Monday, 23 June 2014

The Complacency Factor

One thing I have learned in life is to take everything with a pinch of salt.

I analyse every piece of news that lands on my lap and even mull over the motive behind it.

Naturally, that was what I did when I came across this article from Bloomberg View that questions if Malaysia is Asia's Weakest Link.

For those of you in the know, Michael Bloomberg was a former mayor of New York City who in an attempt to reduce crime in the city, instated rather racist laws like "stop and search" in which black young men were targeted by the police.

I lost my respect for him then. He later attempted to control the in-flow of guns into the city by regulating them, but that earned him the wrath of the National Rifle Association of America (who are a bunch of nutcases themselves).

Anyway, by that time, it was too late, as both the right wing and left wing hated him in possibly equal measures.

Bill de Blasio appears to have done a much better job so far, but I digress.

Back to the article: Oxford Economics apparently ranks Malaysia the "riskiest country in Asia of those we consider," more so than India, Indonesia and even coup-happy Thailand.

Why, you ask.

Malaysia wasn't included in Morgan Stanley's "fragile five" list of shaky emerging economies last year, as were India and Indonesia.

But Fowler scratches at a number of Malaysian vulnerabilities that deserve more attention: external debt levels that in recent years have risen to close to 40 percent of gross domestic product; a higher public debt ratio than India; the biggest short-term capital flows among the 13 major emerging markets Oxford tracks, including Indonesia; and a shrinking current-account surplus.

I really do take many "financial services" corporations very lightly. After all, they are the ones who predict the strength of economies with grave seriousness - until they are proven to be completely wrong!

They then lose huge sums of money and promptly run to their governments for a bail-out of which the tax-payer bears the cost.

Anyway, the article does have some valid points, which is why I brought it up in the first place:

What really concerns Oxford, and myself, is the complacency factor in Putrajaya. Malaysia is effectively a one-party state, having effectively been ruled by the same party for six decades.

Its 40-year-old, pro-Malay affirmative-action program chips away at the country's competitiveness more and more each passing year.

The scheme, which disenfranchises Malaysia's Chinese and Indian minorities, is a productivity and innovation killer. It also has a corrupting influence on the political and business culture.

"A climate of entitlement amongst the Malay community limits entrepreneurialism and vested interests within the United Malays National Organization still resist change," Fowler argues.

Read the rest of the article on the web.

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