Friday, January 16, 2009

RAZALEIGH LAYAK JADI PENASIHAT EKONOMI KERAJAAN MALAYSIA

Tengku Razaleigh Hamzah berpengalaman luas dalam bidang ekonomi, kewangan dan perdagangan antarabangsa. Lantaran itu, kerajaan Malaysia wajar memandang serius pandangan Razaleigh di bawah ini. Kerajaan juga seharusnya sudi menimbangkan Razaleigh ke jawatan penasihat ekonomi untuk membantu negara dalam usaha memulihkan ekonominya yang dilanda krisis global mutakhir ini! – Ruhanie Ahmad

Razaleigh:Negara Perlukan Projek Pelaburan Awam Yang Mantap

KUALA LUMPUR, 15 Jan (Bernama) -- Negara memerlukan projek-projek pelaburan awam yang dipandu oleh wawasan, yang direka secara berstrategi dan ditadbir dengan integriti yang kebal, dalam usaha untuk keluar daripada kemelut kelembapan ekonomi global pada masa ini, kata bekas Menteri Kewangan, Tengku Tan Sri Razaleigh Hamzah.

"Kita tidak memerlukan satu lagi pakej rangsangan untuk dibelanjakan di sana sini.

"Apa yang kita perlukan dan apa yang krisis itu berikan kepada kita peluang untuk laksanakan ialah satu set projek yang berani dengan berlatar belakangkan ekonomi untuk membantu Malaysia merealisasikan pembangungan yang kita telah hilang," kata beliau pada majlis makan tengah hari di Persidangan Tinjauan Strategik Malaysia Institut Kajian Strategik Kepimpinan Asia yang ke-11 hari ini.

"Kejayaan ialah satu pencapaian kompleks atau rumit yang sebaliknya bergantung kepada penambahbaikan transformatif dalam tadbir urus dan kejayaan memperbaharui sistem politik kita, kata beliau sambil menambah yang seseorang itu kini mesti mengambil langkah-langkah yang berani dan berimaginasi.

"Kita mesti berusaha untuk menghasilkan penambahbaikan transformatif dalam dasar dan politik tadbir urus. Ia juga memerlukan kerajaan berbelanja dengan berani ke atas perkara yang betul dengan cara yang sesuai bagi merangsang permintaan," kata beliau.

Oleh itu, langkah yang betul ialah pelaburan awam dengan pelbagai kesan yang meluas dalam tempoh jangka pendek dan panjang. - BERNAMA

http://www.bernama.com/bernama/v5/bm/newsbusiness.php?id=384010

9 comments:

Hang-Jebat said...

Terbukti KuLi merupakan anak EMAS Malaysia. Wawasan beliau memang diakui jauh kehadapan. Sila baca artikel "How Malaysia Can Cope with and overcome the Effects of the Global Economic Crisis". Hamba terjumpa artikel ini di blog Lim Kit Siang. Diusia beliau makin senja, akal fikiran beliau seakan masih muda remaja. Sayang cuma sedikit pertelingkahan dengan DrM di lewat 80an. Jika ia tidak berlaku pasti Malaysia sudah setaraf Jepun dan Korea. Pemimpin hari ini perlulah mencontohi wawasan kepimpinan seperti KuLi dan DrM bukan si Flip-Flop. Maaf dan fikir-fikirkanlah.

Mika Angel-0 said...

Puteramaya
Salaam Siber!

Teori Inflasi
(menangani deflasi dan depresi)

"Kejayaan ialah satu pencapaian kompleks atau rumit yang sebaliknya bergantung kepada penambahbaikan transformatif dalam tadbir urus dan kejayaan memperbaharui sistem politik kita, kata beliau sambil menambah yang seseorang itu kini mesti mengambil langkah-langkah yang berani dan berimaginasi.

"Kita mesti berusaha untuk menghasilkan penambahbaikan transformatif dalam dasar dan politik tadbir urus. Ia juga memerlukan kerajaan berbelanja dengan berani ke atas perkara yang betul dengan cara yang sesuai bagi merangsang permintaan," kata beliau.


MoF1 kata sesuatu yang mempunyai 'great multiplier effect'.

Mana pergi NCER, ECER, SCORE yang dianggarkan berjumlah RM600biliun pada tahun 2008.

Dengar-dengar semuanya pangsan atas paras-paras buku lama di MoF kerana Keraaan 'tak ada duit'.

Sekarang anak raja ini buka mulut bawa cerita baru yang bunyinya saperti orang baru bangun dari tidur.

