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Saturday 3 September 2016

Answering A Kadir Jasin's "Kewangan Kerajaan Pusat genting"

Yesterday, I had posted a reply to the irresponsible fake "Tun Daim" whatsapp message that is circulating. I had pointed out that the message sole purpose seems to be spreading lies to incite hatred and fears about the economy which would stop people from spending and investing - a self-fulfiling prophecy that if left unchecked, will cause damage to our economy.

Today, yet another stalwart of Mahathir has published an article in Sinar Harian that also seems to have the same purpose as the "Tun Daim" message.

A Kadir Jasin, a long-time Mahathir supporter, said that Malaysia's government debt had increased from RM250 billion in 2010 to RM656 billion in June this year.

Well, A Kadir is wrong. The govt debt in 2010 is RM407.1 billion or 53.15% of our GDP. How can Kadir make such a shocking mistake or was he trying to deceive?

Even at RM656 billion, our government debt is still within the 55% debt to GDP ratio limit as our economy has expanded since 2010.

Does Kadir also realize the size of Malaysia's GDP/economy today is almost 3 1/2 times the size of what it was when Mahathir retired in 2003?


As long as our ratio is within limits, the overall debt can grow as our yearly income and economy size will also grow.

A simple illustration to show this:

Who is more likely to go bankrupt first?

A person whose income is RM36k per year but  have debt of RM40k (Malaysia's GDP in 1987 is USD36 billion and govt debt was USD40 billion) or a person whose income is now RM350k per year and have debt of RM130k? 
Even though the actual debt amount is now 3 times more but the person whose income is RM36k per year will go bankrupt first.

Here is an excerpt from the 2012 book "Malaysia's Development Challenges: Graduating from the Middle". You can also google for Malaysia's debt-to-GDP in the 1980s and what Mahathir did in his first 7 years in charge.


We did not go bankrupt and our country crash and burn at more than 100% Debt-to-GDP so why should we go bankrupt now at 55%?

Here is a more comprehensive chart showing this relationship:


As mentioned yesterday, according to the CIA's world factbook, Malaysia at 54% is at 71st place in the countries with the highest debt to GDP ratio.

According to PakaTun logic, this means that these 70 countries will have to go bankrupt before Malaysia's turn.

JAPAN, ZIMBABWE, GREECE, LEBANON, ITALY, PORTUGAL, ERITREA, JAMAICA, CABO VERDE, GRENADA, CYPRUS, BELGIUM, SINGAPORE, PUERTO RICO, IRELAND, BARBADOS, SPAIN, BHUTAN, FRANCE, CANADA, UKRAINE, SAO TOME AND PRINCIPE, YEMEN, EGYPT, UNITED KINGDOM, CROATIA, ANTIGUA AND BARBUDA, EUROPEAN UNION, AUSTRIA, SAINT KITTS AND NEVIS, ICELAND, BELIZE, JORDAN, SAINT LUCIA, GHANA, HUNGARY, SERBIA, SRI LANKA, UNITED STATES, MOROCCO, ALBANIA, MALDIVES, SUDAN, MONGOLIA, GERMANY, DOMINICA, NETHERLANDS, URUGUAY, GUYANA, BRAZIL, SAINT VINCENT AND THE GRENADINES, ARUBA, BAHRAIN, EL SALVADOR, PAKISTAN, ISRAEL, SLOVENIA, FINLAND, MAURITIUS, MALAWI, MALTA, ZAMBIA, COSTA RICA, MONTENEGRO, MOZAMBIQUE, THE BAHAMAS, SYRIA, ANGOLA, SENEGAL, SEYCHELLES.

Those who hate our government and wishes for Malaysia will just simply have to wait in line behind those countries mentioned above.

Kadir also said that Malaysia is running a budget deficit but conceded that it has reduced from 6.7% in 2009 to 3.2% in 2015.

