that contraction policy of increasing interest rate is wrong.

      Can you put your position on this first please. I will tackle all your concern one by one. I need to understand your economic philosophy. Kindly answer.

  6. I agree with you in times of economic crisis like a stagnation or a shrinking of the economy that Govt should inject into the system. But then again, there are limits to what a highly in debt Govt can do.

    Also during such times, increasing interest rates will not encourage consumer spending. However, if the household debt is as high as ours close to 50%, it will encourage higher debt instead.

    This has been an age old debate where it is not a one or other option. There needs to be a series of tweaks of various instruments as well as how to spur FDI instead of just Govt injection.

    I take a broad and pragmatic approach as this is not exact science.

    At present, our country is high on national debt and household debt with a not so vibrant economy. The 5% GDP projection is not trickling down and inflation is growing too fast although our Govt is denying that inflation affects us at all which is really stupefying to me. If BN wins, GST and subsidies removal will spur inflation out of control and who will suffer? The general masses whose household debt is already so high.

    I also anticipate if Ratings Agencies drop our credit rating because of a runaway debt, our Ringgit will be devalued for certain.

    What lies ahead is how the next Govt is going to deal with the national debt. BN says all is well and they can keep spending. I say they are crazy. What do you say?

    • very interesting debate here.

    • Thank you. Actually I cannot follow your argument.

      In 98 when we were in crisis, you agree that we should not adopt austerity measure of high interest rate and a cut on public spending. Here we can agree,

      Then you raise doubt on not having excessive debt. Before explaining further, our GDP debt ratio in 98 was 31% and in 99 36%.

      I’m not sure you have this number. Now if its 31%, will you not agree its still very reasonable and conservative to have deficit budget? In 99, it increased by only 5%. Why is this objectionable to you?

      What’s a conservative debt GDP ratio to you?

      PS. I will touch on current debt ratio once we can have a base parameter here.

      • In 98, we had a crisis caused by attack on currency. Not sure if it was well known at the time except the Ringgit fluctuated out of control causing import cost to skyrocket.

        In such a case, increase in Govt spending will not help. The money will be mostly paid abroad since we import so much and have little in domestic origination. Increasing interest rate will slow down spending and thus, the cycle will inevitably slow down the economy.

        I remember in 98 when the crisis hit, I lost all the deals on the table because all of a sudden, my costs became unbearable that every deal was loss making in the superlative. Increase in Govt spending will never help. The economy was stuck due to high costs of import caused by weak currency.

        I would agree with you in theory if there was a general economic crisis not understanding the cause and effect that increase in Govt spending, thus a deficit budget, and a lowering of interest rates to spur consumer spending, will theoretically expand the economy. But our 98 situation is now well known to the cause and effect.

        As to the debt ratio, it is at 53% now beyond the gazetted ceiling of 50% and it is debt/GDP income. This is a theoretical debate still because many advance countries like Singapore is higher still. Which tells us that they have a fundamental income stream that can sustain the debt while I don’t see Malaysia having. Like Greece and Cyprus, they spend without thinking of income without which they won’t be able to service the debt.

        Half our national debt is sourced internally ala EPF, LTAT, etc and our pension funds are now seriously undermined. It is probably due to the fact that Malaysia cannot easily borrow from international markets on the drop of the coin like they can with EPF. Case in point is Raja Nong Chik borrowing RM1.5B to build houses for people who can’t afford (side issue we can debate if you want).

        So, my answers may not be satisfactory but I trust the rationale is clear. Economic crisis is not one dimensional. The 98 crisis never really let Malaysia recover properly. Our economic opportunities never grew since then till today. The numbers trumpeted by BNM and Najib do not reflect reality on the ground. Business never really grew much, salaries stagnated for the past 10 years if accounted for inflation.

        Hence, my view of BN politics seem to be very skeptical in similar view of yours to the PR policies. That’s why we debate 😉

        • We can agree on the cause of it being hot money outflow. Thats good we can have a basis. I will touch this again. But please put some position on questions that I’ve asked earlier.

          My last posting I ask when we were at 31% GDP debt ratio, one should not object to deficit spending. Prior to that you agree we can have a deficit spending to tackle economic contraction so long its not excessive. However you avoided answering this. So can you answer this principle point. do you have any issue if during economic contraction and our GDP debt ratio at 31% we can employ deficit budget. Please answer this first. What’s a conservative ceiling for you.

          After you answer the above, your last posting seems to say your issue is that it was hot money and deficit budget was not the answer. Now let us get the facts right. When we were hit by the currency attack, initially no one said it was due to hot money outflow. IMF and our FM said it was due to market forces. There were outflow of huge sum. Business couldn’t be done as you said. Our economy contracted drastically. For your information our economy contracted 7.6%. Can we agree that without shadow of doubt the cause was hot money and it had caused our economy to contract. I will explain later why it was severe. So let us agree we had twin issues: one is hot money and the other severe economic contraction.

          Please answer one first and then the second. Otherwise we will be going in circles. I do think your argument on our current debt is incorrect but as I said, its important that we must get our economic philosophy and parameters correct as it will happen again.

          • I did agree with you that theoretically if debt is at 31% that Govt spending can be used to spur growth. The debt ceiling for Malaysia was set for 50% and I did say that Singapore has a higher debt than us due to sustainable income which we do not seem to have.

            I also agreed that the 98 crisis was the currency crisis and our economy contracted in USD terms both in exchange rate as well as absolute and it was very severe, practically crippling economic activities except for exports which became very favorable.

            I am not sure if my writing is ambiguous but I will try to be succinct as possible.

          • Thank you P2B,

            Following our agreement that the twin cause in 98 was hot money and severe contraction, the most reasonable policy tool to adopt to counter contraction in 98 must necessarily be Keynesian. We had to pump prime our economy with public spending. We had to incur a deficit budget. At that time the GDP debt ratio was 31%.

            Now our problem was the currency shortage. If we pump prime there would be money outflow and the pump priming will not be effective. So we need to tackle the hot money going out. This is where Mahathir was brilliant and brave by introducing capital control. Once implemented he restructured our economy with danamodal, danaharta and banks consolidation. Launched massive scale selling of properties to jump start the economy.

            Now in times like this would you introduce austerity measure which would lead to higher interest rate, more default, disruption of business, shortage of money? It does not make sense. Anwar did just that. He actually introduced dired austerity measure and made the economy severely restricted and contracted. His priority during the crisis is to pay off foreign creditors debt. He was not thinking. In times like this people well being and employment should be priority. Nation first and not foreign creditors. See Stieglitz writing at that juncture.

            That’s why I have no doubt Anwar betrayed us. Austerity does not benefit anyone save foreign creditors and his ambition to be PM. Either he is too self individualistic or too dumb to think, but whatever way his policy stink to high heavens. And to now say he is still right in 98 only invites expletives from me. There is no two way on this.

            Now from this episode major economic lessons can be learned. This was very much shown by the US, UK, developed economies during the recent world economic crisis.

            One whenever a crisis happen, people’s interest must prevail over market forces. The US typically does not believe in the so call “creative destruction” that IMF imposed on us. They did not allow market forces to bankcrupt uncompetitive businesses. Why? They call it “too big to fail” which is another name for “crony capitalism”. So what did the US do? They use huge public money to save these “crony” companies. Save and restructured them. They created a similar danaharta model to sweep up the defaulting loan. And then introduce new public spending expenditure on infra to boost the economy. Why is it like this? Because we must put people’s employment and well being first.

            Two: due to hot money disruption on economy, world community now has consensus that this needs to be controlled in times of crisis. IMF has even proposed and adopted one of the acceptable policy tools to counter a crisis is capital control. So what Mahathir did was way ahead of others. Of course we can claim other economists like krugman had thought about it earlier, but point is Mahathir did that to arrest the currency issue despite worldwide criticism then. That earned my whole respect.