Minta dia baca dulu sebelum melalak:

1. Sustained Budget Deficits: Longer-Run U.S. Economic Performance and the Risk of Financial and Fiscal Disarray
Budget Deficit, U.S. Economy, Federal Budget


Allen Sinai, Chief Global Economist
Peter R. Orszag, Senior Fellow
Robert E. Rubin, Office of the Chairman

AEA-NAEFA Joint Session, Allied Social Science Associations Annual Meetings, The Andrew Brimmer Policy Forum, ""National Economic and Financial Policies for Growth and Stability""

5-Jan-04 — Introduction
The U.S. federal budget is on an unsustainable path. In the absence of significant policy changes, federal government deficits are expected to total around $5 trillion over the next decade. Such deficits will cause U.S. government debt, relative to GDP, to rise significantly. Thereafter, as the baby boomers increasingly reach retirement age and claim Social Security and Medicare benefits, government deficits and debt are likely to grow even more sharply. The scale of the nation's projected budgetary imbalances is now so large that the risk of severe adverse consequences must be taken very seriously, although it is impossible to predict when such consequences may occur.

Conventional analyses of sustained budget deficits demonstrate the negative effects of deficits on long-term economic growth. Under the conventional view, ongoing budget deficits decrease national saving, which reduces domestic investment and increases borrowing from abroad.1 Interest rates play a key role in how the economy adjusts. The reduction in national saving raises domestic interest rates, which dampens investment and attracts capital from abroad.2 The external borrowing that helps to finance the budget deficit is reflected in a larger current account deficit, creating a linkage between the budget deficit and the current account deficit. The reduction in domestic investment (which lowers productivity growth) and the increase in the current account deficit (which requires that more of the returns from the domestic capital stock accrue to foreigners) both reduce future national income, with the loss in income steadily growing over time. Under the conventional view, the costs imposed by sustained deficits tend to build gradually over time, rather than occurring suddenly.

The adverse consequences of sustained large budget deficits may well be far larger and occur more suddenly than traditional analysis suggests, however. Substantial deficits projected far into the future can cause a fundamental shift in market expectations and a related loss of confidence both at home and abroad. The unfavorable dynamic effects that could ensue are largely if not entirely excluded from the conventional analysis of budget deficits. This omission is understandable and appropriate in the context of deficits that are small and temporary; it is increasingly untenable, however, in an environment with deficits that are large and permanent. Substantial ongoing deficits may severely and adversely affect expectations and confidence, which in turn can generate a self-reinforcing negative cycle among the underlying fiscal deficit, financial markets, and the real economy:

As traders, investors, and creditors become increasingly concerned that the government would resort to high inflation to reduce the real value of government debt or that a fiscal deadlock with unpredictable consequences would arise, investor confidence may be severely undermined;

The fiscal and current account imbalances may also cause a loss of confidence among participants in foreign exchange markets and in international credit markets, as participants in those markets become alarmed not only by the ongoing budget deficits but also by related large current account deficits;

The loss of investor and creditor confidence, both at home and abroad, may cause investors and creditors to reallocate funds away from dollar-based investments, causing a depreciation of the exchange rate, and to demand sharply higher interest rates on U.S. government debt;

The increase of interest rates, depreciation of the exchange rate, and decline in confidence can reduce stock prices and household wealth, raise the costs of financing to business, and reduce private-sector domestic spending;

The disruptions to financial markets may impede the intermediation between lenders and borrowers that is vital to modern economies, as long-maturity credit markets witness potentially substantial increases in interest rates and become relatively illiquid, and the reduction in asset prices adversely affects the balance sheets of banks and other financial intermediaries;

The inability of the federal government to restore fiscal balance may directly reduce business and consumer confidence, as the view of the ongoing deficits as a symbol of the nation's inability to address its economic problems permeates society, and the reduction in confidence can discourage investment and real economic activity;

These various effects can feed on each other to create a mutually reinforcing cycle; for example, increased interest rates and diminished economic activity may further worsen the fiscal imbalance, which can then cause a further loss of confidence and potentially spark another round of negative feedback effects.

Although it is impossible to know at what point market expectations about the nation's large projected fiscal imbalance could trigger these types of dynamics, the harmful impacts on the economy, once these effects were in motion, would substantially magnify the costs associated with any given underlying budget deficit and depress economic activity much more than the conventional analysis would suggest. Indeed, the potential costs and fallout from such fiscal and financial disarray provide perhaps the strongest motivation for avoiding substantial, ongoing budget deficits. 3

Conventional analyses of budget deficits also do not put enough emphasis on three other related factors: uncertainty; the asymmetries in the political difficulty of revenue increases and spending reductions relative to tax cuts and spending increases; and the loss of flexibility in the future from enacting tax cuts or spending increases today. Budget projections are inherently uncertain, but such uncertainty does not provide a rationale for fiscal profligacy. The uncertainty surrounding budget projections means that the outcome in the future can be either better or worse than expected today. Such uncertainty can actually increase the incentive for more saving ahead of time—in other words, for more fiscal discipline. In addition, it is much harder for the political system to reduce deficits than to expand them. As a result of this asymmetry, enacting a large tax cut or spending increase today is costly because it reduces the flexibility to adjust fiscal policy to future events. Therefore, large tax cuts or spending increases today carry a cost typically excluded from traditional analysis: They constrain policy-makers' flexibility to respond to unforeseen events in the future.

