Do you still remember that most of the market analysts(including our government) in Malaysia claimed that “Malaysia is a safe haven” when credit crunch crisis started deteriorating in U.S.? Yea, they may be right, this is simply because none of our banks or financial institutions involved directly in U.S. Supreme loan Crisis.
In fact, U.S. is now being threatened by economy recession as well as high inflation(Note: U.S. might already in a recession). As a result, their demands for goods & services will definitely decline. In such situation, Malaysia can never escape from it’s impact. Because this will somehow affects the export of Malaysia(Note: US is one of the largest export markets for Malaysia) and hence impacts our economy in general.
However, some of those economic and political “experts” in Malaysia always clung to the notion that “Our local and regional demands is still strong enough to neutralize the impact of recession in U.S.”. Anyway, such “fairy tale” seems had already come to an end. This is simply because the whole world including Malaysia are now facing food crisis and fuel price hikes. As a consequence, the people including Malaysian had no choice but to face the high inflation in their daily life.
Apart from rising in prices of the imported rice(i.e. the main food for Asian) by around 100%, the latest news was the Government of Malaysia had announced an increase in petrol price by 41% and diesel price by 63% in which had started immediately on 5th June 2008. This is the largest increment in fuel prices in the history of Malaysia. The effects had already started to kick in. E.g. rising in the transportation fees, foods prices & etc. As a result, the cost of living must go up and the purchasing power of consumers must go down.
Once the purchasing power of consumers had declined, how far the statement sounds “Our local and regional demands is still strong enough to neutralize the impact of recession in U.S.” will still be true? Obviously, such statement is really ridiculous in the current context. With shrinking wallet, most of the people will more likely to keep just those necessities and sacrifice those unnecessary expenses(E.g. entertainments, trips, investments, shoppings & etc).
As a consequence, the sales made by the businessmen who owned factories, shops and etc will also decreased at the end. While the operational costs are rising but the sales and profits are dropping, the businessmen may start thinking of cutting costs by reducing the labours and so on. Some might even face bankruptcy. E.g. the airline companies. If such situation happened, the soaring unemployment will further deteriorates the economy. Therefore, if we don’t handle such situation carefully, then a disastrous recession will be awaiting us.
In fact, such type of inflation isn’t mainly caused by the consumers in the markets. But it had been caused by the speculators(i.e. those with plenty of fund) who trying to make profits from their speculations in the crude oil and other commodities like gold & etc. As a result, such speculators making huge money from it but billions of others suffering from the fuel and food price hikes. Of course, those have been exploiting the resources by simply declaring wars on others should be blamed too.
June 9th, 2008 at 6:00 pm
1) How many cars are over 2000cc?? Few or may be very few only. Meaning that many (rich or poor), will still benefit from the cash rebate irrespective of their gas using habit. This is not what we want. We want the poor to receive more.
2) Let say I am a businessman who runs a car rental service and I own 50 cars for rental. I rent the car to customers and customers fill and pay for the petrol themselves, so essentially I will receive $31,250.00 ($625.00 x 50) annual cash rebate for doing nothing, extra profit from the stupid policy maker and government.
3) Let say I am a filthy rich man and I own 5 luxury cars but all are below 2000cc, or may be I am just a rich man who likes to own nice cars, then I will be entitled $3,125.00 ($625.00 x 5) annual cash rebate despite being filthy rich with overspending lifestyle while my fellow poor neighbor who owns a Honda 70cc kap-cai only receive $150 annual cash rebate despite being poor and living a thrifty lifestyle!!! VERY STUPID GOVERNMENT!!!
4) Let say I am a poor man who don’t own any cars/motorbike and I rely on public transportation to go to/from work, then I will not get anything sumore I am likely to pay more for transportation fares due to the diesel hike, despite me being very poor not even capable of owning a motorbike, being nice for using public transportation thus relieving road congestion, being environmental friendly by not burning fossil fuels, but in return I get punished!!!! DAMN STUPID GOVERNMENT!!!!!
5) And lastly can the uncle-uncle and auntie-auntie at the POS offices handle the sudden surge in demand for counter services as a result of the cash rebate?? Judging from the services and experiences I had with those uncles and aunties, I don’t think so!
Anyway, I am not all critics and no help. My suggestion is why not implement the rebate in the form of income tax relief/rebate base on income level?”