            So can we have a consensus on what is above ie any economic policy must put nation interest first (people well being first). The US UK etc did that. There’s no such thing as free market overriding all concerns. This is important to discuss the next item ie what our debt should be like.

            Now before proceeding can you show me where it is gazetted that our debt should not exceed 50%. All parties including PR think its not the case. PR has been increasing our debt in every budget of theirs.

            Another thing that we must establish is the debt parameter. To you what is a reasonable conservative parameter? Tell me why your parameter benefits our nation.

  7. “As to the debt ratio, it is at 53% now beyond the gazetted ceiling of 50% and it is debt/GDP income. This is a theoretical debate still because many advance countries like Singapore is higher still. Which tells us that they have a fundamental income stream that can sustain the debt while I don’t see Malaysia having.”

    Singapore high debt is merely an accounting phenomenon, layman term is left pocket right pocket, they don’t borrow to finance deficit simply because there is no deficit along the years. I dont think it is a apple to apple comparison against Malaysia.

    I think a better way to describe debt is healthy versus unhealthy level by looking at trend, % over gdp and gdp growth. I personally think we are at unhealthy level because debt / gdp seem to increase yearly and i am not sure if the increase are utilised to finance activities that enhance productivity ie to improve gdp growth in future.

    • HY

      I think there’s many apple to apple comparison with Singapore. I will elaborate later. I think economist blog made a compelling argument on our debt situation. As far as i understand our debt is for productive sector. Will also elaborate this.

  8. Ellese

    I sense that you have judged Anwar as the one wrong in 98 and pronounced Mahathir as savior with capital control. I don’t think we are quite aware of the details of what actually transpired during that time but only what was reported. Hence, we don’t quite agree on many items.

    I think that if Anwar had wanted to repay foreign creditors, that is normal because even Mahathir cannot avoid doing that. The ability to repay will contribute to Credit Ratings which will affect future ability to borrow and will determine the value of the Ringgit. Regardless, don’t for a second believe that after Anwar was unceremoniously castigated that Malaysia never repaid foreign loans. In fact, Mahathir did exactly that but very quietly. So what was wrong with Anwar wanting to repay foreign debt? After all, that is what the FM must consider since the debt was also generated by Mahathir’s grand projects.

    It is too simplistic to call it Keynesian economics as it is a theory. In 99/00, I heard it was Nor Mohamed Yakcop who called on Mahathir to implement capital control. It was after Anwar’s time now and he can’t do a damn thing since he was in jail. Short term, increase in interest rates would slow down spending and it was hoped to bring down imports and along with it, the forex will stabilize. During this time, people stopped spending regardless of interest rate. Businesses were crippled due to our exchange being unfavorable to imports but those who exported flourished because Malaysian goods suddenly became a song. Interest rate had no bearing on the actual behavior.

    There are still ramifications as to whether capital control is appropriate or not. China did it, so did Malaysia but the situation around the two economies are far different. Thailand, Indonesia and Philippines didn’t and short term, they suffered more severely, both economy and people. Malaysia went into a coccoon state due to artificial stabilization and we didn’t feel the full impact at the time.

    However, when the turn of economic activies returned, Malaysia was avoided because nobody likes to invest in a capital controlled economy. Except when they had no choice like in China. So FDI went to the likes of Thailand, Indonesia and even Philippines. Singapore was a definite choice in ASEAN. It was Think Malaysia Last.

    In hindsight, Malaysian economy never really recovered since 98. Our economy was stagnated for all these years even with the injection of Govt spending on projects. Unfortunately, because Malaysia do not produce much raw material in the construction industry, a lot of our monies went abroad without the trickling effect into our economy. Even workers were foreign and they expatriated their money home. So in actual fact, we were helpless in fighting capital flight because inevitably we had to pay others abroad to do our projects. Furthermore, the past few years saw the highest illegal capital flight without anyone attacking our currency. What happened?

    So, yes I agree that Mahathir had the guts to implement capital control at the frowning of the world but look at where it got us? When the world economies improved, ours didn’t because of the same instruments we used. We relaxed it recently but it was too little. We were trying to behave like China when our fundamentals are very different.

    So what he had the guts? I never denied he always had to gall to say and do what he wanted, rightly or wrongly. In turn, because of our weak production, we had to inject far more into the system to equal out what we lost in forex. Furthermore, it was Mahathir who let Nor Mohd Yakcop lose billions in forex speculation, the very thing that hit us in 98 and this has been quietly kept under the carpet. Again, nobody in BN said anything because anyone who says anything against Mahathir will be duly “removed”.

    That is why it is easy to pick on the Opposition because they will not throw the Sedition or ISA book at you.

    I have gone through the economy on the ground from 98 through today and I can tell you that it is not moving much regardless of the ETP and what not that Najib is touting because the fundamentals of the economy is not fixed.

    The debt ceiling is a theoretical limit but must be matched with sustainable income. We don’t have sustainable income but we keep borrowing and increasing our national debt. One day soon, the parameters will be met to bankrupt our nation and it is not just the debt/GDP but the real income not growing.

    I really would love to know how BN and PR will go generate income to sustain economic growth programs. I am not satisfied with anybody’s answers but BN’s answer has been the most nebulous and wishy washy at best. Any idiot will know how to spend money but only the smart and wise will know how to generate income. BN’s way right now is to tax the people more with GST and subsidies removal immediately after GE13. Their 1.3T in the manifesto are just words with no knowledge how that can be pulled off. PR did not do much better, I must admit.

    I apologize for a lengthy discourse.


    • Thank you very much. I initially thought we had a consensus and there cannot be any other conclusion. We have enough material and experience to decide. Keynesian is no longer a theory. Every economy is applying that now. Perhaps I jump too soon. Lets take the parties out as we become bias. We do a case study because this economic cycle will definitely recur again.

      Assuming you’re the finance minister, when the economy is under currency attack and thus causing severe economic contraction, will you adopt austerity measures increasing the economic contraction?

      Is your contention that in an economy facing contraction, interest rate rise and further cut in public spending has no significant impact on the economy?

      We need to get this understanding correct. Otherwise we will have a huge fundamental difference on economic understanding and approach.

      • My take is this. If we have an economic contraction under currency attack, we need to make sure we take phased measures.

        Austerity measures may not work because consumers already know how to pull the brake on spending. Lowering interest rates also won’t encourage spending especially when most of the goods we use and consume are imported. We import a lot of our foods and that will cost a lot more. Inflation will set in.

        Businesses will find it hard to continue and will be in survival mode. Govt lending to businesses to keep them alive will be tough. Many will go bust and restructuring in a managed way will be required.

        Strategic Govt injection will be required that must ensure trickling down to the people on the street. Govt must be frugal yet know how to leverage whatever monies we can inject. Corruption must be zero tolerance.

        Many people will default on their loans and the Govt must formulate protection for both people and businesses. Govt must spend wisely where it helps most and not on imports.

        I agree with you that the cycle will return but our Govt has not built self reliance on domestic produce. So if it happens again, we will be screwed again.

        If we implement capital control again, we must be prudent if it will stifle foreign assistance. IMF and World Bank loans will be critical for injection. Malaysia will stand to lose out because we don’t have that much reserves to sustain. We must borrow. That is not a choice. That is also why when we had some reserves that Nor Mohd Yakcop went to speculate other currencies to make some back and we got burnt again.

        I just know that it is a tough place to be an FM during such times. You can do anything and it won’t be seen right. Whatever the policies may be, it is not right to just give money to the people like BR1M. It is to make the environment better and to help the people stand up again.

        Balancing national debt, household debt, interest rate, unemployment, salary freeze, etc is very tough. In fact, we had it worse in the mid-80s than the 98 crisis. People volunteered to work for paycut. In the 2000s, people still want to be paid more. Something is really wrong with perception of recession.