Thus, in our view, to ensure healthy long-run U.S. economic performance, substantial changes in fiscal policy are needed to deal preemptively with the risks stemming from sustained large budget deficits and the economic imbalances they entail. The political system, however, seems unwilling to address the threat posed by future deficits and to make the necessary choices to put the nation on a sustainable fiscal course.4 Failing to act sooner rather than later, though, only makes the problem more difficult to address without considerable instability, raises the probability of fiscal and financial disarray at some point in the future, and runs the risks of further constraining policy flexibility in the future.

We emphasize that our focus is on the effects of ongoing, sustained budget deficits. It is important to underscore that temporary budget deficits can be beneficial by providing short-term macroeconomic stimulus when the economy is weak and has considerable unused resources of capital and labor. When necessary to spur a weak economy, policy-makers could employ various fiscal policy programs, each with relative advantages and disadvantages in different contexts. Whatever decisions are made about short-run fiscal policy when the economy is weak, the objective should be budget balance over the business cycle.

The next section of this paper presents projections of federal government budget deficits over the next 10 years and thereafter, including baseline projections and sensitivity analysis. Section III presents the conventional view of the effects of federal budget deficits. Section IV discusses the potentially more important financial and economic effects not included in the conventional view. A final section provides some perspectives on approaches for restoring fiscal discipline.


2. China trade slump deepens
Tuesday, January 13, 2009
11:02 Mecca time, 08:02 GMT
Business

(Unemployment is on the rise as China feels the imapct of the global economic crisis [EPA])
China's trade slowdown worsened in December with government figures showing exports fell at their fastest rate in a decade, fuelling a slump that has triggered a wave of factory closures and layoffs.

According to the General Administration of Customs exports fell 2.8 per cent last month from a year earlier, while imports were down by 21.3 per cent – an indication of rapidly falling domestic demand in industries such as construction, auto sales and steel.

The customs agency said it was the second consecutive monthly decline in both exports and imports, which dropped in November by 2.2 per cent and 17.9 per cent, respectively year-on-year.

The news came as the mayor of Shanghai, China's financial capital and a major export manufacturing centre, said he expected the city's economy to grow by around 9 per cent in 2009.

Such a rate would be the envy of most other economies, but would be slowest seen in Shanghai in 17 years.

Deep impact
Shanghai's mayor has warned the city faces a tough year ahead [EPA]
"At present, the global financial crisis has not yet hit bottom, its impact on the global real economy is still deepening," Han Zheng said in a speech to the annual session of the city's parliament on Tuesday.

"2008 was a difficult year for Shanghai's economic development," he said. "Still, Shanghai's economy is likely to face even more and harsher difficulties in 2009, though it also faces opportunities."

From 1992 to 2007, Shanghai recorded double-digit economic growth every year, with estimates for 2008 indicating an expected growth rate of above 10 per cent.

Zheng's warning coupled with Tuesday's trade data is the latest indication of the escalating impact of the global downturn on China's economy.

A report by US financial services group JP Morgan & Co said December's export decline was the sharpest since April 1999 and it expect export growth to be flat through 2009.

Meanwhile some China-based analysts have cast doubt on the accuracy of the government's figures.

"The real situation is probably worse than the statistics indicate. That's what I see on the ground," Andy Xie, an independent economist based in Shanghai, told the AFP news agency.

Unrest fears
(China's economic growth has been heavily dependent on exports [EPA]
Chinese leaders have announced a raft of stimulus measures in recent weeks, hoping to prop up economic growth and avoid job cuts that they fear could spark mass outbreaks of unrest.

Measures have included tax cuts for exporters and other steps to help struggling producers of textiles, toys and other goods.

In November officials announced a $586bn stimulus package aimed at boosting domestic consumption and reducing the economy's reliance on exports.

Wen Jiabao, the Chinese premier and the country's top economic official, has promised additional steps to create new jobs.


3. Can the Middle East Build a Global Middle Class?
Navtej Dhillon, Director, Middle East Youth Initiative
Djavad Salehi-Isfahani, Nonresident Guest Scholar, Global Economy and Development, Wolfensohn Center for Development, Middle East Youth Initiative

The Brookings Institution

May 19, 2008 —
Surging crude oil prices are making the Middle East flush with cash, bringing back memories of the boom and bust of the 1970s.

After the 1973 oil price increase, the West’s attention was focused on recycling the petrodollars rather than how countries used the new inflow of wealth to diversify and expand their economies. Today, as the U.S. focuses on stabilizing Iraq and increasing oil production, the Middle East is struggling to turn its new wealth into lasting economic development. From protests over the price of cooking-oil to bread riots in Egypt, discontent is growing as inflation rises.

