I like the article that appeared in The Malaysian Reserve today. It comprehensively dealt with our current economic issue and summarily dismissed Idris Jala’s notion that the country will go bankrupt in 2019. It is a good read and facts presented are substantiated with statistical figures to strengthen each argument. A must read for the average people like us. Please click the article below for a better view.
I like the last paragraph – “I suspect Idris will be more tactful and politically sensitive in future. He should have 100% confidence in the current government that it won’t allow the country to go bankrupt. It has an excellent track record in effectively and efficiently managing it for the last 53 years.”
I believe the article above will answer and rebut all the doomsayers in the commentary section of the previous article.
* Update 7.15pm – The writer of the article is in fact the Blogger Hidup Tuah.
jebatmustdie 
Next time Idris Jala is cordially invited to speak without any facts to back him up so that people will see how clever he is.
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so should the subsidy be cut or not? I’m still confused and a bit skeptical when it comes numbers. who was it that said “lies,damned lies, and statistics”?
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Well done, Datuk Akbar!
Teringin nak dengar apa lagi alasan kem “Potong” selepas ini… :-p
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Yah correct. The current government will make sure we will not be bankrupt.
How the government intends to do this:
– remove subsidies
– introduce GST
– encourage sports gambling.
– sell KTM land to Singapore
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Malaysia is banktrupt of people with new ideas. Bankrupt with people who can accept novel ideas.
Everytime someone speaks about new things, the perkasa types will blackmail with havoc if implemented.
Idris Jala and Amirsham have more credibility than many who comment in the blog here.
Singapore may have more debts, but the government spent the money on highways, mrt’s, and are leased to their private corporations such a LTA (land Transport authority) and SMRT.
Malaysia, on the other hand, has a railway infastrsucture which is neglected, so many have to purchase their own cars, thereby shoving the debt burden to the individual from the govenrment.
What many fail to understand is, The govenrment debt burden is increasing 15% annually. That means, the govenrment is just like those who spend on their credit cards and cannot earn enough to pay back the amount spent.
Hence the NEM is formalised to check this phenomena and possible, reverse the trend.
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JOKE OF THE DAY: Haris Ibrahim thinks Pakatan can produce a fair and balanced newspaper….
Read all about it HERE
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Dear jebatmustdie,
Hope u can elaborate on the recent threat/blackmail by MCA and the Federation of Sundry Goods Merchants Associations on Malaysia not to sell flour, cooking oil and sugar to the public starting from june 15. looks like mca is going with the towkays on this..making a quick buck and harassing the rakyat..what with the school holidays and the numerous kenduris ..MCA have conveniently forgotten that they are part of the ruling coalition. If you have to disagree, why burden the rakyat? There should be more ways to skin a cat. Looks like MCA is giving chinese in malaysia a bad name..as you know a lot of these assoc members are chinese.
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JMD,
What Idris Jala said can be true if the financial scandals continue to deplete the country’s financial resources. The corrupt Umno/Bn politicians have indulged in this white collar robbery for the past 30 years or so, stealing the rakyat’s money in the billions. What Barry Wain said in his book Malaysian Maverick about Mahathir is 100% true. He stole with his cronies or unaccounted for RM100 billion of the rakyat’s money. The timber robber of Sarawak Taib has also stolen billions of the rakyat’s money. If this trend continues, how not to go bankrupt. Slashing the subsidies will only affect the poor. There is no guarantee that the sliced subsidies will go to the govt coffer. It could end up in the Umno/Bn’s pocket. The only solution is for the scandal after scandal must stop.
JMD : Have you actually read the entire book? I do hope you believe the whole contents of the book and not just the content of a paragraph. Thank you.
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agreed!!
seems debt is main problem in 1998 economic crisis…this situation same as dangerous as foreign debt(borrowing money from foreign entity)..referring 1998’s situation, Malaysia lend US$42billion(assumption) as debt..in pre-crisis, the debt is in RM105.7bilion(RM2.5=$1) and skyrocketing to RM160.6(RM3.8=$1)..
but it’s a clear picture how our economy collapse in 1998..
therefore,TDM ‘tidur’ by not manage foreign debt in proper manner..
if i considered almost RM60billion lose for foreign debt alone…it’s seems BarryWain is half right before considering another factors!!!!
JMD : I think you are talking without looking at the facts right. You are confusing yourself with debts owed by the government and debts owed by the private sector.
Surely you cannot blame Tun Mahathir if the private sector decided to borrow a lot of money from the banks as loans? The economy was booming in the mid 90s.
Before you ramble on further on your ‘assumed’ figures, here have a look at the FACTUAL figures of the government and private sectors debts here. As you can see, it is nowhere near RM372 billion you mentioned.
You can compare that to this too.
Thank you
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JMD,
please do not fooling others with your ‘foreign debt’ reference’s..where is your ‘Domestic Debt’ reference’s?!