        By the way, why are we debating the 98 crisis again? I hope that we are more prepared now if we get hit again but I am sure our Govt never prepared the country for this to happen again. Look at what our Govt has done from 98 till today. Do you think Malaysia can withstand another currency crisis?

        • Dear P2B,

          Your write above seems reasonable. You are saying in economic contraction, austerity cannot work and we should pump prime to in strategic/ important sector. How can you earlier say that austerity measure in 98 to tackle the economic contraction is not wrong?

          • In theory, austerity drive in economic contraction is one of the solution and it assumes the contraction is caused by over borrowing and spending.

            I guess I wasn’t clear. Apologies.

          • You seem to be giving contradictory statement. Please be consistent. If its wrong its wrong and if its right its right. I’ll be more precise.

            We have agreed in 98 the twin problems were hot money and economic contraction. At that time our debt GDP was 31%.

            Having considered that, is your position that we should go for higher interest rate and cut public funding (austerity measures)?

            Please give simple answer in the affirmative or negative but not both. I really cant understand how your thought process works and will need you to take it through. You do not need to elaborate with the post restructuring policy as I will touch on that as well later. We resolve this fundamental issue.

    • P2bM

      “One day soon, the parameters will be met to bankrupt our nation and it is not just the debt/GDP but the real income not growing.”

      How close is our debt to the crisis level? I read somewhere that out ‘total debt’ as at 2012 was RM1.743 trillion.

      • I don’t know the exact number coz BNM and Najib and Pemandu keeps playing hide and seek with them. But for sure, it is much higher than what is officially notified. There is also those that the Govt guaranteed for GLCs that are not counted in the national debt.

        So, I think the time will come really soon.

        • “There is also those that the Govt guaranteed for GLCs that are not counted in the national debt.”

          If we consolidate the ‘contingent liabilities’ our debt should be higher. I think we are already inside the IMF radar.

          • You might just be right.

          • Dear P2B and Hasan,

            I want to deal with this later but its being discussed now. I am sorry but the debt basis argument above is based on false premises. Please be informed of the following:

            1) there is no ceiling at 50%. It’s false to say we exceeded the debt threshold.

            2) the current limit is 55%. Please note the debt here must be used for development fund. It has restricted use under the law. Any usage of the fund is reported to the parliament on an annual basis. Such debt is thus accountable.

            3) the debt level is set by administrative gazette.

            4) all guarantee must be laid out in parliament. No such thing as unknown guarantee.

            5) our debt is mostly in ringgit. There’s no issue of repayment. The foreign debt is small and not a concern.

            6) our debt amount can be obtained publicly. You can refer to bnm figures.

            7) weved had deficit in government operating budget in 4 out of 40 years.the rest are surpluses.

            All political parties have no issue with our debt level. All BN and PR budget proposed deficit budget with billion dollar direct subsidy. To condemn one but not the other is illogical and inconsistent.

            Sorry for the curt response. Got to go for now. Will write later.

          • Apologise for my directness above. But let me elaborate a bit. The debt argument for the past years have been irrational. There’s been too many false premises and many think its the truth. We had debated this countless of times and as I have explained almost all argue without basis. Some people even misleads and misrepresent the facts. The truth is our debt is not a major / critical concern. Of course surplus is better, but on the macro side we have done credibly by the growth figure numbers. P2B raised too many issues and mixing them up. We need to decide point by point coz only then we are clear on positions so that we can make proper and consistent stand. Otherwise as I have seen we will argue that the same policy or position is right or wrong depending on who we like or hate. This doesn’t make sense.

  9. Interesting. To a layman like me, it seems the government is free to guarantee and borrow any amount it likes without any limits to finance its budget deficits because all political parties have no issue with our national debt levels as long as the debt limit is legitimatlely, appropriately raised & regualrly gazetted, the debts are used for development and especially so “not-to-be-worried-about” if the debts are in RM as they will pose no issue of repayment. If the government is allowed to behave this way, it is a very irresponsible government. And we as Malaysians too are irresponsible to allow and accept this situation so easily. Debts in RM to be paid in newly and freely printed RM Notes will fire up inflation & devalue the RM and why should Malaysians save RM incountry when the government will keep on spending & wasting them this way?

    Is this the picture we are trying to paint?

    • No bro. I want to bring the discussion to adoption of policies which is right for us. I want to show we have accountable safeguards and limits. Such limits must be for our benefits.

      I intend to show that we must strike a balance between mobilization of savings and development. For me capitalizing savings for development purposes which has recurring future income is reasonable. It pays by itself and bring multiple social benefits. But the problem of our politics is that we discolour everything not knowing what we want. Eg the policy to adopt to tackle economic crisis pun we discolour with politics wherein all developed countries have moved on and developed a consensus on this. Hayek has been abandoned. My intent is to bring out this logic and we decide what we want. In the meantime I need to challenge some fundamental views which I think are erroneous and incorrect. Lets take through. I’m still a long way to go. Still stuck on 98.

      • “I am sorry but the debt basis argument above is based on false premises.”

        “My intent is to bring out this logic and we decide what we want. ”


        As at present we are creating a debt-ridden economy. The entire entrepreneur class, the government and many of the consumers are already in or will soon find themselves heavily in debt. This has important economic, social and political consequences.

        The government the largest borrower will ultimately pass its financial burden to the taxpayers. Indirectly, the impact will be seriously felt by the private sector. This is undesirable because the burden falls on the wrong parties. They will be the more hard pressed and, yet, they are preciously the ones which are needed to lead the country out of a situation of chaos.

        Is my thinking erroneous because it is based on false premise?

        • I can agree bro but we cannot argue base on false premise. We need to have a feel first what’s reasonable or not. Have a benchmark. See what’s a conservative benchmark. Then decide what’s good and not.

          Now consumer debts you mention is worrying but a different discussion. There are different policy tools to employ. Government debt is different. It has different argument and policy adoption.

          I’m okay to argue debt restriction as I replied to Husin. But just don’t based them on unjustified premises. For instance we argue that our debt level is worrying because it does not include guarantees. I’ve dealt in some of these government guarantees transactions and we always ensure it must fall within the loan guarantees act. No bonds issuance or bilateral loan with Government guarantee for glc that does not follow the act. The glc and its lawyers will ensure this compliance. But pr including tony wants to create buruk sangka and this is not justified. I’ll take you through the relevant acts and provisions later bro. In the meantime I suggest you read very sensible and compelling write on our debt at the economist blog. He has been writing good analytical non partisan stuff.

          • Sorry bro,

            But on your question whether the debt of government will affect the rakyat, it must always depend on how its spend. Say if its to finance toll roads or even IPPs, this is self sustaining besides providing further multiple economic growth. This I have no issue.

            Point is we need proper debate and not based on unjustified supposition.

  10. i have no time to chk everything, just write base on memory.

    i think hisham is correct to say we yet to face bankruptcy issue like greece, bec our debt is ringgit denominated ie internal, but he never say we have a strong balance sheet as well because no matter how we see it, debt is tangible and any default could only bring down a govt which what we are now tring to alert before it happen.

    actually there are quite a number of asian countries that have relatively high debt / gdp, and mostly without external debt, example china, japan, singapore, and malaysia. however the first 2 buy huge us debt and thus their net debt position is not really that bad, while singapore is unique where temasik invest on behalf of cpf, i dont think malaysia is as strong in term of balance sheet, by looking at our currency strength.

    i also think hisham agree with me when i claim there is lack of transparency wrt our debt, if an economist like him still have to check and confirm where is our limit and debt level, what about layman like us, hence p2bn is right the govt r playing hide and seek, in another word, if we r all blur blur to tangible number like debt, how to we quantify number like income and asset?

    hence i think hasan comment is rational n sensible.

    ps/ 97 crisis face both money flow out n contraction issue, i sometimes have problem to understand which part both u n p2bm are referring to.