But behind the long lines for government food subsidies, lies another hunger more difficult to fulfill: for better jobs and upward mobility. This hunger has been satisfied in other developing regions by a vibrant and productive middle class, which can compete in the global economy. To midwife a new middle class, the Middle East must build on and undo the inheritance of the last oil boom.

The 1970s boom created a social middle class but not an economic one. Infused with billions of dollars, sheikhs and emirs lifted millions of people out of poverty. Development centered on pills and pens - reducing fertility and increasing education. As a result, today an average family has fewer children and spends more on the education of their children. Average enrollment in secondary education stands at more than 60% and in some countries women are outnumbering men in universities.

However, in a globalized world these social gains are no longer sufficient for lasting economic advancement, especially for younger generations. Public sector employment – which for decades buttressed an expanding middle class – is fast running out of steam. This has given way to a workforce which seeks the comforts of a middle class but doesn’t share the skills and working habits of their peers in East Asia and Europe.

As state payrolls retrench in the face of a youth bulge, waiting times for public sector jobs are getting longer. Amidst soaring oil revenues for the region, youth in the larger populated countries are losing hope and lack a clear direction.

While the young queue for state patrimony, the Middle East is losing the global race for skills and talent. In the quest for stable desk jobs for their children, parents invest hard earned money on private tutors to prep their kids for rote memorization and standardized tests. All the years of hard work end in dashed hopes of a secure job and little learning. In international tests on Mathematics and Science, Middle Eastern countries like Jordan, Iran and Tunisia rank below the worldwide average.

Sensitive to the growing discord, Middle Eastern leaders are adopting a wide range of strategies. Iran is turning to populism by focusing on redistribution and hand-outs to the poor and unemployed. President Ahmadenejad calls this policy bringing oil money to people’s dinner table. Qatar and Saudi Arabia have adopted elitism by importing the best of U.S. university education to the Middle East to attract talent from across the region. Jordan and Egypt are resorting to subsidies to tackle the immediate food crisis.

This is a regressive course as it risks marginalizing the private sector –– the very engine for expanding the middle class. Historically, populism and Arabism, especially at a time of crisis, have made private industry the scapegoat. Elitism only perpetuates the notion that wealth remains in the hands of the few, emboldening anti-private sector sentiments.

But this time around, a reckoning might emerge: parents are asking not only for shorter bread lines but also shorter job queues for their children. More of them can be made to realize that their children’s future is more in the hands of the private sector than the state. They might be willing to support reforms that give the private sector greater influence, not just in investment and production, but also in what students learn. Reformers inside and outside the government would do well to enlist the large number of parents who have the greatest stake in bringing about this transformation.

The positive legacy of the 1970s windfall resulted in a more educated and a healthier population – a genesis for a modern middle class. The latest boom can complete this modernization by building a confident and globalized middle class. By taking advantage of the confluence of two historic opportunities, the gifts of oil and demography, Middle East can achieve lasting prosperity.


4. Gulf states not slowing down economies

Huge public schemes aim to help Gulf economies as credit crunch takes big toll on private businesses.
By Ali Khalil – DUBAI

Major air and rail projects are among huge public sector schemes going full steam ahead in Gulf countries, underpinning local economies as the credit crunch takes a big toll on private businesses.

Power and water infrastructure plans are also in the pipeline as governments invest the vast revenues from high oil prices in recent years, offsetting a rapid scaling-down of private investment, particularly in property development.

"After 20 years of under-investment, there is an absolute need to invest in key areas, like water and power projects ... These projects are likely to continue," said economist Monica Malik, from EFG-Hermes investment bank.

Gulf countries are spending billions of dollars on expanding their airports or developing new ones after their investment in infrastructure shrank during years of cash-shortage amid low oil prices in the 1980s and 1990s.

The six members of the Gulf Cooperation Council (GCC) have expanded spending in recent years in tandem with the recovery in oil prices, which hit a record of 147 dollars a barrel in July this year before tumbling to around 40 dollars.

The GCC groups Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.

OPEC kingpin Saudi Arabia and gas-rich Qatar, in addition to the wealthy UAE emirate of Abu Dhabi, "are likely to continue with a large proportion of their investment plans," Malik said, implying that these monarchies face no cash shortages at the moment.

Saudi economist Salim al-Gudhea agreed that the kingdom, which has built huge reserves on the back of record oil prices, will not backtrack on its commitments to develop the mega-projects already announced.

"The government has announced a commitment of ... 400 billion dollars for the next five years ... The government here is very careful when mentioning numbers," he said.

"It seems to me there is a very strong political will not to slow down the economy," he added.

The Saudi economy was estimated by the IMF to have expanded by 3.5 percent in 2007 and was projected to grow by 5.9 percent this year.