But does Kadir know that Najib ran a bigger deficit in 2009 and 2010 to save our economy from the Great Global Recession (the worst since the Great Depression in the 1930s) but since 2011, have run a deficit that is smaller (and getting increasingly smaller) compared to the last 5 years that Mahathir ran the country up to 2003?


As you can see, Malaysia's budget deficit is getting progressively smaller due to good management. This is why the World Bank and IMF praises Najib's government on economic management and the major international credit ratings agencies all have A- investment grade ratings and a stable outlook for Malaysia.

If Kadir really wants to warn someone regarding unrestrained government spending then I suggest he writes an open letter to Mahathir's allies in the DAP Penang Government as their state annual spending has jumped many folds since they took over in 2008. They are definitely more in need of an "A Kadir Jasin" warning.


Kadir ended his article with saying that the government should be truthful to the rakyat on the true state of the economy and that the "Ekonomi tidak berbohong" or "The economy doesn't lie".

I agree but he did not say that Mahathir's supporters won't lie when writing about the economy.

Mahathir supporters and the opposition are the ones who should be truthful on the true state of the economy instead of inciting fears based on false data or faulty interpretation.

Najib saved us from the Great Recession following the US Sub-prime crash in the 2007-2008. By all accounts and data (instead of air liur), the economy has been well managed despite a big slump in oil revenues amidst the commodities crash in second half 2014 until now.

Let's have confidence that Najib's government will continue to steer us well. He has not failed like Mahathir had.

Throughout Mahathir's 22 years in charge, he led us through two very severe recessions in the mid 1980s and in 1998 and three major slowdowns - the last of which was just before he retired.

In the face of the current BREXIT and the China slowdown, which are global issues, it is better for people like Kadir and their gang to support and instill confidence in the economy rather than trying to intentionally or inadvertently harm the economy.

I wrote this yesterday but will repeat it again:

The opposition frequently spread false, misleading lies such as this to destroy confidence in what is known as a "self-fulfilling prophecy". Imagine if everyone believe what is in this message then no one will spend and if no one will spend then all the shops will close down, he factories will also close down and then the banks will close down and et cetera. Somewhere along the line, you and I and everyone else will also lose their jobs or business.

Therefore, spreading such lies is not helpful to Malaysia but you are harming Malaysia and ourselves.

These people don't care what happens to Malaysia as long as they get what they want. They think that if the economy is bad then it is easier for them to win power. These people are despicable.

Do not fall for their lies and spread such negative messages to incite hate, create fear which will eventually end up hurting ourselves.

Stop it, you fake hateful people with hidden agenda.

Trying to destroy your own country's economy and bringing harm to tens of millions just for your political agenda is not only treachery but brings to mind the following saying.

"Don't cut off your nose to spite your face."

15 comments:

  1. What caught my eye is the one u mentioned 'he has not failed like mahathir had'

    Najib saved us from subprime crisis. Yes sure he had and we all agreed on that. SP1 and SP2 were done with zeti as steady hands and all the machineries of the government steered us out.

    Lucky for us that mahathir got najib elected as DPM and had Abdullah in squared and had to appoint najib. Too bad mahathir he was screwed by the man he made DPM and PM.

    I figure you are in 40s give and take. So whatever u have now is through solid foundation built by mahathir. Its good to know that you owed mahathir so much.

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  2. Mahathir never planned for 40% of the population. That is why when he bought the estates from the British he never gave even a small percentage to Indians having slogged for 1 century in the estate holed under severe British regulations. Instead the estates were given lock, stock and barrel to people who did not have anything to do with estates. Hope Mahathir and his cronies lands in jail for alll that he has done. Najib should show him no mercy. Start strangling his source of money and finally let the nooze aroubd his neck do the job. Worse still for Sarawakians and Sabahans were treated like foreigners and they are minority due to the secret demographic change brought about by Mahathir.

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  3. Totally agreed with the article. However, government should at least try to progressively reducing the debt. General public will generally have a bad perception if the amount of debt increase. Just use some extra money to pay the debt. With less debt, there is less money to be spent to serve the debt, without effecting healthy cash flow. It is much easier to make decision, especially fast decision. Japan already had difficulties to pay the interest, let alone the principal.

