Are Maids That Necessary?

"Thats a shitload of sand to vacuum."

In the blue corner, we have a maid whose face was branded with an iron. In the red corner, we have a maid who took off with half a million worth of luxury goods. Ready?

Fight.

This issue has been dragging on long enough to affect Malaysia and Indonesia's political dance; which has been devoid of any romance since the day Malaysia was formed. On one hand we have the Malaysians who actually need the assistance of maids to do the daily chores while the parents get off for work whereas on the other, Indonesians who are in dire need of a job - any job. But let us ask ourselves this one question first before we go deeper into the topic;

Do most Malaysians who claim that they need the service of maids actually need it, or are they just blatantly lazy? Or perhaps the main question is; because the services cheap enough, Malaysians have developed this perception that the price in which they pay can is worth the free time and hassle they receive in return? Fine, I lied; there's more than just one question.

Looking through the articles in which I've gathered, here we have issues such as maids getting ripped off by agencies, and making agencies reimburse clients due for unsatisfactory service provided, at the same time protecting maids' rights.

Yesterday I bumped into this article, where towards the end, it mentioned a very good point on how hiring maids results in children growing up without knowing how to perform simple tasks. I couldn't agree more or this; the over-reliance on maids has resulted in Malaysia developing a mentality where having maids in each household is the norm; without it a family becomes dysfunctional - ridden with simple tasks. Now can you categorize this as a form of "outsourcing" ? or do you reckon its just a way of dealing with laziness?

Personally I don't think its a form of outsourcing; laziness would probably be the primary driver. Much like how the industry would rather source cheap foreign workers (at the same time higher productivity) compared to hiring local staff. Can we blame them on this? Doubt it; but to the least there should be some control over the amount of maids being brought into the country, in order that we can curb the over-dependance on maids.

Question is; are we capable of doing it?

Notes to the Prime Minister

He has spoken!

Two recently good articles by Mahathir on how the west is poor and how Malaysians are immature in dealing in rationally discussed emotional and sensitive issues.

Why He Needs To Come Back

Ex-PM, 86 Years Old, still runs it Like A Boss

Despite being past his prime, he still exerts a strong influence over the country, while at the same time displaying hit wit and wisdom (with a tinge of criticism) in his latest public appearance. Always brings out goods points (but arguably not all the time); but I've always been an advent supporter of his Look East policy, condemning the West for their extravagant spending, and the mentality that they will always be rich.

Come back to us bro.

Diasporas; Benefits on Having Immigrants

I used to work as a Hooker - as in a person who hooks things.

I love how they titled the topic of the article which I was reading - magic indeed. Based on the article I was reading, migrants to a foreign country can actually be beneficial based on several key reasons ( map source can be seen here ) ;

1. The "diaspora network" - where one could actually benefit in terms of the networks in which the migrant has to his/her country of origin. In other words, companies/institutions hiring them may not be limited to local networks alone but also be given the opportunity to expand its operations outwards.
2. Spreading money - it is a fact that in general the migrants will be earning more than they would compared to working back home; repatriation of their monies to their homeland therefore would benefit both the domestic and foreign country.
3. Innovation carriage - upon returning to their country of origin, apparently many would set up companies carrying with them the knowledge and experience in which they have gained overseas; allowing their countries to develop.

If we were to exclude Hong Kong (although they have that two government one country thing) from the map; Malaysia would have the second highest number of Chinese emigrants overseas. Although technically speaking, this is entirely wrong - its too apparent that these figures take into account Malaysian-born Chinese (but in reality, as a result of having a large number of dumb Malay politicians they're still treated as China-born Chinese).

But to be fair bringing immigrants into a country is not all that well - if you examine the article earlier, it talks mostly about high skilled immigrants, and by right they would benefit any country they go to. What I believe is meant to be of much more concern is low-skilled immigrants (particularly evident for Malaysia) and how it depresses local wages for works in similiar category, carrying market distortion effects. How would labors of this category be beneficial overall for a country? Repatriation of wages back to their home country is applicable, but what about carrying valuable contacts, innovation or creativity? Even if there were to be any, the amount would be minimal.

High tide for change?

Export-led Investments; Beneficial?

On the contrary; he's running because of knobheads like you

I found this interesting piece on my new favorite website on how Export-led Investments not only seems to raise living standards in any developing country but also upgrades export quality. Another outcome found by the paper was that there was a positive correlation between FDI and higher unit value of exports. Based on what I read from the paper, Export-led Investments carries the following plus points;

1. Boost exports of mediums killed sectors in developing countries. Apparently the bulk of investments done by companies are more than just low skilled manunfacturing, but more skewed towards medium skilled products (automotive parts, electronics and electricals etc). These form of investments are 14 times higher than low skilled manufacturing.
2. Results in upgrading within the sectors. Done through MNC's superiority - resulting in higher unit values of exports, where local companies can also learn from their operations. Productivity spillovers results in the abundance of higher quality inputs therefore benefiting indigenous producers of final goods.