Although the Saudi British Bank this month slashed its estimate of Saudi oil export revenues for 2008 to from 350 billion dollars to 287 billion dollars, this is still 40 percent above the 2007 record of 205.5 billion dollars.

Meanwhile, private investment in Gulf property development is in a critical state, mainly in the booming UAE city-state of Dubai which has pioneered a real estate boom over the past few years.

"Areas that are most likely to see projects canceled or put on hold are property developments in Dubai," Malik said, echoing reports of a serious deterioration in a sector that until recently was the locomotive of Dubai's rapid economic growth.

"Developers may find it increasingly difficult to fund projects and there could be an increasing number of projects being delayed or postponed," said the Dubai-based Al Mal Capital investment bank in a report last month.

Emaar, the property group behind Burj Dubai, the tallest building on earth at around 700 metres, has seen its share price plunge 80 percent this year to stand at its lowest level since its listing eight years ago.

Rival Dubai developer Nakheel, promoter of several iconic schemes like three palm-shaped artificial islands, said last month it had decided to scale back its work and cut 500 jobs-- that is 15 percent of its workforce.

The 95-billion-dollar Jumeirah Gardens plan, which was astonishingly announced in early October to coincide with the onset of the global financial crisis, is already being revised, said the government-owned Meraas Development.

At the same time, infrastructure projects in the fast-growing emirate are set to continue at full pace and the government may benefit from cheaper building materials amid falling private demand.

Dubai has committed itself to spending 3.3 billion dollars on the construction of two urban railway lines.

The Dubai Metro's first service, the Red line, will be the world's longest fully-automated rail link when it opens in September. The Green Line is scheduled to open a year after.

Last week, Dubai awarded a 1.3 billion dollar contract to build a new concourse at its international airport -- the busiest hub in the Middle East.

Despite speculation over Dubai's ability to tap the international debt market, US bank Citigroup was reported on Monday to have extended loan facilities of eight billion dollars to public sector projects in the emirate over recent months.

The city's rapid development and huge influx of expatriates over the past years have strained its infrastructure, making investment in key areas a must.

Its population is believed to have grown close to two million, although official outdated figures still put it at 1.2 million.

Things are different in neighbouring Abu Dhabi, where the property boom is likely to continue due to supply shortages, Malik said, contrasting with an apparent overbuilding in Dubai.

However, Kuwait said it has decided to reconsider an ambitious 130-billion-dollar five-year plan aimed at turning the emirate into a business hub, which was scheduled to start next year. Falling oil revenues for OPEC's fourth largest producer were cited as the reason.


Rasa-rasanya, Puteramaya, tindak tanduk Rusia dalam menangani isu eksport gasnya ke Eropah sangat berani dan satu langkah yang pintar. (kita belum harus cakap pasal global finacial system meltdown yang disebabkan oleh sistem kapitalis Wall Street yang hilang kawalan dan masih belum ada penawarnya itu)

Rasa-rasanya, Puteramaya, tahulah kenapa MPGua Musang ini amat senang ditarik hidungnya oleh mereka yang pintar saperti Tun Musa Hitam...ini pun ada hajat nak jadi Penasihat Ekonomi atau PM Malaysia!??

Maka saya bertanya, beginikah hebatnya celek ekonomi orang-orang istana apabila tidak gila kuasa?

Dan harap-harapnya anda cepat-cepat cemerlang dalam program 'Masters' dan terus kepada program Phd, Puteramaya. Amiiin!

Mika Angel-0 said...

Puteramaya,

Mighty Abdullah To The Rescue
(there he goes to save the day)

1. Budget 2009: Colossal figures, lost dreams, cruel reality
First Published 2008-12-30,
Last Updated 2008-12-30 17:12:40

Saudi pledges to inject half of ‘historic budget’ in major developments projects amid low public expectations.
By Habib Trabelsi - PARIS

Despite the global financial crisis, oil-superpower Saudi Arabia has pledged to inject 60 billion dollars, almost half of its 2009 budget, in major development projects from its huge reserves estimated at 450 billion dollars.

Since the announcement on December 22 of the "largest budget in the history of the kingdom", many voices have praised the government for its willingness to move forward in its strategic projects, despite the drastic fall in the price of crude while the world is gripped by the financial turmoil.

Other discordant voices said that many Saudis were struggling in the real daily difficulties and did not care about the astronomical numbers. "Yahia Al-Khassafi is one of these Saudis," wrote Hamoud Abu Taleb on December 27, a prominent columnist of the daily Al-Madina.

Yahia, the "inventor" in spite of himself

Indeed, Yahia is indigent. He feeds eight mouths, including a disabled child who he has to take almost daily to the hospital which is one kilometer away from his home perched in the high mountains of the southern province of Jizan. So Yahia invented a family "cable" of wealth, reported the daily Al-Watan on December 25 with a photo as a back-up.

