The truth does not need spinning
just wonder what's the percentage in terms of debt vs national income.the steep increase in 1997 could be due to the ringgit dipping from USD1 = RM2.50 to USD1 = RM3.8 within a year.if we look at the success of Courts Mammoth's business model and you wonder if the custodian of the national's treasury are subscribing to the same ideas as the customers of Courts Mammoth.Singapore has zero national debts and been giving "government dividends" to its citizens for some years and the 'payback ' has been extended in the recent budget in a bid to safeguard citizens' job (case in point is case rebate for CPF contributing employers)In Malaysia, in terms of economic difficulties, we have DBKL extending the parking collection and reluctance to lower down electricity tariff rates as well as actual decrease in fuel subsidy. One way to manage national debts is to cut down on spending. We never needed submarines and air superiority jet fighters as we are not involved in that kind of conflict.Opening up our economy and encouraging demand for ringgit will actually decrease national debt (imagine if RM can jump from the present RM3.60 to USD 1 back to RM2.5 to USD1) and make our imports cheaper. With the lower of national debts, cheaper imports and more job opportunities for all, this form of poverty eradication approach is definitely superior to race-based, connected-dependent; crony-contractor focused; and rent-seeker-inclined approached that been disguised as a race-championed holy grail.Lee Wee Tak
Another thing, with the huge increase in crude price in 2006-08, how come the debt remained unreduced but rather an increase?if you are in debt, and if you suddenly have a wind fall (in Malaysia's case higher income from palm oil and crude), should you not pay off your debt? imagine Ah Kow loves to buy hand phones, digital cameras etc hence incurred a lot of credit card debts. Suddenly Ah Kow touched a lottery and the winnings alone can wipe out his debt. Instead of paying off the credit card debts, Ah Kow used the winning to buy more and more and leave his credit card debts as it is and come 2009, his employer told him to take a BIG pay cut....Lee Wee Tak
just realise the steep increase started when Malaysia started running the deficit budget, right? I remember reading somewhere that Malaysia has been on a decade of deficit budgetso there is the myth of Mahathirism solved. One of his greatest achievement in my book is that he rescued Malaysian from the 1997 financial crises by pegging the ringgit, so I thought.with the 10 year deficit, it is like borrowing money to prop up the renovation of your house to make it look good during the festive season. it's a short fix and until such time the burden of the debt, interest and foreign currency impact hits on your capacity to earn. If Malaysia's capability to earn foreign revenue increased, we should at least see some reduction in external debt.Lee Wee Tak
Wee Tak,Interesting synopsis there. There are a few things which I must further check then:-the gdp, gnp-whether the figures above are subject to forex fluctuations-composition of the debts by segmentWill get back in the next posting. Thanks!!
looking forward for more juicy details, matewt