Total Public Debt(government debt)=Domestic Debt + Foreign Debt
see how my assumed number is nearly correct…seems our foreign debt is higher than i thought..my early guesstimate will be from RM105b to RM160.6… see how our foreign debt skyrocketing from RM97.85billion to RM170.76billion in 1 year(seems your reference’s is trapping yourself)!!!see foreign debt swell 74.5% in 1997 and somehow in 2000-2002 it only increasing 7% only. Any idea JMD?!?!
see how economy collapse…we have merely RM200billion of Domestic debt in 1997!!
parliament inquiries is credible sources…figure from Parliament inquiries by Late Dato’s Fadzil Nor to Deputy Finance Minister Dato’Wong See Wah (19 Oct 1998)…u can check it yourself..
in 1997-98..we’re similar to Greece and Ireland nowadays..today Debt/GDP ratio for Greece is 106% and Ireland 107% with fx reserves $4.915billion and $3.924billion (source Wikipedia)…Malaysia are worse in 1998..our debt/GDP ratio hit 137.77% (GDP Malaysia is RM270billion in 1998[http://www.google.com/publicdata?ds=wb-wdi&met=ny_gdp_mktp_cd&idim=country:MYS&dl=en&hl=en&q=malaysia+GDP]) with fx reserves only $24.7billion.(source: [page 11] http://www.ecb.int/pub/pdf/scpops/ecbocp43.pdf)
Only 2 element in capital controls country;
a)Total Debt
b)forex reserves
Total debt must be same value as their forex reserves;
Debt=Fx reserves, because their currency TOTALLY depend on their Forex Reserves!!
When Debt is greater than Reserves…that’s result our Ringgit is lose 50% of it’s greenback value in pre-crisis 1997…
In all countries, Domestic Debt is far bigger than Foreign Debt…assumped from your own references, RM170.76+RM170.776= RM341.55billion(Total debt)…
RM341.55b/RM270b=126.5%[1998]…we’re still have bigger Debt/GDP ratio compared Greece and Iceland nowadays..
Althought we have half of Foreign Debt for Domestic Debt(‘super’ impossible)-RM170.76b/2=RM85.38b+RM170.76b=RM256.14b
For Debt/GDP ratio 1998- RM256.14b/RM270b= 94.86%- nearly declared as bankrupt when Debt/GDP ratio hit 100%!!!
JMD: Hujah balas anda?!?!
JMD : Scanzew, do you know how to look at tables? The 1997 figure of RM170.76 billion you mentioned is not the Government’s debt. It was the aggregated debt of government and the private sector. Therefore, you are wrong in your assumption. The federal government’s debt is located in column two of this table (about RM15billion).
Since you were wrong in thinking that the public debt figures of 1998 were top secret, let me show you another two tables;
1) http://www.epu.gov.my/html/themes/epu/images/common/pdf/7.2.1.pdf
2) http://www.epu.gov.my/html/themes/epu/images/common/pdf/7.2.2.pdf
– these will show the Domestic debt for your reference as well as the revenue. Mind you, these figures are from the EPU. You can go to their website and demand a Royal Commission to check whether their figures are correct or not.
Now compare all those figures about government’s debts with the GDP figures that you have. Is it as worse as you had ASSUMED? In fact, from the tables shown, the government made the effort to pay the debts substantially and on time.
Fadzil Noor can pluck the numbers from the sky for all he cared as he was in Parliament.
The economy was spinning out of control at that time because the private sector were borrowing heavily from the banks. This is only natural because in the 90’s prior the crisis, our economy was booming. Our KLSE recorded the highest points back in 1996 (a year before the crisis). And when the currency crisis hit, they could not repay the loans. Liquidity crisis kicked in and the government had to create SPVs to buy back the non performing loans (totalling RM60billion) from the banks and restructured them.
But here you are trying to blame Tun Mahathir solely for what had happened in 1998. In your mind, he is the only one that is guilty.
Anything else we can do for you here?
Have a nice day.
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JMD,
i noticed you’re not really understand my ‘primary school’ math calculation. It all countries, their Domestic Debt is far greater than their foreign debt.
Public debt=Foreign debt + Domestic Debt
as i assumped from YOUR own refferances, i assumped our Public Debt(MINIMUM) in 1998 is foreign debt=domestic debt(althought it’s very imposible)
RM170.757billion+RM170.757b=RM341.514billion(min.)
for debt/GDP ratio= RM341.514b/RM270b*100%=126.35%(1998)
-clear Malaysia surpassed 100% level of Debt/GDP ratio
IT’S SAME CALCULATION FOR GREECE & ICELAND!!
Any idea JMD?!(a)
-seems you’re not understand the fundamental economy. can i know JMD how Singapore survive & not affected at all in 1997 Asian Economic Crisis?!?
any thought JMD?!(b)
yes!! it’s because Forex Reserves!!
Singapore’s economy is resilient to singapore Dollar devaluation because their Forex Reserves is about 70% from their Public Debt!!that’s make they vulnerable from speculators…
Forex Reserve is stockade for economy…it’s common knowledge JMD!!
Forex reserves/Public debt
Singapore (1997)-
Singapore Fx Reserves 1997-$71.4bil[http://www.ecb.int/pub/pdf/scpops/ecbocp43.pdf]
Singapore Public Debt-$106.088bil [http://www.tradingeconomics.com/singapore/central-government-debt-total-current-lcu-wb-data.html]
US$71.4billion/US$106.088billion*100%=67.3%
-praise to Lee Kuan Yew, save Singapore’s revenue in 1997. Malaysia?!?what Mahathir did for avoid speculator?!nil….
Malaysia’s Fx Reserves=US$20bil * 3.8($1)=RM76billion
Estimate Public Debt from previous calculation-RM341.514
Fx Reserves/Public Debt- RM76bil/RM341.154*100%=only 22.27%!!!