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    Replies
    1. Having slight debts is generally healthy. Of course, no debts is better! But having a healthy debt gives the perception that the Gov is willing to take some risks and wont allow the economy to stagnate.
      Just like you and me, why we take loans(debts) to buy car and house? It is debt too, right? Its becoz we have confident the percentage of that debt to our income is low enough for us to pay it off on the long term. Same thing goes for Gov as well.

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  4. Tun has left a trail long legacy of debts to to inherited till our 7th generation.His economic and financial purported decision failure compounded with long list of proxies and nominees bailout has been further damaging publicly with his post retirement antics.The poker face tun will be cursed even six feet under by the masses and his blemished legacy will be remembered as the fallen guy from Kubang Pasu.

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  5. Inilah SOP mereka,menggunakan data yg tidak benar atau separuh benar kemudian mereka menganalisanya dan mengolahnya mengikut selera mereka tanpa mengkut teori standard yg di terima umum.Yg positif di katakan negetif dan sebaliknya,kecuali perkara yg memang memenuhi niat mereka.Tak salah lagi bahawa ,inilah juga caranya mereka gembar gemburkan berkaitan dgn 1MDB,berbohong dgn niat jahat.Memalukan.

    ReplyDelete
  6. Bagi lah apa sahaja alasan untuk meng'halal'kan segala salah laku pemimpin BN sekarang… kami rakyat dah hilang hormat dan kepercayaan kepada kepimpinan sekarang…

    ReplyDelete
    Replies
    1. Macam lah pemimpin pembangkang sangat berkaliber, semua pun 2x5. Cakap tak serupa bikin, tapi suruh rakyat mesti ikut apa mereka cakap dan tak boleh persoal mereka. Kalau tidak, akan dipanggil agen BN, pembelot negara, kroni, korup, pemakan dedak, dan lain-lain.

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    2. Bodoh sombong *Anonymous 4 September 2016 at 14:12

      Mata pun buta tengok Selangor & Penang ada integriti ke? Merekalah penyumbang rasuah nombor wahid di Malaysia.Kerajaan Kelantan yang dapat dedak dari Kerajaan pusat.

      Delete
  7. 14.12
    Who is kami rakyat
    You mean I am not rakyat?
    Most thingking rakyat is not ia the basket with you.....fly kite

    ReplyDelete
  8. As usual Kadir Jasin with his rubbish and we can't ignore him as well as there are people who believes in all his rubbish article as well.
    Good analysis from LSS explaining with supporting facts.
    Thank you.

    ReplyDelete
  9. yang heran nape boleh caya dgn sarawak report, bukankah dulu swak report dianggap sampah oleh ramai rakyat, sbb dulu mmg betul2 terbukti sampah cara pemberitaan dia ttg sarawak dan msia.
    Satu lagi nape dok percaya dgn makhluk yg bangsa negro di DOJ Us tu, bukankah dia ni dulu yg cakap di Iraq tu ada senjata pemusnah, yg dijadikan alasan yg kukuh utk bush musnahkan iraq dan rakyatnya?
    Akhirnya mereka sahkan tiada pun senjata yg disebut oleh dia ni.
    So kalu kafir begini boleh lg ke kita percaya, dimulutnya penuh darah org Islam, boleh ke kita bersekongkol lg.

    Jadi tak payah rosakkan hati kita, sbb yg akan kita hadapi adalah dgn malaikat rabul jalil, masing2 kubur masing2, seksa dan bahagia bergantung apa yg kita percaya, kita buat dan kita lakukan.
    Beranikah kita hadapinya dgn lakuan kita tiada dalil yg sohih, apatah lg bergantung dalil dari org yg tak boleh dipercayai malah pembunuh umat Islam juga??

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  10. Anon 21:15 Full support u. brilliant

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  11. Facts and figures are there. This is what we call info from reliable source. From there, we deduce.

    ReplyDelete