However, export complexity / structure remains unchanged, and there are tendencies where FDI brought into more advanced / developed countries carries minimal impact on export quality. Now my problem is not that I don't believe this - I just still dont think that export-led investments are the way to go for any developing country wishing to catapult itself into a high-income nation, for instance, Malaysia.

Electrical & Electronics components plays a significant role in the country's exports - and although the foreign companies in Malaysia only amounts to half of the total players, they control over 90% of the exports. As a result, local indigenous players are being squeezed out. They can learn from the MNCs but they will never be as good as them as the MNCs will keep some of the secrets to themselves too. What Malaysia fails to see is in the long term - is that it doesnt help elevating Malaysia to high income status. To me, the matter of repatriation of profit done by these foreign MNCs would also result in a loss from Malaysia; we're pretty much being 'used' by these capitalistic people.

Now I can understand the nature; actually its beneficial to both sides but we could do better by actually learning from them rather than letting them use Malaysia as a temporary base for their operations. Without a strong global domestic company like we see in Korea and Japan, we will never be able to advance to a more developed economy. The key is specialization, protectionism and differentiation from our other Asian counterparts, not by blindly attracting FDI for short to mid term gains and attempting to go all rounder when developing our industrial base; there are no "jack of all trade" millionaires.

So its about damn time we wake up.

Ease of Doing Business 2011



Thats what I call ease of doing business.

I was really impressed when Malaysian Insider reported that Malaysia has risen ranks to number 18th on World Bank's Ease of Doing Business Report for 2011. But this was somehow shattered when I saw 113th for the "Dealing with Construction Permits" category, and took another level when they ranked 1st for "Getting Credit" category, along with countries such as United Kingdom, and ironically, South Afirica. Recalling my previous post on rising household debt, I don't know whether I should see our position in being number one in getting credit as a positive thing.

Korea & Japan ranked 8th and 20th respectively; I was rather dumbfounded to see Japan being ranked below Malaysia. It seems that South Korea had a major advantage in ranking when it comes to Enforcing Contracts, whereas Japan was ranked well below in terms of Paying Taxes. Also surprisingly, Malaysia was seen as a better place compared to both of the countries in terms of protecting investors - something which a country still short of high income status really needs (capital investments in particular). All in all, aside from the Getting Credit category, I think there is still much room for improvement in Malaysia's rankings.

Looking forward to next year's rankings.

Household Debts; A Major Concern?

So how long will it take until it goes boom?

There seems to be some concerns by economists after the Budget anouncement; that the government seems to be spending their coffers without taking into account the global conditions - in other words, they're being too optimistic. Economists are concerned about the rising household debt in Malaysia, apparently walking on a trend similiar to the 2008 financial crisis. Apparently the rising debt is attributed to repayment of loans (housing and car) as well as private consumption. Let me just touch on the two; repayment of housing and car loans.

For housing loans, I think its quite evident that the majority of the snowballing rise is attributed to owners purchasing their 2nd or even 3rd house ; leaving to the younger first house buyers outside of the loop. The reasoning? Pure investment. But many people fail to realize that once the market moves into a purchasing frenzy through, driven by pure investment rather than consumption, this could flow into a housing bubble. The result? Those with vision (too much vision) and considerable income have no liquidity; whereas the young ones end up homeless and fighting for a good space. As for car loans, its simply pure manipulation; the government actually wants people to get car loans - to help Proton, much like how they subsidize fuel to keep it cheap, to help Petronas. These two factors inarguably results in citizens not pressuring the government enough to develop a world class effecient public transportation system.

Now apparently, the same problem is happening in Korea, but it is slightly different in the case of Koreans. Based on my readings and observations, the rise in debt is mostly attributed to Jeonse Loans, and unlike Malaysia, they have limited land and twice the number of people. What is similiar to Malaysia is the rising debt is attributed to rising living expenses however there is no market distortion in Korea; no subsidies, no manipulation of preferences - creating a competitive and effecient market driven system. The Korean government was even forced to take measures such as increasing interest rates, with a more extreme method of blocking personal loans. To the least, the government recognizes this issue and is actually formulating a plan to combat and reduce the household debt in the country. What about Malaysia's Government?

Now I hate banks even more.

Why Stupid People Get Richer

Is a very interesting book title

Here we have the deputy chairman of The Star giving a speech to UTAR graduates on how to be more creative and take (calculated) risks. An interesting and thoughtful speech.

Would've been better if I was there to hear it myself.

Government Subsidies; Helping or Spoiling

Can you blame them for leaving?

I was sitting outside having a smoke and enjoying a cup of coffee while writing a University Assignment for my Chinaman friend (which he paid me to do), somehow I drifted off about thinking about the level of competition in Malaysia. Then I recalled about this one article which I read in The Star about how Malaysia is stuck in the middle-income trap, and if the government changed certain policies, future developments would soon ensue. One of the policies which the article suggested changing was government subsidies.