-see how our economic collapse in 1997. furthermore, Singapore was clearing their Foreign Debt in before 1995 and build their Fx Reserves progressively…
According to Singapore condition in 1997,from their Fx Reserves/Public Debt Ratio, they’re required about 67.3% for them to susceptible to currency speculators…
Therefore, Malaysia required several amount in Fx Reserves to survive in speculator attacks in 1997.
Public Debt*67.3%=amount required
RM341.154bil*67.3%= RM229.59bil in Fx Reserves!!!
so we short in Fx Reserves in 1997 from speculator attack-
RM229.59bil-RM76bil(Malaysia FX reserves 1997)=RM153.596billion!!
See how i can blame solely on Mahathir for Malaysia crisis 1997. He avoid to save revenue and spend in a good economic condition(other country spend only in bad economic conditions and in Mahathir’s era, Malaysia running fiscal deficit in good economic condition!!).If he save Malaysia’s revenue, cancelling his mega project, his RM100bil scandal(Barry Wain), make building in standard condition, and ban all wastage and inefficient project, maybe we can save RM153bil in Fx Reserves..malaysia do not need to closed economy(capital control) for 13years[1997-current]and do not need 11years for our economy to back on track!!another point, i don’t know why Mahathir really proud with his era when Malaysia facing bankruptcy in 1998…
[Public Debt-Fx Reserves]/GDP*100%=(if exceed 100% considered bankrupt)
see it yourself;
Malaysia ’98-[RM341.757bil-RM76bil]/RM270bil=98.205%
but i stick with RM372bil Public Debt in 1998
RM372bil-RM76bil/RM270bil=109.629%(bankrupt)
see example other-
Singapore 1998- [$118.509bil-$75bil]/$82.4bil=52.8%-Singapore have very good financial control…
Malaysia 2008- RM305.6-RM400($125bil*3.2)/RM710.4bil= -13.28%(seems in 2008 we’re very very far from bankruptcy opposed in 1998!!)…praise for PakLah gave Ringgit their true value opposed only ‘intrinsic’ value in Mahathir’s era..the value that only worth $20bil rather than strong ringgit value for $125bil in 2008!!
Conclusion- Government revenue is very very very limited…there is no room for wastage and inefficiencies..Mahathir can solely blame in this..seems he spend 100% of government revenue with zero savings..compared to regional counterpart, they spend 50% of their revenue and 50% of savings..see how our leader failed to manage ‘duit rakyat’ in proper manner…what a shame
JMD: Hujah balas Tuan hamba wahai jebat yg Bijaksana?!?!
Nice Day!!!
JMD : Dear Scanzew, are you dyslexic?
First, let’s learn the definition. A country’s debt can be public and external. Public debts = the cumulative total of all government borrowings less repayments that are denominated in a country’s home currency.
External debt = total public and private debt owed to nonresidents repayable in foreign currency, goods, or services.
Therefore, the external debt of RM170b in 1998 consist of debts from the private sector AND the government.
The domestic debt of the federal government in 1998 was only RM17.99b
All these figures are from the tables given. They are not assumed figures. They are facts. You on the other hand were going on the assumption that our public debt is equivalent to the whole external debt, or in fact more that was why you derived at your own misguided calculation that somehow, our countries total debt is RM341b at minimum.
Son, please get your definition correct first and look at the tables. It is there for you to look at.
Thirdly, let’s look at the real picture back then. Our External debt is at RM170b. The main bulk of this comes from the debts of the private sector i.e., the debts committed by the likes of conglomerates and the various sector of our industry. Are you saying, Mahathir is at fault here when for example, people like Quek Leng Chan borrowed money from overseas? He has got nothing to do with their business decisions.
That’s why I asked earlier, if you think there was high borrowings in the country (RM170b), why blame Mahathir alone for this? Shame on you.
By the way, to correct you yet again, from the tables provided in the previous comments (not from me, but from MOF and EPU), the debts owed by federal government (domestic and external) in 1998 was only RM33billion.
The debt service ratio of Malaysia stood at only 6.1% at the start of the currency crisis in end 1997.
The forex reserves (based on BNM bulletin) of 1998 stood at USD27b. That is about RM103b.
It is only due to sheer desperation that you would say our debts of RM340b was the total Public Debt of Malaysia. You even got the definition and the calculation wrong. Please look at the table again. There is no such thing as to say ‘oh the domestic debt must be far greater than the external debt’. The tables given had proven it otherwise. Accept it.
Fadzil Noor was wrong when he said our country’s debt was RM372b in 1998.
Fourthly, Singapore suffered negative GDP growth in 1998 too. If you termed that as they ‘survived’, then all other countries in the region that suffered negative growth had indeed ‘survived’ as well. How fundamental you want me to go?
Fifthly, Malaysia is one of the countries with high savings rate (about 40%) during the 90’s with GDP growth registering an average of 8.9% in 1990 – 1995 and 8.6% and 7.7% in 1996 and 1997 respectively. In fact, the quarter right before the currency attack in July 1997, Malaysia registered a whopping 8% growth rate.
We had budget surplusses that helped to lower the public debt (can be seen in the same table under the column ‘debt repayment’).
Scanzew, you have to understand the reasons why the 1998 currency crisis started. It is different from what you thought it was.
But then again, you’re a strong supporter of Pak Lah. Patut lah..
For your further reading, please visit here. It will be a good read, trust me.
Actually similar this discussion like this had been made here and here.