    • HY, I am following your comment at KTe… 🙂

    • As a concern, I’m fine with Hassan. Just that some premises of his and P2B’s arguments are unfounded. Sorry bro for being curt.

      This debt issue to HISHAM is overblown. He’s not particularly concern about it and call it a myth. The debt numbers are varied coz there’s many types of debts. He even said if we apply the 55% limit under government funding act rule, our debt ratio is only 45%.i think everyone should read it.

      I also think its fine if we use the international benchmark of debt GDP ratio. It’s a worldwide accepted benchmark. Im unclear how the country’s balance sheet method work and what’s a comparative benchmark to assess the balance sheet method. If you provide me some reading ill read it.

      On Singapore my main contention is that we are alike. Singaporean GDP debt ratio of 100% shows an efficient method of mobilizing savings. Their cpf rate is only 2%. With these cheap funds, government borrows from the cpf and then invest on higher returns.

      We are similar save that Epf rate is 4%. All such money’s borrowed are to be used for restricted purposes and presented to the parliament. My thinking is that we should use this fund to create further sustainable growth engine which creates multiplier effects. The EtP has many projects which creates a sustainable return. But we deal this in a separate write.

      • Interesting to know that cpf charges Singapore Govt only 2% for loans which the Govt reinvests on higher returns without a murmur of complaint from the contributors. Yet in Malaysia with 4% rate charge for Epf loans to our Govt, there is so much hoohaaa from the Opposition.

        However my above-mentioned remarks don’t mean that I agree with anybody categorizing our debt as a myth – a debt is a debt which will have to be repaid somehow by the rakyat later. Striving for efficiency with high gearings in mobilizing savings must have a limit to cater for the unexpected. Spending in anticipation of revenues is a risk that must be calculated.

  11. On the onset of the economic crisis, it will be important to stop any new and uncommitted Govt projects and reassess if these will help the economy or lose more to forex. You may construe this as cutting public funding. Increasing interest rate is also a mechanism to stop all new spending pending assessment of forex impact.

    Once better understood, public funding must go to those that improves the growth of domestic economy best. Temper with interest rate and provide positive policies to those industries that can induce domestic demands without losing more to forex.

    So it is a phased approach.

    • P2B,

      You’re prescribing exactly what jomo was saying then. It didn’t work. At the end jomo begrudgingly said that it would have been better to implement the cap control earlier.

      This productive sector theory in combatting economic contraction as opposed to countering the cycle has been abandoned completely as far as leading economies are concerned in countering economic contraction. There’s a consensus that in times of crisis government must put well being of people first. Ensure the employment is sustained, stimulate the economy and business and provide opportunities. People supporting this productive sector theory worry to much about the end. As Keynes say, in the end we are all dead.

      It is unclear what you want to achieve by this method. What’s the philosophy for doing this. Who do you want your policy to serve. Im baffled by such justification when we had a history of failure that this method does not solve the contraction. It doesn’t spur and stimulate the economy. It cannot solve the currency attack. It does nothing but wait to see things crumble by the wayside.

      Without fiscal stimulus, can you tell us, how does this theory stop the money outflow in 98? How does it arrest the increase in debt among not only of businesses but ordinary people who now have to pay housing loan interest at more than 10%? How do you stop the dwindling investment in the economic activities? How do you stop people being unemployed?

      Kindly clarify.

      • Can you explain how you put people first, how you stimulate economy, how capital control affects future borrowings, how you provide business opportunities and employment during this time?

        • I hope you can provide answer to my question first.

          Nevertheless I’ll wait after answering yours.

          I think Keynes once alluded that even in times of crisis, you don’t have to stop building homes. You just continue. It provides employment opportunities, create business opportunities and bring income and wealth to the economy. These money will then pay off the loans, buy goods of others etc etc.

          A government is not like individual. It doesn’t have to cut spending but continue to counter the cycle. Where private investment has dried up, its the public sector that has to spur the economy, inject money and opportunities into the system.

          This is essentially what a responsible government must do. We have many excellent instances. PLUS highway as I remember was an excellent example of deficit spending. Not only it creates employment but a huge plethora of corridor developments. This bring income and further revenue to pay off the debt.

          • Allow me to allude to the issues of stimulating the property industry to spur economic growth.

            This used to work in the 70s, 80s and even 90s but since the 98 crisis, it didn’t work any longer. Why? Because we had to import steel and cement. And their cost skyrocketed making the eventual products whether homes, buildings, bridges or airports to be much higher. And now we have unaffordable homes, glut in many places.

            In such construction environment, we import workers from Indonesia and Bangladesh. We do not have many Malaysians here so it does not augur well for employment either. And they repatriate their money and out it goes.

            I do not disagree with your point that the public sector has to spur the economy when private sector has dried up. 100% wih you on that. The question is where and what suitable for Malaysia.

            PLUS highway does not provide us with a good example of employment. My friend helped to build parts of it and workers are mostly Thai and Indons. But I agree that it helped connect the West Peninsula all the way to Singapore and is good for the country.

            So why was this not done for East Malaysia after 56 years? Now it gets a spot in the BN manifesto. No wonder East Malaysia is the poorest in the country.

            The argument that such projects generate income and further revenue to pay off the debt is incorrect. A large portion of our annual budget goes to paying debts. As a matter of fact, when Pak Lah became our PM, he got the shock of his life that practically all he can garner from income is going to salaries and servicing debt. Tun M has forward spent 4 Malaysia Plans of budget. Pak Lah had nothing to show. With Najib, print more money.

            Where is the sustainable income? That is the question I keep asking. Buying fighter jets, Scorpene submarines, giving BR1M, does nothing to the economy. My argument is to spend the limited amount of budget in key employment and revenue stimulating industries.

            The question is where. Both BN and PR failed to answer them.

      • Hi

        News says that our ASEAN economies are expecting a churn and will hit. What do you say that Malaysia should have done and should be doing before a major crisis hits us?

        • This is typical tmi propaganda. Always finding bad news about bn and portray good news about pr. Another utusan but bias of PR.

          Please quote more credible report. It has nothing inside but unjustified unknown basis. Ps hope you can answer my question on how your productive sector theory works.

          • Point taken but I am alluding to the possible effect of US and EU trickling down to us, sooner or later.

            Unless we believe Malaysia is immune to all of the financial shocks happening else where, I believe the country needs to be prepared for such eventuality.

  12. Ellese, I don’t expect any agreement on this topic, my intention is to share my view and see what I can learn from the discourse.

    1) I agree it might be overblown but definitely not a myth, crisis have contagion effects.

    2) Our deficit budget continue, debt in absolute term and over gdp increase yearly, no sight yet there will be reverse from both, operating surplus is not budget surplus, trade surplus also not budget surplus

    3) Singapore have no deficit problem, borrowing from CPF is solely for investment. I am not sure how we service our deficit, I presume mainly from debt, and I don’t know how to verify if our debt is used for creating growth.

    4) I think we don’t have to get too technical pertaining to balance sheet approach, actually you have been mentioned this all along, and what do we do with our debt? Did the invested asset/stock generate more income in future? Don’t forget populist move already creep into as part of govt policy since 2008.

    5) How many more airport, highway, railroad, dam, bridge, tunnel we are going to build? ROI is getting lower and lower until negative, Japan 80’s bubble rings a bell?

    6) What about inflation, our wages haven’t been keeping up with increase cost of living, this is the general perception among many middle income group, is that also why our property price is so high as one way to hedge against inflation? I don’t know.

    7) illicit flow, illegal flow or whatever we call it, many affluence patriot moving their money out of the country, and many went to that financial hub down south, and that is also one reason why Singapore issue securities (debt) as statutory reserve.

