With Thanks to FMT
Worrying state of our nation
Our people, our businesses and our government are fueling growth by unsustainable borrowing.
COMMENT
On the economic front Malaysia is
in crisis. Cars and houses are literally burying Malaysians under a sea of
debt.
Easy credit and low lending rates
from our banks mean that our household debt to GDP has been growing at a rate
of 12 percent annually since 2008 – making Malaysia household debt to GDP ratio
at 83 percent, Southeast Asia’s highest.
Forty-seven percent of Malaysians
are now in “serious debts” having to spend 30 percent of their gross income
paying for their car, house and credit card debts.
Since 2008:
· Loans increased by 80 percent in
the private sector.
· Car registration is up by 50%.
· Year on year increase in
property prices.
· Mortgage loan accounts for 50%
of household debt.
In the business sector, corporate
bonds and bank loans are at 95.8 percent of GDP in 2013.
This mountain of debt in Malaysian
households and its business sector is part of the reason for the continued
growth of Malaysia’s USD$303 billion economy at an average six per cent in
recent years.
The other factor fueling this
growth is our government incurring fiscal deficits for the past 15 years to
bolster the country’s economy.
Today Malaysia’s public
debt-to-GDP stands at 53.2 percent – second only to Sri Lanka among Asian
countries.
What all these say is simply this:
Our people, our businesses and our government are fueling growth by
unsustainable borrowing – and we are all heading for a fall even as another
Asian Financial Crisis similar to the one in 1977 looms in the not too distant
future.
We need a strong, confident and
knowledgeable federal government in Putrajaya to steer us through this coming
financial crisis.
Given the prevailing political
demise of Umno’s hegemony over all things politics in Malaysia as reflected in
the 13th general election when the Barisan Nasional coalition lost its popular
mandate to govern to Pakatan Rakyat, that does seem a remote possibility.
On the political front, political
power in Malaysia is no longer the purview of race, religion or money.
Ordinary
Malaysians
It now lies in the hands of
ordinary Malaysians of all races, all religions driven not by any particular
political persuasion but more by the belief that in their hands now lie the
future of their country.
They are not content to just wait
for the next election to cast their votes to decide who will form government.
No! This generation of Malaysian
are now taking things into their own hands and dragging an obstinate BN and
Pakatan Rakyat screaming into the future that they want.
A future where corrupt, arrogant
and irresponsible politicians have no place in government and where government
is held accountable for their every action.
Apart from the unsustainable
borrowing by households, the business sector and the government, there is a
need to hold this BN government accountable for the illicit money outflow
amounting to RM251.6 billion in just 2013.
If we go back to the period
between 2000 to 2008, the sum of RM930 billion was lost in the same way.
What portion of this illicit money
outflow can be attributed to the connivance of corrupt politicians and their
cronies remains to be seen but suffice to say that the illicit outflow is much
greater than the inflow of foreign investment into Malaysia.
All this is happening at a time
when Malaysia’s current account surplus is deteriorating due to weaker export
earnings.
All is not well with the state of
our nation today.
CT Ali is a reformist who
believes in Pakatan Rakyat’s ideologies. He is a FMT columnist.
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