As a conclusion, our country’s debt in 1998 was RM187b (RM170b + RM17b), or External debt + public debt.
BNM forex reserves was RM103b.
GDP was RM274b.
If I am wrong, then the data provided in the tables were wrong. And please don’t call me bijaksana. We are all here to learn.
Thank you.
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JMD,
u read my writing in very fast mode,isn’t?!?you don’t get the point very severely…you don’t even answering my question before!!!
it’s very basics to know DOMESTIC DEBT IS FAR GREATER THAN FOREIGN DEBT!!!is inccured from all banks, GLC’s and states….our domestic debt is source from our KWSP and other entities..our KWSP fund is exceed RM300billion nowadays….so it’s impossible our foreign debt is higher…calculation is totally SIMILAR for Greece and Iceland..
so i can concluded at MINIMUM our total Public Debt is RM342billion(although you make shame statement that like Fadzil Nor is The Deputy Finance Minister!!of course this question is answered by Dato’ Wong See Wah!!you can check Parliament Minutes in Parliament Archive at 19oct1998!! please stop answering without deeply understand my writing,that’s make you look like an idiot when answering that!!you’ve to keep your high status among your visitors!)
1997 speculator attack is totally by Mahathir ignorance..he has zero savings in 1997 with Fx Reserves very low at RM73billion(you pluck the figure for 1998,but i said in 2007!!)… although Fx Reserves required RM230billion to immune from Ringgit devaluation 1997…you can still “menegak benang basah’..
but for me let market talk, lets market decide:
1997 speculator attack-Ringgit severe devalued from RM2.5 to RM4.555=US$1
(http://www.fas.org/man/crs/crs-asia2.htm)
2009 subprime crisis- Ringgit remain in-value within RM3.2-RM3.3
i just let market talk, because he can’t lie!!!!Human can…
like Barry Wain said before, he WASTED RM100billion….he wasted from annually Petronas fund with his mega-project,RM100billion scandal,other project with not give impact economy(project with zero multiplying effect on economy)….seems market punished Mahathir on his ignorance….Mahathir on the other hand, keeps blaming Jews on his ‘sin’ like he did in 80’s….blaming Tun Hussein Onn and Tunku Abdul Rahman!!!
about Singapore,survive although they’ve only have negative growth only several months, and back on track with trajectory growth!!i even don’t include Taiwan stories in 1997, and further with China stories………….
clear Fx Reserves saves them!!!
Malaysia’s back on track?!?!10-13 years!!
for me….LET’S MARKET DECIDE!!!because he never lie
If me as speculator in 1997, i decide to attack Ringgit because;
a)very high Public debt vs Forex Reserves ratio
b)malaysia experienced overheating economy
c)Malaysia facing bubbles in their assets markets and property market
d) dictator leadership
e) Ringgit is very overvalued…Ringgit do not based on their fundamental..just in intrinsic value
f) ballooning Foreign Debt-Goverment failed to control- different to Singapore they cleared foreign debt before 1995 with domestic fund.
g)gomen project have many failed project & very low multiplying effect-such as Putrajaya,MSC…Malaysia spend RM1 with RM0-RM0.05 returns!!
h)Malaysia is floating their Ringgit, with NO restrictions for foreigner to lend in Ringgit.
i) too many wastage and inefficiencies in Mahathir’s spending(like Barry Wain said before)
-then i borrowing Ringgit in;-
a) 28February 1997 (RM2.48=US$1) for $30billion[RM 74.4billion]
And payback the loan in US Dollar $30billion
b) 9January 1998-(RM4.596=US$1) [RM137.88billion]
-that’s make be a billionaire with instant!
RM137.88b-RM74.4billion
=RM63.48billion
JMD: Hujah Balas anda wahai Jebat yg berintelektual tinggi……
-scanzew berhujah mencari kebenaran-
JMD : Wah marah nampak. Bulan puasa ni kena sabar sikit. Dari tadi asyik terpekik sambil menggunakan kata seruan yang banyak. Mana jumlahnya? Sila beri kita link.
Kalau tidak ada, kita guna sahaja figures yang saya beri dalam komentar anda sebelum ini ok?
My dear Scanzew, have you read the links I provided? I doubt it. Because all the issues you raised here are answered in that research paper. Here is the link again. Please read it.
Scanzew, awak mungkin keliru dengan perkataan hutang domestik dengan hutang kerajaan. You said our Public Debt is RM342b? Salah tu.
Public debt adalah hutang kerajaan di dalam dan di luar negara.
Kita sudah tahu bahawa kerajaan berhutang sebanyak RM33 billion dalam tahun 1998. Betul? Yang lain adalah hutang pihak swasta kepada badan badan luar negara. Awak pulak berfikir bahawa Public kita adalah RM170b. Saya sudah ulangi banyak kali, public adalah hutang kerajaan. Sebab itu ianya dinamakan ‘Public’.
Jumlah keseluruhan hutang kerajaan untuk dalam dan luar negara dan hutang private luar negara adalah RM187B.
Like I said earlier, you need to know your definition. Domestic debt = debt owed to creditors resident in the same country as the debtor.
Since these debtors are not government (because government debts fall into public debt), why blame Mahathir for this debt? Be realistic ok.
Again, please get me the figure of this domestic debt of 1998. And would you please so kind to exclude the public debt and the external debt figures.
After half a dozen comments, how can you still fail to provide us with the figures for this domestic debt?