    I am not as pessimistic as our PR politician but I am also not as optimistic as you and Hisham, I believe in very prudence way to manage money, less debt better than more debt, no debt better than less debt.

    • “I am not as pessimistic as our PR politician but I am also not as optimistic as you and Hisham, I believe in very prudence way to manage money, less debt better than more debt, no debt better than less debt”.

      I would subscribe to the above…

      The size of government spending should always be moderate and within its means. It should be allocated in such a manner that its prime objective of stability, growth (organic) and efficiency could be achieved.

      The administrative expenses have to be kept to the bare minimum. Whilst extravagance is not tolerable it does not mean that we should spend less on projects to improve health and intellectual quality of our citizens as well as their spiritual elevation, regardless of race and creed.

      • Can we go detail. Does your moderate spending has any relation to growth target? Do you belief that we should not have deficit spending to support growth? In other words do you believe that we should have surplus budget notwithstanding it will cause zero growth?

    • :-). We have some agreement.

      1) can agree with 1. But some aspects of arguments like unaccounted guarantee and non accountability of development fund are myths.

      2) the debt are used for development purposes. But I think many don’t go through the malaysian plans or etps and thus unable to have a balance view. I’m for spending for strategic purpose. I believe projects like southern corridor or billion dollar rapid pengerang creates competitive and comparative advantage. This creates incomes which will pay off the debts. By investing more in pengerang, eg it creates more income for petronas and more money for the government. Thus rafizi’s criticism on pengerang project conceptualization doesnt make sense to me.Though there’s some criticism especially on implementation but I give thumbs up how najib n jala created the domestic growth engine. I think people should weigh all to have a fair sense of the deal and whether its sustainable.

      3) I’m particularly concern with the indirect subsidies which is about rm 45 billion. It distorts too much of our economy leading to huge wastages. I think we need to cut down indirect utilities subsidies as it benefits the rich more (not intended group). I’m however more pro for direct subsidies that benefit intended groups. But we must debate a limit for this. Bn and pr seem to be going on this endless populist approach.

      4) we need to couple with a more efficient tax system. Both bn n pr have been dragging their feet on gst for years now. Most countries have moved to this but because we want to be populist we’re not doing it right.

      5) I note your argument on Singapore surplus. However I too note the GDP/debt history of other developed countries. All developed countries save a few have even gone through GDP/debt ratio of up to 200% in their histories. Australian once had 100%++. We need to focus on what we want. We’re a developing nation. We need more growth to increase our quality of life. I’m fine for debts to be used for toll roads, IPPs, oil and gas projects, oil palm industries, tourism, etc etc or even certain public infra to generate income and growth. We can pay our debts.

      Don’t like to give individual analogy, but to explain I refer to a company which is growing. We need to strike a balance between borrowing for increase revenue. If you want to grow you need to take that loan but make sure you measure up your income. The difference is that in a company, if you don’t take loan you can still maintain n stay alive. But as a growing nation its a responsibility to increase our well being.

      I’m very pleased to see how Pemandu is doing. It’s gives the GNI for an overall sense as well. I wish we had more credible opposition to focus on real detail issues debating on how this debts affects us, how is repayment affected and how we can better reemploy such debt. for example to suggest use the money in a better domestic growth sector. Ive read refsa report and I am really dissappointed with their superficial comments especially by kian Ming whom I know can do much better. Instead we get this debate if a party I don’t like does deficit budget it will increase our debt and bankcrupt us. But if i like that person the deficit budget and debt are fine. Huh?

      6) on wages and general well being, I think stats will prove otherwise. New grads I see now buy their coffee at Starbucks, coffee beans etc for ridiculous amount. I see more wearing designer cloths. Stats on housing and car purchase shows an increase. Even some drivers I know have Perdana (albeit second hand) or a cab driver buying bike worth 10k ++. We need more empirical study on this rather than subjectively. If its subjective any increase is condemned if people don’t like the government but a small increase is praised if we like them.

      7) wrote too long. On Japan I don’t think we can get there. On illicit money flow, again overblown by PR. See bnm reply on this.

      As usual, every time you comment, I always have to dig deep. And I learn more as well in addition to articulating my thoughts. Thanks bro.

      • “We have some agreement”.

        No, I don’t think so. Actually, we are miles apart.

        You would probably be laughing and rubbish me as inherently absurd, and brand my Jesuitical attempt as basic, and perhaps, merely trying to find a practical escape from a foolish theory. Nonetheless, let me say this with conviction:

        1. ‘To Him belongs whatever is in the heavens and whatever is in the earth and whatever is in between and whatever is beneath the soil’.

        2. ‘It is He who hath made you His agents, inheritors of the earth: He hath raised you in ranks, some above others: that He may try you in gifts He hath given you.’

        If we are to follow the above principles, imagine how abundant can capital be available for financing “essential works and development” all over the country. [Of course not for ETPs/IPPs, etc lah]. We have already got the above spirit and wisdom. Most of us have shown it 52 times a week, at least.

        Surprisingly, that spirit and wisdom was shown by President Truman when he made a free gift of about US13 billion to the European countries in order to enable them to reconstruct their economies.

        • Correction… 52 times a year, not a week. My apology.

        • Sorry bro. Just to clarify its a reply to HY.

          You know me. i think ive mellowed down a bit and already apologise to you for being curt.

          I’m not so sure how far we are. But if you are for surplus budget and make that stand consistent, I will respect that. I will give such person due accord though I may disagree with it.

          Too many people bro that i met just criticise for the sake of criticism. They dont like debt for example but selective in application. For example, Penang 2013 budget was a deficit budget. No one actually even objected to it. If everyone is worried about debt we must apply consistently the surplus/ balance budget principles.

          So we differ again.

        • Ellese, the sequence of comment is a bit confusing the moment volume increase, perhaps you shd use the older to newest order with numbering.

          Thanks for the very detail and sensible reply, I think P2BM answer part of your query, i just want to clarify your comment on Penang 2013 deficit budget.

          1) Penang 2013 budget is deficit but the actual number from 2008 to 2012 is surplus, our federal budget doesn’t seem to be the case.

          2) Penang govt will make use of state fund from past saving to finance the deficit, not borrowing, again, this is different with federal budget.

          3) Most that in charge of finance know we often overstate expense and understate income when doing budget, it is sort of common trick, and only the actual result count. Penang table deficit budget every year but result is surplus, hence we can claim this accountant manipulates number but he did quite a decent job to manage the state govt finance. And that is also why bro hussin can only tell LGE is arrogant but no comment on his performance, just like if P2BM ask me how Khalid fares as Selangor MB, I tell Khalid is not handsome :)

          • Agree with you on this.

            Can anyone tell me where is our sustainable income and I will tell them how to spend the money.

            This is our human frailty. We know how to spend but we don’t know how to make it.

            The BN manifesto says it will spur RM1.3T worth of investment. How? Nobody knows. We never had even a fraction of that for the term that Najib ruled. What makes him think we can do better after the elections?

            They will also create 3.3m new jobs. That’s a lot of income sources as well. How? From thin air, we can get spreadsheet numbers to tell any story.

          • Agreed. Have change the setting and hope it improves discourse sequences.

            On Penang budget, I’m sorry bro but we must be consistent. We need to have a principle otherwise we have moving goal post.

            Thus is you believe PR can have deficit budget because they want growth, then you must apply the same principle as bn.

            If you apply Husins principle, there should not be deficit budget if theres growth. So shouldn’t there be no deficit budget if there’s positive growth as in penangs case?

            And if you’re for surplus and balance budget, shouldn’t Penang budget be condemned no matter how.

            We need to pick one. And your argument is based on faith ie dap will be in surplus. There’s no basis but faith. when DAP does it they too know about the historical past. But let me be blunt. Pr never cares about deficit budget. Day in day out every year they came out with deficit budget for our nation. We shouldn’t justify for them. We have principles and if it goes against it we condemn.

            So Lets decide. Are we against deficit spending all the times regardless of growth? Or do you want to take a position like Husin where no deficit budget unless there’s no growth? Or my position that deficit is acceptable if its uses for development purposes?

            I’m ok if you guys adopt any of the above position though i may not agree with it. But I’m up in arms with Malaysians who pick and choose position ikut sedap hati basing on who does it. For years I’ve been like this and you know me. I want all to pick a position. We don’t need to follow any party by the nose.

  13. I am a layman and not an economist but I tend to agree with hasan and HY mainly based on economic common sense on the personal level (very micro). Perhaps, at the macro national level, Ellese’s could be acceptable. However, remaining conservative, I believe our government’s fiscal target should be balanced spending and not growth spending irrespective of expected revenues but only for as long as we do not suffer negative growth – if that happens, we have no choice but to go into deficit.

    • I can respect this. You’re for a balance budget unless there’s negative growth.

      This is principled to me. Most object deficit because they don’t like the person but agree with it when they the person. Funny argument.

      As for me, I take note that we are growing. I was looking at debt GDP ratio of developed countries for past two centuries, and to me what were doing is part of the same phase they went through as well. In fact they had worst ie over 100%.

      • It is true that many developed economies have exceedingly high debt ratios. I agree that the number itself is meaningless to argue over.

        What is crucial is where the sustainable income will come from to balance the deficit. Taking a leaf from the Greece and Cyprus crisis, they kept spending till there’s none. We are trying to do the same.

        The other side of the argument is US. Their deficit is so high that it boggles the mind. But with such a huge economy and the forever printing of the USD, nobody is about to shake it lest it shakes the whole world.

        Where in the world is Malaysia getting our income from to pay for all the debt we borrowed and still borrowing. It is certainly not from economic programs that worked because we have not done anything different since Tun M stepped down except pull the plug on subsidies.

        That is the only way to recover money to pay for other things. I do not disagree except that it is NOT the only way to recover unproductive cash.

        • You are nice but are all over. You mix it up with false premises. For example we will never be like Greece. Our external debt is very low and no issue of payment. It’s mostly in local debts. Your concern will rise only if we have huge external debts.

          I find you’re still honest in that I mean you’re going to be balance and will support what’s right no matter who. I find many inconsistencies and unfirmed stand by you but you wrote in a civil manner so I’m still hopeful you will make a principle stand though I may not agree with it.

          I need you to think issue by issue and don’t mix up.

          First decide in an economy contraction what is the policy you think its good. I’m trying to take you that your proposal cannot work. Lets take through what you’ve proposed and see whether it makes sense. Then we develop.

          Two don’t mix up with the restructuring effort. Weved not dealt with it. We also need to know what they are.

          Three what’s your stand on deficit budget?

          Fourth whether deficit money is used properly. You raised concern but the answer is actually available. If you’re sincere lets look at the etp. Tell me your thoughts of the proposed strategic areas of investments. You’re pick and selecting issues. We need to have broad picture.

          In the meantime, let me republish hisham very clear article for all to have a proper feel. He’s an economist. And may explain better. Hope you read it.

          • 1. Debt is debt whether RM or Foreign Currency. Domestic is our EPF and also needs repayment. When debt is high, repayment will be constraint. Agreed our external debt is lower than Greece which only means about 40% of our debt is exposed to currency fluctuation.

            2. In economy contraction, agree that public sector needs to take the lead.

            3. Deficit is fine as long as the balance is struck with income.

            4. I do not buy the ETP. I used to build such charts and I too know that much of the stuff is fluffy business only to persuade but not realistic. Are you aware of exactly what the ETP is really doing and what is the real impact on our economy thus far?

            Yes, I am interested in what is right for the country regardless if BN or PR. You are also right that I seek a balance and not a lop sided approach.

          • I think most of it is answered in my article. Will expand the issues further there.

            On etp, lets take through. since you’ve done it before we take sector by sector. Now why are you against etp focussing Oil n Gas as a strategic industry? Which part of the etp entry point projects that you oppose? Tell us why? What should it be?

            If you can we take this in the new post. We go sector by sector so that we can focus and not talk on general points. May be you have better ideas to improve and share. Lets share your perspective and ideas.

          • I need the details of the ETP and not the powerpoint presentation for high level audience.

            I am making my comments from wishy washy charts right now as the ETP details are not shared at all or I have not gotten my hands on them.

            If you do, please share with me and I will be most happy to share my assessment, pros and cons.

            I do not disagree on ETP focusing on Oil and Gas but that is a given. What specifically in O&G that Petronas is not already doing? O&G is unique as it is a monopoly with partners. It is not a pubic sector play. Maybe it is because Petronas reports to the PM that it is considered public sector.

            I agree if we go sector by sector and work them through, I am sure we can find some things we can agree and many others we can’t. Share with me the ETP details and I will find time to respond accordingly.

          • Etps are publicly available. Just google it. Jala also been giving townhall talks. Had public sessions many times.

            For you to criticise I expect you to know. Please don’t tell me you’ve not read it. I assume you have read in view of your O&G comment.

            My first question, why isn’t pengerang a new project under etp? Is it an old petronas project? Why do you object and trivialized this?

            Why are you against building a regional storage and transport hub? How is this related to Petronas? Does Petronas own Dialog and Hollands royal vopak?

            And how is the push to RE be related to Petronas?

            Have more but I suspect you criticise without even reading. I give you the benefit of doubt first. I’ve tolerated with your wishy washy dubious stand but your remark above is pushing the limits. Please justify in view of your remarks.

          • Ellese,
            Sorry, you may be right by frankly saying that there is no issue of repayment by the government if its borrowings involve local (domestic) debts but as a layman I find a problem with that statement. It appears to brush aside the government’s responsibility as a credible borrower who doesn’t care about any obligation for repayment or any resultant loss of its local creditors’ real purchasing power if payment is made through mere printing of currency notes. Of course, my worries are based on certain premises which can be dismissed as false. True, savings like the EPF and other pension funds should be efficiently mobilised for economic development but debt-repayment should not be dismissed as a non-issue.

        • Yes P2BM – the past records of the US especially and perhaps of other developed countries as well with relatively big economies are not good examples for us to follow as they are too big to be allowed to fail without pulling the whole world down together. No country will care too much if Malaysia goes under so we have to be more careful.

  14. The Malaysian Govt also borrowed more than 50% from EPF, LTAT, etc where borrowing is so easy. I am not aware if there are any details of what exactly constitute our national debt but I can bet that more than 40% is not based on Ringgit and we are exposed.

    What my concern with a deficit budget is not the fact that it is deficit but the balance of income and expenditure. For way too long, the income was pie in the sky and expenditure was very real since everybody is clamoring for a piece of the Govt injection. But what are they used for? To generate economic growth, increase employment, prepare for next cycle of crisis, reduce dependency on imports, etc?

    For too long, we have been inundated by corruption of the worst kind, right at the top. Big ticket expenditures with no accountability. The deficit created by such practice is treasonous as it commits the country to useless purchases.

    If income is real, going into deficit is predictable. If income is not real, the eventual deficit will be much higher. Look at what Najib did with each budget. He tables them and claims only 4% and then turns around as asks for more each quarter forward. He thinks we are all idiots?

    I have written about his 2013 budget and it is really not a real economic development budget but a more of a Santa Claus type. Look at the manifesto and you can dissect for yourself.

    How does it really help the people in REAL terms?

    How does it really help the economy in REAL terms?

    We know how it helps the cronies and the commission middle men with each Govt project, esp billion RM ones. But giving BR1M in light of such large $ taken away from projects makes it really feeble.

    And did you know that over 40% of the household in Malaysia qualified for BR1M? How is this progress spouted by our dear PM?