The photo shows him suspended between sky and earth, a third of the body buried in a vulgar metallic case rolling on a cable with a disproportionate pulley. Yahia is clinging to the case with one hand and holding his son with the other: a high-risk exercise of a tightrope walker.

"What do all these billions, which are dedicated to health, education, transport and social welfare, bring to Yahia who nibbles a meager allocation for each consultation?” asks Abu Taleb.

Numbers and achievements

The day before, the same columnist acknowledged that "the figures of the ‘budget of prosperity’ are enormous," referring to 475 billion riyals (127 billion USD) allocated to public expenditure, including SR 225 billion (over 60 billion USD ) for social services, up 36% compared to the previous fiscal year.

"The main thing for citizens is to turn these figures into achievements, to fulfill promises on the field (...). However, many projects of previous years have not yet started to emerge. They either stalled or did not give the expected improvement of vital services such as health, education or others," he wrote in the headline "the figures and the reality."

Two days earlier, Ali Moussa Al-Saadi of Al-Watan, kickstarted a series of vitriolic articles in the local press. He emphasized that "the colossal figures of the budget will remain ink on paper, like the multi-billion projects in previous years unless accompanied by concrete achievements."

"My children always live in rented homes turned into schools of fortune. I always struggle to buy a bottle of drinking water. We still dream of the clinic which is slow to materialise. The streets of our neighborhood have been waiting for fifteen years to be paved, while the neighborhood is located in the most beautiful avenue of Jeddah. When the night falls, the street plunges into total darkness, in the absence of light," wrote the editorialist.

Daydreams of deprived Saudis

Several other journalists and analysts followed suit.

"Despite the record surplus of about SR 590 billion (157 billion USD) and revenue of about SR 1.100 billion (293 billion USD), generated from oil sales, the majority of Saudi citizens can rely on their modest salaries, while the whole world sees a Saudi as a traveling oil barrel," said Saud Al-Balwi in Al-Watan.

The writer reviewed Saudis’ main "daydreams": "They dream of hospitals where they are unlikely to have problems" such as medical errors due to negligence or the poor state of medical and health infrastructure and in some institutions. They dream of decent housing, because a homeless citizen is like a stateless person."

"We should also count the nightmares of water and electricity cuts,” added Balwi, deploring "the existence of numerous and large holes through which infiltrates the endemic corruption" in state institutions.

Other Saudis speaking on websites complain of poverty in one of the richest countries but "where more than a quarter of the population (estimated at some 17 million people) is below the poverty line."

Since King Abdullah ascended to the throne in August 2005, poverty is no longer a taboo: the local press has spoken of Saudis forced to sell a kidney to treat a relative, discharge debts or continue studies. It is not shameful anymore to mention the thousands of families living in squalid housing in corrugated iron.

Enough of convenience! Of transparency!

The economist and journalist of Al-Riyadh, Mohammed Rashid Al-Fawzan, asked on December 27 about the achievements of fiscal year of 2008, which had foreseen even more colossal expenditure (136 billion USD), announced many projects and raised great hopes."

"But we still see endless queues of people in search of drinking water. As for hospitals, that's another story! Budget follows budget and our problems on the ground are always the same," wrote Fawzan, before recommending "observers and analysts avoid saying that ‘everything is perfect', but require ministries to be fully transparent about their current achievements."

2009 budget: The most "intelligent"

Fawzan eyed tens of analysts, who took it in turns in the press and on television to talk about their support of “the budget of prosperity in this crunch time," the "budget of development and challenge "or, better still, the "intelligent budget.”

"Intelligent, because it distorted all expectations" of analysts and study centers. Intelligent, because it kept the momentum of development in force in the Kingdom for nearly five years. Of highest intelligence, because it instilled into Saudis optimism marred by caution," wrote on Issa Al-Halyane on December 25, a columnist in Okaz.

King Abdullah, the main sponsor of the "historic budget", was paid a huge respect. The Saudi grand mufti, Sheikh Abdel Aziz Al-Sheikh, who chairs the Council of Senior Ulema, the highest religious authority in the country, urged ministers and officials to implement the recommendations of King Abdullah in order to "protect the nation’s wealth."

The opposition pours out its everlasting criticism of the regime

The Movement for Islamic Reform in Arabia (MIRA, opposition in exile in London), took the opportunity to attack the regime.

In a lengthy press release, MIRA said that the figures announced by the government were "null and void." It denounced "the lack of transparency, while any verification (by an independent party) of these numbers is impossible, and the authorities who are imposing the greatest secrecy on economic data, including those related to income, expenditure and investments."

After engaging in complicated calculations on the basis of data obtained from its sources, MIRA concluded that government revenues in 2008 were of "at least 1650 SR billion - of which 1300 billion from oil sales - 550 billion more than the 1100 SR billion announced by the government."