Please be informed that domestic debt, no matter how high they are is not the cause for any economic crisis. It is the non performing loans that causes the liquidity slump.
Matawang kita menjunam jatuh kerana di serang oleh spekulator matawang. Singapura tidak di serang kerana ‘Singapore had not institutionalised its currency given the restrictions on the use of the Singaporean dollar and borrowing outside Singapore’.
Quote tersebut saya ambil dari link yang saya suruh awak baca di atas. Please read the link. It will educate you and answer the comments you had written.
Lastly, currency speculation and making money just to impoverish a nation is a criminal act. You can’t trade money to make profit out of it. That’s insane. Well.. that’s my opinion anyway. Other people might differ.
Addition : Singapore registered negative growth in 1998 and in early 2000s. If humans lie, then Barry Wain could be lying as well. Sub prime crisis is not a currency crisis. Different situation altogether. Back in the mid 80s during the economic crisis, our ringgit did not depreciate much either.
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that’s why I know the total Public Debt in 1998 is remains top secret…Idris Jala is good calculating Public Debt when he know RM362.6billion although still hiding total Public Debt before 2004…
total Public Debt;-
1998-RM372billion
2008-RM305.6billion
2009-RM362billion(after najib borrow for RM60billion for second stimulus package)
if think like you said before, our debt is RM187billion with RM103billion Forex Reserves(LOL very funny)-
RM103billion/RM187billion*100%=55.08%
seems very near with Singapore Forex reserves/Public Debt ratio?!?!
*can you answer me why dollar lose their value only-
26.14%
[from S$1.40 to S$1.766 for US$1)
meanwhile;-
Malaysia lose Ringgit value for-
211.6%
[from RM2.48 to RM4.596 for US$1)?!?!?!?!
very funny!!!!!
i still use my healthy brain to analyze all your IMPOSSIBLE data….
you can futher your data to Majalah Ujang in Lawak Antarabangsa Column…
LOL
JMD : Aiyoh, still using Fadzil Noor’s figures? Why ah? And still got it wrong on the Public Debt definition? Have you read the research paper I gave you previously?
What’s wrong with the RM103b forex reserve? I got it from the research paper itself. Your calculation of 55.08% is roughly correct in terms of forex ratio to the country’s debt (public and external). The research paper even said the fundamentals are strong in 1997 before the speculators began to dump the ringgit.
Why would the data be impossible? I got it straight from the relevant agencies. The only thing that is impossible is your prejudice and all the ridiculous assertions. RM187b and RM103b are real figures. It is not a fantasy (unlike your RM372b).
And you ask why SGD lost only 26%? Well, because it was not attacked by the speculators that aggressively. Baht was attacked first, then the Korean Won, then the Rupiah, and then the ringgit. Read the paper first ya. Your next comment should be an enlightened one.
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sorry miscalculation(crazy iphone calculator!!)
Malaysia lose Ringgit value for-
85.322%
(from RM2.48 to RM4.596 for US$!)
Singapore Dollar-lose value 26.14%
malaysia Ringgit-lose value 85.322%
althought their Forex Reserves/Public Debt ratio is very near-
Singapore-67.3%
Malaysia-55.08%!!!
just very funny data feed!!!
but still market never lie……………..
JMD : Market can get manipulated all the time. Market can give false information. Please learn more about the currency crisis in 1998 from veritable and credible sources and please get more than one side of the story. Then you can make a more informed view. Thank you.
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Dear scanzew,
in 1998, the whole region was flush with USD and FDI. Our interest bank rates were high, so many borrowed in USD, thinking the govenrment will defend it against any attack on exchange rates.
Borrowing in USD either through private entity or govenrment(or any foreign currency) makes the economy open to speculative attacks, as at the optimum time, they can short the local currency en-masse, as Ringgit/Baht and others, except chinese Remnimbi, were traded internationally.
That was why, during the currency crisis, our ringgit received in excess of 20% interest in Singapore banks, as it was used by singapore currency traders to further short our currency. It hapened to the baht and rupiah as well, as these were considered open trading nation. Every tom dick and harry from thailand/indonesia and Malaysia were queing up with cash in their begs (largest ringgit denomination at that time was RM1000) and headed for Singapore.
Singapore currecny was not affected so much because their country was experiencing cash influx from Malaysia/Thailand and Indonesia.
Indonesia and Thailand surrendered to IMF, but one guy from Bank Negara Malaysia, probably high from too much drink and drugs, came up with a brilliant idea to stop the outflow of ringgit, and bring it back into the country again, by making it an illegal denomination outside of the country, and making the large notes worthless. They call this currency control. It worked, but the affect of the currency crisis had on the region still persist till today.
The country that profited from the currency crisis was singapore, as it was the banking/hedge fund/forex centre. Today, it has further strengthened that idea, by introducing banking secrecy laws. almost similar to that in switzerland. So now, singapore attracts money from illegal money launderers and tax evaders from all of east asia/india.
because of this, singapore does not need natural resources. Payment for timber/palm oil/coal and other resources from Malaysia/Indonesia and Thailand are channeled into singapore bank accounts. Only the amount required to pay wages and operating expenses are remitted back to the recipient country.
