From Bankruptcy to Spending Spree?
Life is full of extremes. So are statements from a certain government think-tank. On 27th May 2010, Idris Jala gave a statement as reported in Malaysiakini HERE as to how Malaysia risks becoming the next Greece unless voters swallow subsidy cuts that will see the price of petrol, food, electricity and other staples rise. He also warned us as to how the nation could be bankrupt by 2019.
In an uncanny pendulum swing to the other extreme, Malaysiakini reported HERE today that Pemandu unveiled ambitious plans to boost its economy by mobilising hundreds of billions of dollars of private investment, although questions remained over whether the money would materialise.
Will the money fall from heaven??? I also want to know how so much money can materialize. You can check THIS SITE for the latest information from Bank Negara Malaysia on the latest economic and financial data for our country and perhaps readers who are economics/financial/accounting experts can makes sense of what they are saying.
The 191 possible projects to propel Malaysia into developed nation status within a decade range from a new mass transit system to relieve congestion in the capital, Kuala Lumpur, to building a huge oil storage facility next to neighbouring Singapore to form a regional oil products trading hub.
A government think tank said it had identified investments worth RM1.376 trillion (US$444 billion) over 10 years, of which 60 percent would come from the private sector, 32 percent from government-linked companies and 8 percent from government.
The investment aims to double per capita income and push Malaysia into the ranks of “developed” nations by 2020, rebalancing Asia’s third most export-driven economy towards domestic demand and the service sector.
“The plan does not provide a clear sense of where the money is coming from. A lot of these numbers are pie in the sky,” said Bridget Welsh, a Malaysia specialist at Singapore Management University.
Fintan Ng of The Star reported HERE that the Economic Transformation Programme (ETP), through the identified projects and initiatives, will be key in transforming the country into a high-income nation with a gross national income (GNI) per capita of above RM48,000 by 2020 from RM23,700 in the present.
GNI in 2020 would rise to just over RM1.7 trillion from RM660bil in 2009. Up to 31% of the GNI growth would be delivered by the EPPs plus a further 10% from multiplier effects.
Business opportunities could deliver an additional 33% while the remaining 26% of incremental growth is expected from other non National Key Economic Areas (NKEA).
The four largest NKEAs (oil, gas and energy, financial services, palm oil and wholesale and retail) are projected to generate 60% of the incremental GNI growth from the 11 NKEA sectors.
The report said that the incremental GNI growth from the initiatives in greater Kuala Lumpur would be calculated separately to avoid double-counting, as some of the income from the 11 NKEA sectors would be generated in the greater Kuala Lumpur area.
According to Datuk Seri Idris Jala, Minister in the Prime Minister’s Department and CEO of Pemandu, this level of GNI per capita would correspond to that of a high-income economy as currently defined by the World Bank.
But then, he did not compare the real value of wages!!! If wages go up and cost of living goes up MORE than increase in wages, we would be worse off!! As it is, our bowls of noodles are getting smaller and in many establishments, we are paying more and yet getting LESS. Our pockets are getting AIRY and wallets very light indeed!!
More wonderful mega $$$ project proposals include:
