My Say

The central bank has decided to increase the Overnight Policy Rate (OPR) by another 25 basis points to 3.5%. Read the statement here. Many banks have come out to crow about their increase in deposit rates of ‘up to 60 basis points’. E.g. Standard Chartered. However, as usual, we should read the ’small prints’. In this case, the increase in fixed deposit rates is only for the longer tenure (i.e. they want to lock you in for as long as possible at the prevailing rates). There is hardly any increase in savings rate or rates for short term fixed deposits (up to 3 months). On the other hand, (almost) all the banks have increased their base lending rate by the full 25 basis points.

It doesn’t take a genius or rocket scientist to work out that, by borrowing money at the 1 month fixed deposit rate of 3.1%, and placing it with the central bank at 3.5%, the banks can net 0.4% without doing anything at all. This is the ‘minimum’ they can earn. Don’t forget that the savings rates are pathetic - less than 0.5%. Is it a wonder that most banks are making record profits? What do they do with these profits? They lend to some dodgy companies and they get wiped out overnight.

I also question the central bank’s decision to raise the OPR, which seems to be mainly to strengthen the Ringgit. This was hinted by the PM and the ex-PM earlier. Ask the average man in the street and they will tell you that the economy is still ’soft’. I’m concerned that the increase in the OPR will devastate the fragile economy, especially with the government’s aim to reduce budget deficit so as not to ‘burden the future generations’.

Politics and economics mix as well as water and oil. Unfortunately, in this country, sometimes it’s hard to tell which is which…

another one. Here.

change the rules and the playing field. This is definitely the case here. For how long will we keep changing the rules? Don’t forget that the other players have every right to change their rules. What would happen if other countries start to impose import duties on our products? Who has more to lose?

There have been a lot of these lately. And they are the demands of a spoilt kid either. Read this, here, and here, just for starters. Too often, the powers that be just want to push the ‘magic button’ and they think/hope things will change. Unfortunately, outside of their ‘taj mahals’, things are not so simple.

Take the case of the quality vs cost of homes. There is a normally perfect negative correlation between the 2, i.e. if you want quality, you’ll have to pay more; the less you pay, the worse the quality. In Malaysia, however, buyers have to pay through their noses for houses which are of sub-standard quality. Why is that, you ask? Well, the main reason is that consumers have very little rights in this country, in relation to the big corporates. Anyone who has tried to seek compensation for any grievances against these corporates through our legal system will know what I mean. Most people I know have given up fighting the ’system’ and accept these ‘facts of life’ in Malaysia. As a result, there is no incentive whatsoever for the developers to build better quality houses. Why should they, when they can make more profit by using inferior materials/labour and still get away scot free? Sad, indeed.

Until this (the consumer rights issue) is addressed, what the PM wants, in terms of better quality homes, will be a mere pipe dream.

They are almost made into heroes. These doctors who were educated at the taxpayers’ expense have now decided to come back to the country. Read the article carefully. There are strings attached. For a start, they get to bring back cars tax-free, saving hundreds of thousands of Ringgit in the process. The Health ministry should disclose what other special ‘incentives’ have been promised and at what cost to the taxpayers.

Yes, Malaysia needs more doctors and specialists. However, these ‘prodigal sons’ should not be made to feel special. After all, it’s the least they could do for the taxpayers and country who have spent hundreds of million educating them. Anything less, they should be branded ‘traitors’ and dealt with accordingly!

What the PM said (read the context here) is the exact opposite of what was said when the government decided to reduce subsidy on fuel prices. Read here.

“We can’t ignore the feelings of the people because we are the government elected by the people, for the people,” he said. Wow, this could have come straight from one of my earlier blogs!

Of course he doesn’t really mean it. It’s convenient to use this as an excuse for whatever the real reason is that the government has decided not to proceed with the ’scenic’ bridge. Let’s see who makes the next move …

Wong Chun Hai, in his Sunday ‘on the beat’ column, puts forward a rather convincing case for increasing the pay of the police force. Read here. However, I think he’s lost the plot completely when he started to compare apples with oranges, and I quote “In comparison, his London counterpart earns at least £1,897 (RM12,132) monthly while in Hong Kong, he would get HK$14,670 (RM6,943). In Singapore, a corporal gets S$1,612 (RM3,682) while in Malaysia, the same rank gets a minimum RM824.” For you information, Mr Wong, everyone, and I mean everyone, is paid more in Singapore, London and Hong Kong. For example, a fresh graduate joining one of the big international accounting firms in KL can expect to earn about RM2,000, while he can earn approx. S$2,000 (RM4,500) in Singapore and £2,000 (RM12,500) in London. At first glance, it would seem that dollar for dollar (without converting), the constable in Malaysia is getting paid less. However, one has to bear in mind that the average constable in Malaysia probably joined after his SPM exams, while the average constable in Hong Kong, London or Singapore probably has a diploma, if not a degree.

What I find most distasteful about the article is Mr Wong’s attempt to ‘justify’ the corruption within the police force. It’s the motivation and attitude of the police personnel that is the problem. They knew before they sign on the dotted line what is required of them. They know the danger of the profession and the (pathetic) pay that goes with it. So what’s the excuse? No one has put a gun to their head and forced them to become policemen/women. Even if the pay was increased, I believe the scourge of corruption would still continue. Only then, they would go for the ‘bigger fish’ and ask for more, as they would be risking more. In any case, wouldn’t it be a case of ‘bribing’ the police force to stop taking bribe?

I hope the root cause is dealt with. It’s much easier to try to ‘pay’ the nation out of this problem, but this is not the solution.

I know he has to say the right thing, but who could believe his statement? Read here. I don’t think Malaysia will ever be in the driving seat of the world economy, no matter how much we grow. He has definitely gone overboard with his ’shoe-polishing’ antics!

Hmmm… he could be referring to me in his speech

“He said the 9MP was formulated in such a way so that all groups would benefit from it, especially those who were lagging far behind previously.”

I hope he makes good his promise. I am just a little bit sceptical…

The authorities are finally holding someone responsible for Dr Liew’s death. The site supervisor has been charged for causing his death. Read here. By the way, did you notice that the news article still refers to his BMW? What is the relevance of the brand of the car in the incident? Couldn’t the report have just said his ‘car’? But I digressed.
Back to the topic at hand, it’s very convenient to ‘blame’ the supervisor for the incident. My question is, why stop at the supervisor? What about his bosses? What about the relevant ministers/ministry officials? Should they not share the blame? If you argue that they (his bosses) are too remote to be blamed, then by the same token, unless the supervisor was personally responsible for placing the slab there, he is not guilty. I understand there is a lot of pressure on the authorities to find a scapegoat, due to the ultra high profile of this case, but I hope they do the right thing. Let justice be served…