Temasek, the state owned sovereign wealth fund, have a joint venture hotel with Myanmar drug lords. Drug money from Mynanmar drug lords and Junta are stashed in singapore, as well as money from failed indonesia banks, worth billions in USD. And this people are safe in singapore as there are no extradition agreement between singapore and any of its neighbours.
having a two huge casino makes it even easier to launder illegaly obtained funds. Who is going to question your winnings? Previoulsy, they had to board star cruise ship to do this. Now it is very convenient.
That is why, bankers and forex traders are highly paid in singapore( and worldwide). Banks make huge profit from trading in currency/commodities/derrivatives and other speculative products. The last spike in the price of oil are due to these speculation. We have to be on our toes to see where they will attack next. But for sure, commodities, such as steel, cement, food and energy, will be on their microscope. As for Indonesia, they are the biggest losers for having singapore as their neighbour.
My personal opinion.
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OK JMD,
i can see we arguing on Public Debt in 1998..for me, RM372billion is not Dato’ Fadzil Noor number, but Dato’ Wong See Wah’s, Deputy Finance Minister in 1998 with TDM as Malaysia’s Finance Minister..you can check yourself in Parliament Minutes at Parliament Archive in 19 october 1998…
Malaysia’s Forex Reserves in;-
a)1997-US$20.0
b)1998-US$24.7 [page 11]
( http://www.ecb.int/pub/pdf/scpops/ecbocp43.pdf )
i’m opposed with your RM187billion…when RM170billion foreign debt inccured all debt from GLC’s,bank and other entities, Domestic Debt also have to inccured all this bank and entities lend with local fund?!?! i my logic, it’s always a lot bigger
(sorry i have write in simpler form because you don’t get my point)
JMD- any response?!
JMD : My response? I could not find the hansard. I looked here and here. The date you stated, 19 October 1998, has no hansard at all. Probably the parliament was not in session at that time. Please look at the dates here. How now? Were you hallucinating? Please give us the correct date and links.
Since you already wrote above that domestic debt are debts by banks, and other entities, we can safely say that these were not government’s debt. This is the contention. If indeed these domestic debts were high, why would you blame Mahathir for this? He had prudently managed the federal government’s debt (as shown from the tables I provided earlier.
Mahathir was not in charge of all the private sector’s financial management. Thus, he is not solely to blame for the high debts of these companies and banks. And true enough, in order to save these banks from bankruptcy, Danamodal and Danaharta were created to inject liquidity into the market. The NPLs were killing the banks. Yet again, Federal Government had to rescue those banks which have more than 200,000 workers combined. How can the government did that? Because they have extra funds. More than Rm40b was used to save these banks so that people like you and me can continue living the normal life back in 1998. And yet you said the government has no savings at all? Wake up Scanzew.
Can you comprehend what I had written?
I am glad you gave us that link. It shows that low levels of bank reserves in the 90s were international phenomenon. from the table you gave us, all of those countries, from Japan to Australia had low reserves. The reserves picked up after the currency crisis and as stated in the article, the low reserves were due to the extensive liberalisation of the market back in the 90’s. After the currency crisis, all of those countries, began to accumulate the reserves in order to mitigate any future attacks on their currency. Please read the paper you provided, especially from page 9 to 13.
By the way, have you read the research paper I gave you? Thank you.
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Public Bank or Government bank definition here;-
[ http://en.wikipedia.org/wiki/Government_debt ]
from this wikipedia said;
“Government debt (also known as public debt, national debt) is money (or credit) owed by any level of government; either central government, federal government, municipal government or local government”.[if Public Debt mean by that, your Domestic fund must be Government debt and other entities that borrows from domestic lenders]
wikipedia also said;
“As the government draws its income from much of the population, government debt is an indirect debt of the taxpayers. Government debt can be categorized as internal debt, owed to lenders within the country, and external debt, owed to foreign lenders.” [so Public Debt must be Domestic Debt+Foreign Debt]
clearly RM340billion Public debt is very minimum amount JMD
JMD: any futher responses?!?!
JMD : There you go, public debt are government’s debt; NOT the corporate or the private sector’s debt. Therefore, the government’s debt back in 1998 was only RM33B. The RM187B consist of government’s debt AND the banks (private sector).
In other words, the domestic debts of banks and other corporate entities are not included in Public (government) debts. It will not appear in the balance sheet of the Federal Government.
It will only appear in the balance sheet of those banks and other corporate entities.
Please ask your economic lecturer again.
Any more commentaries Scanzew? I am even beginning to doubt if you could even understand the meaning of public and private sector.
On and on you repeated the RM340B figure. That was your estimation which is based on your delusions and wrong assumptions.
You need to move on Scanzew. Stop pinning Mahathir alon on the high debts because frankly, from the research paper I provided and what you provided, clearly he managed to rescue the nation from the mismanagement of the banking industry. Thank you.
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Another ‘menegak benang basah’… I know you know the real situation of public debt RM300 billion but still in denial…..
See u still not understand although in very simple form..you just add RM170billion with domestic government debtRM17bil..but the reality you do not adding debt from local entities lending from domestic lenders..
The important task of pm in 1998 is savings…mahathir has zero savings…but PakLah has to 100% savings and zero spending the annually petronas find….
You’re still confusion on wikipedia articles…
JMD: read it 3 times u can get the true picture
JMD : Alahai Scanzew. Give us the facts and figures from credible source please rather than shooting from the hip.
