Be frugal but don't stop spending
RAM Consulting Services group chief economist Dr Yeah Kim Leng said people could car pool, postpone buying that extra car and travel domestically.
"Don't make unnecessary purchases but don't stop spending. If everyone stops spending, it won't be good for the economy."
He said the silver lining in the global crisis was the drop in oil prices, which would trigger a price reduction in some items.
This would bring down inflation and increase consumer spending, he said.
However, sectors that could be affected by the crisis were manufacturing and transportation, which meant that the workers could expect a pay cut, he said.
"Some companies will also start cost-saving measures."
It is learnt that one company had started a three-day work schedule.
Yeah said it was unlikely that local manufacturing workers would be retrenched as foreign workers would be the first to go if manufacturing companies trimmed their exports to the US.
He warned fresh graduates not to be too fussy about jobs as companies, in view of the global crisis, may not be hiring.
Manufacturing industry financial analyst Allan Kronenburgh said he could not see Malaysia going into a recession as there was money to go around.
But some people were holding on to their cash, thus, creating an artificial shortage, he added.
"People are prudent, very careful in their spending, avoiding luxury items and preferring to spend on essentials only.
"The man in the street will depend on government subsidies for essential consumer products like rice and bread.
"On the same score, others are not making payments for goods and services rendered, so much so that it is creating a chain reaction: 'If you don't pay me, I don't pay others'.
"But this doesn't happen in the purchase of raw materials which have to be paid upfront."
Those with cash, he said, may take advantage of the situation by buying cheaper stocks on the share market.
"But then again, they are taking a gamble owing to market uncertainty.
"Brokers, however, will make money as long as there is trading with a willing buyer and a willing seller."
However, he expected the market to recover in six months, given the government's commitment to provide financial support.
Daiwa Securities chief Asia economist Presenjit Basu said Asia, particularly Malaysia, could manage itself following its experience in the 1997 global financial crisis.
"Asia is in relatively good shape. Malaysia, for instance, has a massive surplus account.
"It is one of the safest places to invest in."
Malaysian Rating Corporation chief executive officer Mohd Razlan Mohamed said everyone knew and understood the consequences of the global market downturn.
The US and European Union governments have announced rescue packages worth billions of dollars but the market has still to recover.
"This is because the money has yet to get down to consumers. Banks are jittery and reluctant to give out loans easily.
"They want to save themselves from becoming victims of the sluggish economy."
On the local market, he said that despite Malaysia having a strong banking system, it was similarly affected due to several factors like the uncertain political scenario.
Source: NST Online
Then, the not so good news. Or rather...the no-news.
Why no news on tackling crisis?
I FIND it incredible that the unprecedented global financial crisis that has governments everywhere on edge and frantically finding solutions finds little or no mention in Malaysian news of what the government is doing to tackle the imminent fallout.
Perhaps Malaysia has a secret recipe for tackling financial crises having successfully survived one over a decade ago. Or is it something else?
The global crisis that originated from the US housing and sub-prime mortgage crash spread worldwide and massacred the world’s stock markets are now entering the dangerous phase of damaging businesses and economies, and creating widespread unemployment.
The domino effect of the credit freeze worldwide is going to be evident in the developed world. But do I sense a tidak apa attitude in Malaysia and in the region?
The carnage in the financial and stock markets will inevitably affect the region yet we don’t see Asean calling for an emergency meeting to deal with the global crisis and its impact on the region.
That speaks volumes about their confidence or are they simply preoccupied with more important things?
The suggestion that Malaysia having de-coupled its economy from the US will not be badly affected is naive to say the least.
I read Tengku Razaleigh Hamzah’s statement on the urgency to deal with the crisis which is both relevant and timely and can’t help empathising with him in his frustration over the Umno top leadership transition pact.
People have to ask whether this sort of political wheeling and dealing is in the national interest and whether the country can afford to bide time while the incumbent leader works out his remaining days when the country faces a global financial and economic crisis that happens only “once in a generation.”
I scoured all the English newspapers but could hardly find any worthy mention of strong and decisive action by the politicians to face the imminent impact of the global catastrophe except the lonely voices of concerned politicians who should be asking for an emergency seating of Parliament to unite the country and form a bi partisan approach to face the crisis.
More than ever Malaysia needs a prime minster who is diligent and capable and able to inspire confidence at home and abroad to prepare the country for the worst that the global fallout will present.
But what we can’t afford is a lack of leadership in this crucial hour.
It is easy for some politicians to talk about attracting foreign investments to take advantage of the US problems but why would anyone want to invest in Malaysia when there are now even more attractive opportunities elsewhere?
The financial crisis is as much a crisis of confidence. But I don’t see the politicians doing their utmost to bolster public confidence. Instead they appear more concerned about their personal interests than the country’s national interest.
If our politicians are so sure that Malaysia will weather the economic storm and that is why they are not spending too much time worrying about the global crisis then I guess we are truly a lucky country.
Ignorance is bliss and inaction is the panacea the world has yet to discover.
Source: The Star Online
My sentiments exactly, Steve. Uncles, come on lah!!!