    Where did our money really go with each budget? Do you really know? Only then will we know if the deficit is meaningful and worthwhile.

    I have no problem with a deficit budget but now we are dangerously close to the time we will not be able to service the loans if we proceed the same way for the past 4 years.

    That is why the issue of managing income comes in to make the deficit meaningful.

    Najib plans to remove all subsidies and introduce GST. Nothing wrong with that either but if it they are not balanced with instruments to minimize the impact to the people, then why unilaterally do it with others taking billions away from projects?

  15. Based on the publicly available ETP materials, there are not that much details really. Are you privy to what Pemandu is doing that others like myself are not aware of?

    O&G outlined a number of Petronas activities that they have been planning and also doing for the past 20 years. I know because I have worked with them on a number of the items.

    Your comment on Regional Storage appears that you take for granted this is a public sector led activity so ETP measurements are attached to it.

    Firstly, we already have a logistic hub in Kerteh and Petronas MLNG is serviced there. That should be the natural place to develop.

    If you are not aware, we had the never emerging Tanjung Agas that Najib wanted a Regional Logistic hub near Kuantan.

    Next is Pengerang. You should have realized by now that it is not a new project but already one that Dialog was pursuing for a while without Petronas. The location was political and now we should know that it is a land grab effort and a people displacement for certain parties to gain a lot of money. Anyway, this is another topic altogether.

    What I am trying to point out is that the Regional Storage is nothing new and Dialog has always been pursuing it. In fact, it is their core business and Petronas is the customer. If the Regional Storage is genuinely a new area of economic stimulus, you will never find Dialog’s name there. My point is that this item is working backwards taking Dialog’s initiative and calling it a ETP. This initiative is an attempt to hijack some of Singapore’s business. Nothing wrong with that. Just make sure that the environmental safety, the way land is taken away from owners, etc all be in proper order.

    From what I understand, this project was supposed to be located in Selangor but was rejected. Ghani welcomed it and planned out the land acquisition, Umno style I suppose. And mind you, this is a lot of land at stake.

    I know both Dialog and Petronas quite well to comment.

    Now, if you point out the renewable energy items, then they are not Petronas but how can these be economic stimulus? Nice to put into charts and create projects so that Govt money can be spent by some crony? This is what I call wishy washy.

    I had expected economic transformation when $ or employment targets are placed to be areas where 1) it can make a significant impact by doing things differently, new policies, new injection or 2) a brand new industry area which hold significant potential.

    Which part of my stand is dubious? Appreciate you highlight for me to correct.


    • Thank you. Then I have made an incorrect assertion on you. I withdraw my statement on you regarding the etp. So we can go detail then. You’re probably the first who is willing to do this. Perhaps your experience in oil and gas can be shared.

      Before we start lets get our basis correct. Why is the info at Pemandu inadequate? We need a basis do that we will talk on different terms and language.

      I’ll probably do two threads. One etp and the other existing issues. If we can get our basis right, I’ll do different posting.

      On the existing economic issue:

      1. On debt you would then recognise the distinction between rm and foreign currency debt. It has different impact. Please state your stand.

      2. In economy contraction, you agree that public sector needs to take the lead. Can we be clear? Are you agreeable with Keynes fiscal stimulus being the right policy prescription?

      3. You now mention that Deficit is fine as long as the balance is struck with income. This is quite similar to my position. Is your position the sane irrespective of negative or positive growth?

      • And I need to add, are you still with the view its okay to raise interest rate and cut public spending. If so please please take it through how it worked in times of economic contraction with an attack on currency.

  16. The Pemandu ETP materials are inadequate because it is far too high level and designed for people who are not well versed in the areas to read and be impressed. It is a very high quality production with little value to anyone wanting to go in-depth.

    Second, it presents a hunting ground to companies looking for Govt business thinking they exist but in reality, two things happen.

    a) somebody already earmarked for them especially where Govt funding is allocated
    b) there is no adequate funds and companies are to “invest” in so-called trial-and-error projects

    I know because I have been there.

    1. On the debt issue, the difference in impact is on currency fluctuation only. Foreign debt is subjected to fluctuation where as domestic is not. But both needs to be serviced regardless. Potential exposure is more with foreign debt because is with parties not in Govt control. Perhaps our Govt feels that since they borrow from EPF and LTAT etc that when the time comes, they can default a bit here and there, is it? Debt is debt and must be serviced.

    If you are not aware, when Pak Lah took over, he was overwhelmed with debt repayment as a huge chuck of the Malaysia Plan goes to servicing loans, both domestic and foreign. He discovered that much of the country’s income was already committed to these things. 3 items that cannot change but growing are salaries, maintenance and debt, that whether our economy is growing or not must be met. The larger the debt, the worse it becomes.

    2. On economy contraction, I agree that public sector must lead. All national plans cannot assume private sector taking any lead because if they can’t make money, they will pull out. Such national duty falls on the Govt of the day.

    3. I am agreeable to a deficit budget whether economy is growing or contracting so long as the balance of income to the deficit is well managed. In a contracting economy, it is far more challenging to figure out where income is coming from to fund the deficit. Most likely, more borrowing. If not properly invested to stimulate, it will go into a black hole and the Govt must borrow even more.

    Once debt becomes too large (and to me, too large is when Credit Rating Agencies decide to downgrade us), more complications will spiral inwards and if we are not careful, will implode on us out of control. We can debate this if you want.

    Regarding raising interest rate and cutting public spending, perhaps there is a time and place where conditions are in a flux or consumer spending went out of control. This will cause the household debt to skyrocket and credit card debt to go unserviced. Perhaps this is a description of the present Malaysia situation? I know BNM is considering raising the rates but held back for now given the elections around the corner. But I believe raising the interest rate now is too late because the damage is already done and doing so will make the people suffer even more.

    However, another school of thought is not raising interest rate but education but our country has not reached that maturing or maybe that is wishful thinking that people will act rationally when there is credit available.

    Sorry for a lengthy discourse.


    • I owe you a clarification why I said your opinion was wishy washy.

      This debate started when I condemned Anwars 98 policy. My view is that in 98 “economic crisis, government [should not] push up interest rates and cut down public spending”. I then said “You need to counter this [economic contraction]…. Government must spend more. [and ] take in the deficit coz only government can do it”. Thus Anwar was wrong. i also support capital control to wrest the hot money. (We both agree that the cause of the crisis are the currency attack and consequent economic contraction.)

      Your stand on 98 economic contraction and currency attack had been the following:

      On April 7 your stand was IMF prescription (for high interest rate and cut of public spending) was correct. On the same date you disagreed with our capital control.

      Later on the same day, you agreed that government had to inject in economic contraction but there shall be limits. Later I pointed out that the ratio then was 36% and ask why you have concern. You kept quiet. [this contradicted the 1st stand].

      On 8 April you suddenly argued that increase in government spending will never help since there’s a currency attack. [this contradicted the 2nd stand]

      Later on apr 8 you conceded that at 31% there’s no issue for deficit budget so its acceptable. [this contradicted the 2nd and possibly 3rd stand]

      Then on 9th April again you reiterated the stand that you disagreed with capital control. You put a position that debt is fine as long its sustainable. You want to know how bn is doing it. [this contradicted with 2nd stand]

      Then I pose a question what would you do if there’s a financial crisis and economic contraction on 9th April.

      Then you replied on the same day austerity measure would not work. You also claim low interest won’t work. And you propose strategic government investment. You did not state how to arrest the currency shorting but said its tough to be FM. [another new stand???]