Okay how to get this through your thick skull. You blame Mahathir for the high debts. I said that is not fair because as far as Mahathir is concerned the debts that he is responsible for as the head of the federal government is only RM33B. This is the amount the federal government is owing domestically and externally. The rest of the debts are the responsibilities of the the business owners (the banks, the SMEs, manufacturing and property industry etc). Get it?
And you are not being smart by saying there was ZERO savings in 1998. USD24.7B of federal reserves is not ZERO my dear.
Furthermore, in the research paper that you linked, it shows that even bigger economies such as Japan, China, Russia and India had lower federal reserves percentage over its GDP compared to Malaysia back in 1998. As it said in the same article, the low federal reserves was the international norm at that time because of the liberalised market.
From my exchanges with another commentator (the links I provided in the previous comment), Pak Lah did a whole lot of mess, he even increased the federal government’s debts many times over. And Pak Lah made zero spending during his time as PM? Come on Scanzew. I know you are not THAT clueless.
It seems now, you are the one who wanted to ‘menegakkan benang basah’. We shall conclude our exchanges with a quote from a Malay peribahasa – Cakap siang pandang-pandang, cakap malam dengar-dengar.
Terima kasih.
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The main problems on Malaysia’s economy is totally blame on Mahathir’s debt in his era..debt incurred 1998 worth RM372bilion( figure from Parliament inquiries by Late Dato’s Fadzil Nor to Deputy Finance Minister Dato’ Lee See Wah19Oct1998). Since malaysian GDP worth only RM270bilion in 1998(US$72bil),for debt/GDP ratio,calculation can be made by dividing RM372b/RM270b..i can concluded we have 137.77% for our economy at 1998-it’s seems we’re worse than Greece and Iceland with ratio 106% and 107% respectively..
WOW!!
I can assumped this figure even before BarryWain’s book arrive here..
The total debt by gomen in 1998 until 2010 can conclude here;
1998-RM372b(fact)
to
2003(mahathir retire)-RM400b(assumption)
to
2008(Paklah era)-RM305b(fact)[seems PakLah paying Mahathir’s debt]
to
2009(after second stimilus package RM60b)-RM362b(fact)
conclusion-The problem is Mahathir’s mentality considered KWSP and other entity as FUND not as DEBT..so serious problem lies in our economy within decade…
but most interesting part, 1998’s public debt remain Top Secret!!!
JMD : It is not a secret. You are just lazy to find it. Have a look at my reply to your earlier comment here.
It is your mentality that is wrong. Relying on assumed, guesstimates and mistaken conclusions? What is wrong with you? Thank you and have a good day.
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My Conclusions…
a)Fundamental is crucial stockade in economic ‘war’
-seems South Korea,Malaysia,Thailand and Indonesia have learnt their lesson after 1997 Asian Economic…at least they learn from Taiwan and Singapore experiences….
like u said “After the currency crisis, all of those countries, began to accumulate the reserves in order to mitigate any future attacks on their currency”….therefore. we can see how important Malaysia to have LARGE amount of Fx Reserves in 1997…futhermore, accumulating reserves is totally in PM’s hand….
see how one of our Ringgit speculator’s in 1997….Arberdeen Asset Managemnt succeed in shorting Ringgit with billions profit for several reasons:
a)Malaysia’s experience severe current account deficit (meanwhile Indonesia have $900million current account surplus in 1997)
b)weak fundamental(low Fx Reserves)
c)no restrictions for foreigner lend in Ringgit
the best part by Aberdeen Asset Management managing director Gerald Ambrose is;
“IT IS time for the ringgit to be traded offshore once more as Malaysia’s fundamentals are a lot HEALTHIER than they were 10 years ago”
(http://www.btimes.com.my/Current_News/BTIMES/articles/duitrm/Article/index_html)
-all can see the very important in building fundamental in facing economic difficulties…so Fx Reserves is very important…
i just imagine if Mahathir;-
a)cancelling all his wasted mega project & mismanagement
b)concentrating standard project to generate economy
c)shut all the ‘glorious’ element on his economic project
d)spending on large multipying efect project
e)stop bailing-out all his failed project
i think Malaysia is not required to imposed capital control for 13years(1997-2010)..and running well in 1997, 2001, and 2009’s economic crisis..
b)Best PM ever
-for me, the best PM that’s malaysian have is just Tun Razak….with his amazing 6years administration surpassed 22years of ruling…with all his project still running strong until today…Felda, Felcra,Risda, not excluded Petronas and etc….meanwhile Perwaja, Renong is in bad end story….and proton will follow….
c) Suharto=Mahathir
-Malaysia and Indonesia is totally same story of falling economy…both of because soaring of foreign debt in 1997. both Malaysia & Indonesia have similar strength:
i)strong banking sector
ii)Low inflation
iii)abundant of natural resources(oil,palm oil, etc)
But Malaysia facing severe deficit current account with Indonesia enjoy large current account surpluses…
Mahathir and Suharto also is similar;
a)Long ruling (mahathir-22years, Suharto-31years)
b)Super rich family
c)cronism and nepotism scandals
in Indonesia, Suharto responsible for 1997’s economic crisis, resign from president post, facing a lot of judicial precedent and have a very bad life end…
meanwhile in malaysia, mahathir do not take responsibility in 1997, and opposed, been praise him like godfather and great saviour!!!
weird……………………
-scanzew-
Salam Ramadan
JMD : Your fundamental mistake is the fact that you think speculating and trading money is ethical. You should have criticise Aberdeen Asset Management for being callous in their remarks about currency trading. There is no value added benefits in currency trading. The ones that benefit the most are just the currency traders. Oh and please show me where you get the fact that Indonesia had USD900 million account surplus. And which reference did you find when you say Malaysia had SEVERE account deficit in 1997? How much was this severity? 20%? 30%? 5%?