"But the huge revenues recognized by the state will neither reduce unemployment, nor provide citizens a better standard of living and housing," stressed MIRA according to which "the problem is the lack of political participation, transparency and control (of the management of public Treasury). It is not enough to announce the figures."

Translated by Dr. Saad Guerraoui, a senior editor at Middle East Online


2. PM Departs For A Visit To Three Gulf Countries

PETALING JAYA, Jan 17 (Bernama) -- Prime Minister Datuk Seri Abdullah Ahmad Badawi today departed for an official visit to three Gulf countries.

The executive jet carrying Abdullah and wife Datin Seri Jeanne Abdullah took off from the air force base in Subang, here, at 12.55pm.

Abdullah will kick off the official visit in Bahrain tomorrow, followed by a two-day visit to Qatar and United Arab Emirates (UAE), in a move to further strengthen Malaysia's ties with these countries.

This is Abdullah's first visit to the three Gulf nations as prime minister.

Several cabinet ministers, senior government officials and corproate leaders accompanied Abdullah during the visit.

Abdullah was scheduled to visit several projects undertaken by Malaysian companies and also deliver keynote addresses at business forums in Bahrain and Qatar.

Among the major projects in Bahrain are the RM560 million Formula One racing circuit and the RM1.9 billion Bahrain City Centre project.

In Qatar, Malaysian companies are in the process of completing the construction of Doha's international airport valued at RM1.9 billion.

In UAE, the construction of the five towers project in Al Reem island, worth RM1.3 billion, is scheduled for completion in September.
-- BERNAMA


Penasihat Ekonomi Tok Arab dari Malaysia, sebenarnya! There he goes to save th day!

go!
go! go!
go Abdullah!
(mana inspektor gadget?)

Mika Angel-0 said...

Yang ini saya mesti kirimkan juga.
(it is a war, actually - an ongoing war till hell freezes over)

Hedge funds, unhinged
By Louise Story


Sunday, January 18, 2009
Last summer, Kenneth Griffin and his wife, Anne, hedge fund managers both, were so rich that they did something most wealthy couples don't do until much later in life.

Still in their 30s, they hired a Ph.D. student in economics to help dole out their money to charities.

Fast-forward six months, and Griffin, who built the Citadel Investment Group into one of the largest hedge funds in the world, has seen the value of his funds plunge by roughly $10 billion — one of the biggest amounts lost in the hedge fund carnage last year.

He was down 55 percent while the average fund was down 18 percent. For Griffin, it is a failing as personal as they come. Sitting back in his chair, gazing uneasily at the skyline here, he points to a new patch of gray hair when asked about the toll of his losses.

"Last year was a dramatic year for the world's largest financial institutions," he says. "We were not immune."

Griffin has basked in praise — whiz kid, wunderkind, the next Warren Buffett — ever since he began trading from his Harvard dorm room 20 years ago and then moved to Chicago to start his hedge fund. In recent years, his firm handily took in more than $1 billion annually.

But now, the whiz kid has lost so much money that it is unclear whether he can make it all back. That reality is playing out among thousands of troubled hedge funds drowning in losses.

Two out of three hedge funds lost money last year, and according to agreements with investors, their managers are supposed to recoup all losses before they start skimming fees from their profits again. That could take years.

And it's unclear whether these traders, so accustomed to flush times, will stick it out long enough to make investors whole again.

Their decisions will reverberate beyond Greenwich, Connecticut, the New York suburb that is a haven for hedge fund honchos. Pension funds, endowments and charities — not just wealthy individuals — all invest in hedge funds.

Assets held by hedge funds surged to nearly $2 trillion as of the start of last year, from $375 billion in 1998, according to estimates from Hedge Fund Research, a Chicago firm. Along the way, hedge funds — once so few in number that they represented a boutique industry populated by a rarefied group of specialists — sprang up like kudzu.

Today, there are around 10,000 hedge funds, compared with around 3,000 a decade ago and just a few hundred two decades ago.

Little other than money unites hedge funds, which invest in areas as varied as bonds, aircraft and small-business loans. They even make bets on the weather.

What they have in common are lucrative fees: managers typically charge 20 percent of profits and 2 percent of total funds under management — the latter of which they earn regardless of performance.

The wealth and power of hedge funds, and those handsome fees, were predicated on what now sounds like a hollow promise: to make money year in and year out.

But the years of easy money are over.

Banks, pinioned by their own enormous mistakes and the economic slump, have cut back on hedge fund lending — essentially turning off a financial spigot that the funds relied upon to goose their returns.

Economic uncertainty makes it harder to predict market movements. And investors, burned by big losses in 2008, are either questioning hedge fund fees or simply avoiding putting more money into the funds.

The regulatory vise, meanwhile, is tightening around an industry that long enjoyed the freedom to trade and operate without the constraints imposed on more traditional firms.

