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Economic Stimulation

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Category: Ramblings
Published Date Written by Jason Loo

ETP
What is going to happen few years from now to our economy ? I am sure a lot of you have read my articles on the economic stimulus program being lauded by the government, from ETP to NKRAs.

Some initiaitive have also been launched by the govt to reduce the increasing prices of goods (but not properties) as well as the launching of more Kedai Rakyat 1 Malaysias around the nation.

What is missing however is the feasability of some of the programs. This includes the vision of having a high-tech and highly knowledgable worker force in Malaysia by 2020. Let me tell you why this might not be achiveable. Singapore is offering 20Mbps packages to Singapore subscribers for SGD 50 a month. If not converted, this is a pretty reasonable price to pay. Why can't we do the same ? ....

fibre-optic

Comparatively, in Malaysia which just launched its HSBB, subscribers are charged RM 149 for 5Mbps monthly. This is rather pathetic for the Malaysian subscriber, more so if the SGD is converted into RM.

globaltrendsconnectedness

How can we as a society progress if the technology development is so poor. To connect the Malaysian people to the outside world, it must keep up with information flow, event happenings as well as decisions being made all over the world. How is this possible without the advent of faster Internet connections and the ability for us to match that of our nearest competitor.

Some have criticised Singaporeans as being 'kiasu' and 'kiasi' which to me has its pros and cons. In the business and corporate world, this is a necessity for progress to be made whether in deals, organization of work, delivery of projects or even work discipline. At home of course, it maybe a different matter.

Malaysians should adopt this attitude to a degree to ensure there is a high discipline at work, ensuring everyone throughout the organization work to make the company a success, not just for themselves but the entire organization as a whole. This applies to contractors and vendors working for the organization as well.

HOME-LOAN

On another front as well, the latest issue to emerge is government's initiative to tighten the housing loan requirements based on net income rather than gross. The concern highlighted by industry players were that house affordability would be lowered significantly, thereby depriving lower income people from buying houses of their own.

One aspect that is missing from this concern is that while
it allows people to buy houses, but how many in the long term can maintain the debt ratio, plus the cost burdens of raising a family.

Housing-Loan

One result that the government see from this initiative is the reduction in housing property prices, which of course have ballooned up tremendously over the past few years. While this is partially caused by the price increase in construction materials, the price range for a normal 20 x 70 double storey terrace has also been fixed higher than what most people can afford.

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For example, for a RM
600k house, the loan applicant must pay more than RM 3k for the monthly installments at current BLR rates. I believe at the moment, the average price ceiling for executive levels below managerial level are earning a gross income of about 8.5k a month. This is discounting the fact if that person has business outside work.For a parent of two earning the same amount, (RM 17k per month), this would of course be ideal but again I do not think that majority of married couple are earning such a high household income.

gula

On top of that, this new initiative should be implemented on personal loans, which is becoming more rampant now. The interest of personal loans is typically higher than normal loans within a short
period of time. The convenience of this type of loan has compelled a lot of people to take it up and increasing the debt ratio.

So on top of the house loan, personal loan also becomes a burden to
monthly earnings.

In summary, Goverment is making efforts to curb the rising costs of living. At the same time, they are also stimulating the economy which is also causing prices of goods to rise in tandem. So even though we have lower house prices in future, the prices of goods will still be a burden to any household if there's no control over the gradually bu surely increasing food and commodity prices.

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Economic Anxiety

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Category: Ramblings
Published Date Written by Jason Loo

food-prices-rise

The past weeks has seen a lot of governments raising issues on the increasing cost of food and livelihood of its citizens. Govt initiatives to curb the increase is to introduce several 1Malaysia branded
stores as well as to promote made in Malaysia products.

Among some of the highlights of the week is the undisputable fact that food prices are going up globally and the gradual decline of food stocks. With the World Food Bank Price index increasing by 33% over a one eyar period, this has made it harder on the poor to fork up more money just to pay for the same food.

Worldwide as well, the obsession to churn waste or food into bio-fuels have resulted in the usage of this food stocks for the purpose of energy production. This is also one of the contributing factors in the low quantity of global food stocks. Quoted from the same article above, "The World Bank said the move into production for biofuels was also driving up the price of maize, noting that in the first four months of 2011, U.S. maize demand for ethanol production rose 8 percent from the same period last year."

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One of the initiatives lauded by the government is to introduce the Kedai Rakyat 1 Malaysia and the encouragement of Malaysian consumers to buy locally made products. This of course potentially drives the consumption of local products instead of foreign ones. I believe this would be a good thing provided local products can match the quality, consistency and durability of foreign made products.

One thing that I noticed when I shop in hypermarkets and I am sure you would have noticed too. The prices for the self-branded products are higher than typical products sold. E.g. 3-in-1 chocolate malt drinks as well as bottled grinded coffee powder. After trying out the hypermarket, I would dare say the taste is a little better but still does not justify the high price.

A recent article by Malaysian Insider also chronicles how are the lifestyles of different families in the Klang Valley. The gist of it is that middle-income groups are tightening their belts while the poorer ones have to either spend more to buy lesser or same quality / quantity of food products.

Kedai Rakyat 1 Malaysia



The same article also highlighted that "The inflation in Malaysia, and the rest of the world, follows two worldwide trends: the surge in oil price caused by the conflict in the Middle East, and the increased demand from heavily-populated countries China and India, UN’s Food and Agriculture Organisation has said.

The price of vegetables alone surged 11.5 per cent from last year, way more than meat (2.9 per cent), seafood (3.0 per cent) and dairy (5.2 per cent) according to the Department of Statistics Malaysia."

If you have time as well, read the comments following the article and have a look see what the average Malaysians are saying.

One interesting idea is the concept of growing your own food. Of course, you would need to have your own land and do your own gardening.

Before you start though, please research carefully on the
correct method and materials to use. I would say this is possible too as the new generation of houses seems to be semi-detached varieties with a small piece of land. Food that could be grown could be like chillies.

Now, some folks have criticized other people who always complain about the increase in food prices, lamenting about the drastic change in prices of goods. Fact is, I guess if we as Malaysians and as citizens in this generation do not step up and highlight this points to the people in charge, it will never be noticed. Imagine the increase year by year and your child is ready to go out on his own.

food-prices-rising

Unless the parent earns more than double their income or savings by the time their child is an adult, this will place a heavy burden on our next and next generations. At least, that's
my two cents ... (i still can't figure out why the expression only values my own thoughts at two cents only) ...  :)

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