      Later on 9th April, you said austerity drive (high interest tate abd cut in public soending) is a solution to economic contraction. [cannot follow which one you contradicted already]

      Then on April 10 you propose its acceptable for a cut in public spending and rise of interest rate. Then suggested we should put money in strategic industry. [cannot follow which one you contradicted already but definitely the previous stand]

      On April 13 you said fiscal stimulus/public sector spending/ deficit budget used to work but no longer in 98. At that same time you say you agree that government has to spend. But question on how its being spent.[a new stand to focus on income]

      Then later you said:

      1. No difference between RM
      n Foreign debt
      2. In economy contraction, agree that public sector needs to take the lead.
      3. Deficit is fine as long as the balance is struck with income.[now a stand like my initial stand]

      When I pressed that in order to see income we look at etps. you argued etps are other people’s project. Huh? [new stand on income??thought we want to evaluate??]

      You’re not focus. I’ve been patient. You jump from one to another stand contradicting yourself and think people don’t see it. I need you to be consistent.

      Its from the above i view your argument as wishy washing and changing goalposts all the time. Sekejap ya sekejap tak.

      Please have a decency to be consistent. It’s not absolutism I ask.

  17. You seemed to have misunderstood me and if I had written a few different times, I spoke on a few things in different context.

    Allow me to clarify.

    1. In 98 crisis, the standard IMF was curb spending by increasing interest rates and public spending. We have seen this didn’t work because people already stopped spending when currency fluctuated. I also agreed that new public spending should stop immediately until stabilization and know where to spend again because spending during currency crisis is madness throwing good money into a black hole.

    2. I agreed with you during economic contraction that public spending must take lead because private spending will follow profits only, not national duty. This is not contradicting #1, this is made as a general point. If not due to currency crisis without risk of losing any spending unnecessarily, then public spending in strategic areas is a definite.

    3. Thus comes deficit spending. I agreed that during such times where public spending means increasing national debt and go into a deficit budget, we need to balance the income stream. If all goes into borrowing, even more vigilance into how public spending is done.

    4. I said there is no difference between RM and foreign debt in the sense that both are debts and must be repaid. Only difference is the currency exposure. I said that how much debt is too much depends on Rating Agencies when they will rate us down to the point we must devalue the Ringgit. It is not a political debate. It is a mark of the lenders and watchdogs.

    5. I argued that the ETP had many programs belonging to others. I gave you details of the Pengerang project example you chose to highlight and showed you that the ETP was developed backwards taking Dialog’s project and working a strategic Regional Storage piece. In fact, the input came from various leading GLCs and vendors. This was probably done in hope of getting budgets as well as targets for sales. I am giving you the vendors view. ETP is not totally original. Maybe I have not read any strategic and original moves in the ETP yet, so I stand corrected. Thus far, not impressed. The only impressive piece is the quality of presentation and publication. Paying consultants mega bucks to spruce up such information is merely shadow play.

    6. Many items in the ETP are not strategic but wishy washy and I stand by my view on this. Perhaps when we go in detail that we can flush them out or you get to convince me that ETP is really that strategic.

    7. When I said the ETP was somebody else’s work, I alluded to O&G you pointed out and they were Petronas activities converted into ETP. Also Regional Storage is a Dialog activity as it is their primary business stemming from their contracts with Petronas.

    So, although I maintain my views, I do stand corrected and I am open to be convinced.


    • Sorry I just cannot follow you. Can you tell me what is the difference between your position and mine save for capital control.

      When currency is being attacked, what’s your solution other than capital control?

  18. Which can you not follow? I am not quite sure.

    I am not an expert on currency but my understanding is that there were 2 models implemented during the 98 crisis.

    For the IMF assisted countries, no capital control. Malaysia eventually implemented full capital control. Our currency pegged artificially. Short term gain, no further losses. Long term loss, investors continue to doubt Govt who will curb their capital value and flight when they need to do so. Impacts investments and borrowings. Effects still felt today.

    The IMF assisted countries suffered more than Malaysia who pegged the Ringgit. They implemented fiscal tightening policies, people and businesses suffered short term. Long term, FDI more open to invest as seen today. Malaysia is not a country of choice. Improvement came when currency pegged removed to lock into a US-dominated basket of currencies, a similar action taken by China and now Ringgit is traded once again.

    I am sorry, I don’t have a solution and whoever is the Govt of the day the next time we get hit, they better be ready.

    What do you think we should be doing now to either avert the crisis or to weather it better? Is it immediate capital control? I should think the Govt will have a bigger and broader view of the causes and effects since they can see and know more details than us.

    Another side note. Malaysia cannot emulate China’s practice in currency control because our economic power is nothing like China. The world markets need China, they don’t need Malaysia. Hope we play our cards well. So far, so good.

    • I’ve stated my position many times. Please read my last two comments.

      From the beginning my position is the same. In economic contraction we need to adopt Keynesian method of Increasing public spending, lower the interest rate and ipso facto deficit spending.

      If our currency is being attack we adopt capital control.

      This is what we should adopt and I strongly condemn Anwar in 98 for incoherent unacceptable policy not benefitting us.

      All leading economies now adopted this keynesian method and capital control is accepted as a tool to handle hot money and being promoted by IMF.

      Don’t follow why you object this from beginning. I cannot follow anymore your confusing stands. Youre not a person to admit anything and keep adding up the divergence.

  19. P2BM – I like your free-ranging arguments on this subject – very informative. Yes, don’t do all that the USA or China do – they are too big to be allowed to fail but not Malaysia.

  20. Ellese

    You make your economic position sound like exact science. If like this, do this. If like that, do that. So your combo is lower interest rate, increase public spending in any economic crisis and add capital control if caused by hot money. I get you. But is any situation so black and white as we debate or there are other parameters and possible ramifications otherwise? I am not so sure you can strictly prescribe the meds blindly. I did agree in theory to deficit budgets with balanced income and public spending taking the lead.

    It is easy with hindsight to blame Anwar for not taking the right moves in the 98 crisis but how would you really know if he would have gone all the way south since he was unceremoniously castigated prematurely? And Nor Mohd Yakcop had not told Mahathir about pegging the RM yet until sometime after.

    We will never know, will we?

    I would prefer to debate if Malaysia had done everything possible now to enable our economic defense if the cycle ever strike us again in the near future as you alluded, and I agree, that it would. I prefer pragmatic discussions what to do next rather than what should have been done. I leave it to you since this is your site.


    • Goodness. 98 facts are already there. I was even there following Anwar and his evonomic advisor jomo. They pushed for higher interest rate and cut in spending. This is stupid. To you anybody cannot judge this Anwar policy but everyone can judge capital control measures. Apa ni? Now everybody have judged one way not following Anwars policy in times of crisis and you still support Anwars high interest rate and cut of deficit spending (despite your write to the contrary above)

      Don’t argue to say this is not exact science but you can condemned so many policies based on this not so exact science. I told you I’ve enough of your mulberry bush method. You can’t decide its your issue. We have enough worldwide historical evidence to follow Keynes. People learn from past mistakes and you want to repeat the mistake because of Anwar. Forget it man.

  21. I guess you can’t follow what I write.

    I am wondering how you can conclude all the facts are there and that economics to you is pure science that with the stats you got that’s all there is.

    I contend that although I disagree with raising interest rates because it won’t work after the damage is done and will make the people suffer even more.

    But to hang it on Anwar which is a play on personality that clouds the debate is something I am not prepared to do so but you seem hung up on it. Maybe you have been with him and I have not.

    I do not condemn policies. I condemn the corrupt implementation and culture of doing things but somehow this got lost in your reading of my pieces. Policies are not bad, people implementing them are. If implementation is good, deficit budget is not so risky.

    I do not know Anwar or Jomo and what they did during the crisis. I just feel that Anwar didn’t have the time to do it and I will try not to judge a person if I am uncertain. I know what Mahathir did and the effects till today which you have ignored or avoided talking about.

    I noticed you started a new thread posting. Can you do one that is about future so that when it happens, we can compare your view of “exact science” of economic theory?


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