Thursday, September 06, 2012

Window Dressing Our 'Robust' Economy

The Malaysian government is borrowing heavily to stimulate our economy to give the impression that we are doing well. Our GDP exceeded expectation in the second quarter of this year as reported HERE. But this came with a cost, and a warning. Basically you don't create prosperity without a strong foundation, and that is what the current government isn't too concerned about. They want to window dress its credentials using borrowed funds. Today, S&P has come out with a warning HERE. Will the government listen or will it continue its spending spree? My take is it won't care what the rating agencies say, the Najib administration is using billions of ringgit to impress voters that they deserve to be re-elected. Managing the huge deficits will be dealt with later but of immediate importance is to win the upcoming 13th GE which is making many people tired, and sick, as commented HERE. It was predicted to happen several times this year but nothing happened. Obviously the timing wasn't right, the prime minister was gunning for the perfect date to secure a 'BIG' win. So the election is likely to be in November, supposedly his lucky number, probably at the start of the school holidays, but wouldn't that be a bad time too as many family will either go overseas for holidays or visit relatives and hence out of their constituencies? Surely if they are loyal to their political parties they will adjust their schedules.

We have a crazy election process where one man dictates the date. We must be setting the longest campaigning period record. Although the date for dissolution of the parliament hasn't yet been announced, politicians from both side of the divide have started campaigning although the candidate list haven't been determined. We can either get upset by it or just sit back and enjoy the comedy show some politicians put up almost daily for our consumption.

The real test is the day AFTER the general election is over. Who will clean up the mess created by the Najib administration with so much cash being given out as aids or 'bantuans' to swing voters allegiance? And will the next government be able to convince the people who were used to getting these 'bantuans' that those were one off and the government can no longer pay them?

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