But wait, aren't subsidies meant to help people? Millions of Malaysians can buy rice, sugar, and more importantly petrol, at much lower rates compared to our neighboring countries? Wouldn't it be better to help our poor economy if the government kept subsidizing shit and feed it straight into our pie-holes? I came up with a perfect illustration on the effects of the government subsidies. Let's make things simpler, and look at it from a different angle;

Assume you have a kid, old enough to talk. Now as he grows, you'll need to continue feeding him, and pay his share of housing costs, utilities, school or university fees, parking tickets, and in some cases, you inadvertently give your kids money to go clubbing or buy drugs. When the time comes, he'll graduate, gets his own job, and you stop paying his fair share of costs; although this depends exactly on when he moves out. So as a parent, you want your kids to grow up, get a job, and stop depending on you right?

Don't you think Malaysian's are at a stage where they're old enough to get a job, so that our parents (our lovely government) don't have to subsidize (pay) for our living costs anymore? If you keep giving money to your kids, wont they end up being too dependent on you?

And more importantly, why are they subsidizing retarded things? The logic of subsidizing things, to me, is to help things grow, develop, and mature (e.g. Transportation, Renewable Energy, Education). So let's take a look of the things in which the government subsidizes;

1. Rice - For what purpose? I'm pretty sure without subsidy it would still be affordable. Did the government want us to eat a lot of rice and end up being fat, then die from obesity, depriving the government the ability to tax us?

2. Sugar - It's sweet for the government to do so, but I think Malaysian's should also taste the bitter side of life. Does more sugar intake result in an increase in economic development? Does more intake result in better employment, higher education, or technological development? No. It results in deaths, and one less person to pay taxes to the government.

3. Petrol - The heart of the global economy. I can understand the subsidy from a commercial perspective, so why not subsidize trucks or commercial vehicles only? Why not fix it at a certain percentage to the market price? Cheaper petrol results in more cars (obviously profiting Perodua and Proton, especially Petronas) but it also creates an environment where citizens dont pressure the government enough to develop a more efficient Public Transportation system (e.g. South Korea and Japan). I'm still waiting for the KVMR which the government promised to build 100 years ago.

4. Controlled Prices - Controlling the price of Chicken constricts developer's profits - also a form of subsidy, turning us into cowards or more accurately, we become chicken shit. Beef? Why bother controlling the price of beef? I didn't know that if you control the price of beef, it would have vast effects in developing our intellectual capacity?

I smell corruption.

The effects are simple. When you end up subsidizing bullshit things, the government can't spend effectively to develop a country, resulting us being stuck in the middle income trap, and a butt load of Malaysians moving overseas to countries where they don't subsidize things which a 12 year old would need.

I know most of the things I just said are nothing more than mere rants, but I do know that some of it is true and factual; so now we know about it, what do we do with it?

Notes To The Prime Minister.

Is full of typos.

But the book itself is a vivid reminder of the Asian Financial Crisis which struck the region in '97. What made me like the book (aside from the fact that I got it for free) was how the author wrote, in detail, how the crisis affected the country, as well as Tun Dr. Mahathir's predicament at that time. The conditions and perils in which Malaysian citizens suffered, as well as the reasoning for the drastic measures in which Mahathir was forced to take, to subsequent castigation's by the international community, all documented in one full of typos good book.

Although I might have thought differently if I actually had to pay for the book. 

There were a number of pages which caught my attention but one page stood above all else - Page 336, where details on the criticisms made by the international community was laid down. Business Week labelled Malaysia as a renegade economy, and that the government made the worst possible choice. The International Herald Tribute proclaimed that Malaysia shut the door on the global economy. A London-based analyst claimed that Malaysia suffered an IQ-crisis. Pretty harsh.

When the government decided to peg the Ringgit to USD$3.80 it was blatantly obvious that the ringgit was being undervalued, depriving Black Market traders from the incentive to conduct currency exchanges. Since the country refused support from the International Monetary Fund, they were not burdened with ridiculous interest rates unlike Indonesia and Thailand, allowing them to have much more freedom in managing their budget without foreign intervention. In the end, it seemed that the measures which the government took neither helped the economy to recover, nor did it inadvertently made it worse. Recovery ensued nonetheless.

Where most of the western community backed the IMF's revival package for Asian countries, one particular oddball, Paul Krugman's Plan B to revive Asian markets was very similar to the actions Mahathir took. In his article, he noted that instead of cutting spending and increasing interest rates, the exact opposite should be enacted. He believed that the Asian economies were in dead water and all they needed was something to jump start them back into drive mode. So maybe he was spot on, in a way.

I believe that the book should be kept in close quarters for young Malaysians as a reminder of the past, to never forget the difficulties in which the country faced, and how it survived and recovered faster among its peers. Although I'm pretty sure most youngsters would prefer having Justin Bieber CD's with Japanese Mangas stacked up on their book racks.

To the least, it will have a place on my bookshelf.