Mind you, Indonesia rupiah suffered the most attack when its rupiah fell from Rp2500 per USD to nearly Rp14,000 at one time during the crisis!
And lo and behold! People often wanted to have a free, liberalised and open market. But it was the free market that attacked the currency! Hence, market needs to be regulated. Everyone in the world is doing that. Just ask the US what kind of regulatory mechanism they had put in place after the subprime crisis bankrupted ther financial institutions. Nearly USD700 billion is used to bailed them out.
Of course, nobody had predicted these currency attacks. It was motivated by greed and the desire to make a quick profit without being cognisant of the fate and wellbeing of the country that had their currency devalued. It has nothing to do with fundamentals. Just read the references you and I had provided.
You are flailing blindly with your arguments Scanzew.
It is weird for you because your are quite ignorant, misinformed and had been brainwashed by Pak Lah’s supporters.
By the way, ask any man on the streets in Jakarta. Ask them life was better under which president. 90% of them will say, under Soeharto.
Here’s a reality check for you – All Prime Ministers in Malaysia (and even in Singapore, Thailand and presidents in Indonesia,) have super rich family as well as nepotism and cronyism scandals. It comes with the job. Even Tun Razak was relatively super wealthy.
It is not the measure of how wealthy you are that makes you a bad prime minister. It is how successful the country is in terms of the general happiness of the population that makes you a great Prime Minister. I didn’t hear you make a squeak during Tun Razak, Tun Hussein and Tun Mahathir’s reign. Having a good life back then aye?
Salam Ramadhan to you too and have a joyous Hari Raya Adilifitri. Maaf Zahir Batin.
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Agreed that subidies sould be demantled and revamped. The key question is how rationatization to be done in the manner that help to simulate growth and equity distribution of weath. Subsidies for health, education and other social infrastructure would be continued but transfer payments in that enriching selected few sould be totally avoided.
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JMD
I think it is high time we Malays/Bumiputra get the hold of this goverment and beef up our goverment machinaries to make sure we have the full control. Talking is a mere waste of time. A lot of people make noise when some Malays make some money. Nothing mentioned when pendatang make billions. WTF…
We must inspire nationalistic feeling in our people, just like the early days.
I remember you’re not in favour of us Malays/Bumiputra have too much power. I say let us have “too much power” and use it accordingly.
mohamed
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@ mohamed
during the early days, the nationalistic Malay sultanante of Malacca had to asked for protection from the chinese emperor to prevent the King if Siam from anhilating his empire.
Zimbabwe and Myanmar are two very good example of success of this policy of majority tribe taking control of everyhting within the country. In Zimbabwe, they (Shona/ndebele) probably have 100& control of literally nothing. In Myanmar, they have marginalised the Kachin, shans, karens and many other groups. So now they too have 100% control of almost nothing.
If malays were to do the same thing, the result will be too obvious and we do not have to speculate the outcome.
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Sputjam,
I think u’re overly excited here. The chinese dynasty on malacca era is predominantly in muslim influence. Well you can read it in library then.
having the same std here, brunei control 100% and they have everything. The arabs have 100% and they have the most wonder land ever built by mankind. The china, japan, taiwan and hongkong control 100% and they’ve a copy and paste industry. Singapore control 100% and all they do now is to invest in another countries and try to add value to its economy by promoting its gaming industries. Well we could wait to see if they could survive the future.
You said abt amirsham and idris jala have the credibility? Well Maybank investment under amirsham at Indonesia is a total failure and idris jala MAS’s profit is after the sales of asset not the reason of high turnover of the company.
What we need now is to cooperate between races and come out with viable solution for current m’sia economic pandemonium. We could do that or we could sit back and argue among ourselves of what is right and wrong. Well choices is in our hand and everyone have equal right on it.
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Dear Sham,
Amirsham was not the CEO when the BII purchase was made. It was the interim CEO who made the deal. Then Wahid came in after that.
But based on historic facts, Daim zainuddin partly owned BII before it was sold to temasek. And Wahid is Daim’s so called “man”.
So Daim could pocket some hefty commission for the deal from temasek, no? And nobody can fault the present CEO nor the previous ones.
A perfect crime.
Idris jala was a petroleum man, not logistics expert. If you look at MAS’s operation, it is almost entirely based in KL and should be renamed KL airlines. If not for air asia, there would be no hub in Penang and KK. It is unfortunate the hub in JB did not work out due to non-connectivity with singapore via rail otherwise, it could be a major low cost airport for the south. To make matters worse, firefly offers direct flight to changi from many peninsular airports, but not to KLIA. Those wishing to fly international from Kuantan, Ipoh, Melaka etc would rather fly via Changi than to subang and then take a taxi to KLIA for connection. What morons. With idiots like these in our GLC management, we don’t really need enemies.
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Dear JMD,
I have created a blog specific for economics. Would appreciate your support in this endeavour. Even though we may disagree completely on some political stuff, I believe we both want to move Malaysia forward.
Cheers
Wenger J Khairy
http://penumpang.blogspot.com
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ni semua rostchild punye conspiracy
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