Last week I was on the hot seat of a live call-in radio programme organised by the ETP. On air now for over a year, the show calls for Pemandu and government officials to bravely front a hotbed of issues, fielding no-holds barred questions from some smart people.
I had the privilege to anchor the final ‘talkback’ session for the year and faced a particularly contentious topic. Even as the country charts all the right numbers on GDP, GNI and investment, some Malaysians do not believe change is real.
So here’s the sock-in-the-gut question posed to listeners on the country’s economic direction – “the country is getting wealthier but are you feeling it?”
I have selected comments and questions from callers I believe will resonate with many:
Christopher: I don’t feel the country’s transformation. As a businessman it’s hard for me to see its results.
When we started in 2010, we chose to prioritise people’s main pain-points, and then set out to create change programmes around those areas.
There are segments of Malaysians who suffer from living without basic amenities. Under the Rural Development NKRA, a total of 5.1 million people today have benefited from access to treated water, electricity and roads linking villages and towns.
Obviously not all of Malaysia’s entire population of 29 million will experience these changes, but I assure you rural families getting electricity in their homes for the first time are feeling the transformation.
There are 468,000 commuters during peak hours in the morning in Greater Kuala Lumpur who use public transportation. Every day they feel the impact of 38 new KTM trains, 35 sets of four car LRT trains, 200 new buses for RapidKL and a revamped Puduraya making their daily commute less stressful.
Once the MRT and other train and bus line extensions are in place, we hope more city-dwellers will abandon their cars and take public transportation.
A total of 1.6 million new jobs have been created under the NKEA sectors since 2010. These individuals are not linking their new positions and higher salaries to the momentum created by the transformation programmes. They are enjoying the results and building a better future for their families as it should be.
Syed: How will the government tackle challenges of the weakening ringgit, drop in oil prices and the possibility of reduced revenue?
Using Budget 2015 figures, let’s do some maths. RM27 billion (oil and gas dividend) minus RM11 billion (RON95 and diesel subsidies) would result in a net surplus of RM16 billion. Under a lower oil price scenario, assuming dividend drops, say to RM20 billion (amount paid by Petronas previously when oil price was lower), the government still registers a net surplus of RM20 billion because we no longer have to foot fuel subsidy bills.
Tax revenue from oil and gas can obviously be affected by lower oil price but since our ringgit has devalued against the dollar, we would get more ringgit after sales of our exported oil and gas.
So, my point is that it is not just doom and gloom. There may be a silver lining for the other sectors in the economy.
There is also a general consensus that the world economy would do better under a lower oil price scenario. As a relatively robust trading nation, Malaysia will surely benefit from an improved global economy.
Raymond: Household debt as percentage of GDP is increasing yearly, and one of the highest in Asia. How is it possible for us to achieve high-income nation with high debt levels?
I met with the CEO of Fitch Rating in New York recently. He questioned if the government is concerned with household debt at 87% of GDP.
I was clear in that conversation. We cannot examine household debt in isolation but should also look at household assets. What is interesting is that the Malaysian household asset is at 332% of GDP.
It means if you borrow and have the assets such as properties and savings to back you then that borrowing in itself is considered healthy.
But I agree we must be concerned about its rising percentage and work to bring it down. People should live within their means. There are measures taken by Central Bank to soften borrowings especially in housing.
Victor: Our economy may be progressing but the foreign exchange rate does not lie. This is why our premium products are being exported to richer countries. Should we be worried?
I am not worried. Malaysian producers must find a way to monetise their premium goods as this will lead to better incomes. I strongly encourage it.
It is good for local companies to tap into opportunities in international markets as competition makes you resilient. You do not end up being limited to jostling in a small pool for a slice of the same pie.
There are advantages to a weakening currency. It makes Malaysian exports competitive and attracts more foreign investments as cost of doing business becomes cheaper. Tourists’ arrivals should also see a rise.
I left the studio rejuvenated from that hour-long conversation with various callers. Their thoughtful concerns for the country’s future tells me we must continue the good fight and stay the course towards a prosperous nation that is sustainable and inclusive.
Note: The questions above have been paraphrased for clarity and brevity. The full version of the show is available at http://idrisjala.my/etp-talkback-thursday-11-dec-2014/