On Thursday, Mary Schapiro, Barack Obama's nominee to head the Securities and Exchange Commission, said during a confirmation hearing that she plans to more tightly regulate hedge funds as part of an effort to "bring transparency and accountability to all corners of the marketplace."

Lawmakers are already considering new taxes and regulations that would require hedge funds to disclose more information about their secretive trading strategies.

Add it all up, and managing a hedge fund looks much less attractive than it used to.

"The magnitude of this current crisis and its effect on their business was a real shock for hedge fund managers," said William Goetzmann, a professor who studies hedge funds at the Yale School of Management. "It will be a long-lasting effect because it's caused customers to question the basic model."

Griffin, fiercely competitive, says he is firmly in the camp of those trying to stay open. But he acknowledges that for several years, he will be working mostly for "psychic income."

NOT everyone is rooting for Citadel. Call up nearly any hedge fund manager, and you will hear the stories about Griffin, now 40, poaching workers, landing a trade on the cheap and stalking wounded peers for deals. Griffin declined to comment on such stories.

His aggression has earned him admirers but has also created enemies. In the low-profile hedge fund industry, people shuddered at his brash claims that Citadel would become as powerful as investment banks like Morgan Stanley and Goldman Sachs.

His firm has become the fortress that many would love to see broken. Griffin knows that, but he chalks it up to his success. "Over the last 10 years we have been innovative and bold," he says.

But in July, his magic touch deserted him. After reviewing the trading books at Kensington and Wellington, the two largest funds that Citadel manages, he decided to trim some holdings while bolstering an asset class he had traded since his early days: convertible bonds.

But the value of convertibles plummeted as banks, large issuers of such shares, went into a tailspin after the collapse of Lehman Brothers, the venerable investment bank.

Citadel made another large bet that the gap between corporate bonds and insurance bought on those bonds, known as credit-default swaps, would narrow. In essence, Griffin was betting that the economy would strengthen and that the price of insurance on debt would cheapen.

Others in the industry backed away from that particular gambit. Paul Touradji, who runs a fund associated with the veteran trader Julian Robertson, said his own digging indicated that more people would need to sell their bond positions than the number that were likely to buy in.

Still, Griffin stuck to his guns, even as his funds fell 16 percent in September. The loss put Citadel in the spotlight and generated speculation about its survival.

One day, the rumor was that Federal Reserve officials were trolling his Chicago headquarters; the next, that his funds were selling off troubled assets, or that banks were pulling credit. (Federal Reserve officials did in fact check up on Citadel. But since last spring, such inquiries have become routine at all large financial institutions. The other rumors were unfounded.)

Griffin says Citadel came under attack because it was a large and easy target — not because it was about to collapse.

By late October, Citadel was fighting for its life. At the end of the month, its funds were down an additional 20 percent and nearing 40 percent losses for the year. Griffin met with all of his employees and held a public conference call to reassure the world about Citadel's financial footing.

Griffin calls that period "surreal" but says he never went to bed worried that Lehman's fate would become his own. The difference with Citadel, Griffin says, is financing. He says he has arranged for credit lines at dozens of banks with durations as long as a year, buying him time. "Any firm that is a lasting, permanent institution goes through rough times," he says. "In three years, they'll write the story about how we came back, much like Goldman Sachs came back after 1929."

Citadel, in fact, is different from many hedge funds that specialize only in trading. Griffin reinvested profits over the years into new service-based businesses. The management company, which is controlled solely by Griffin, also owns a firm that provides administrative services to other hedge funds, as well as the Citadel Derivatives Group, a major player in the options and stock markets. And Citadel recently hired a former Merrill Lynch executive to build a capital markets business, a mainstay of investment banking.

"Citadel is a diverse platform," says Matt Andresen, who runs the Derivatives Group. "Our clients do not interact with the asset management side of the firm, and they've come to know us in an entirely different capacity."

Griffin has full discretion over how much money he uses to subsidize his struggling funds. Last year, Citadel shouldered some of the funds' operating costs, which are known to be among the largest in the industry.

At the same time, though, Citadel blocked investors in its two troubled hedge funds from withdrawing money at the end of last year. The company has told investors that they might be allowed to withdraw money at the end of March.

Griffin explains these decisions by saying that "it was the right thing to do," because withdrawals by some investors might have disadvantaged other investors who remained in the funds. Citadel also canceled its holiday gathering because it was not "right," he says, to celebrate last year.

But right and wrong in hedge fund land is a matter of debate. Industry veterans have been loudly criticizing fund managers who blocked investors from retrieving money. Leon Cooperman, for instance, who runs Omega Advisors, is suing another hedge fund, contending that it didn't allow him to make withdrawals; he said his own fund would never block redemptions.

"You'd have to lower me into the ground before I'd put up a gate," Cooperman says. "Clients deserve to be able to withdraw their money."

Orin Kramer, another hedge fund manager, who also helps oversee the New Jersey pension fund, says that what bothers him most is that managers who are freezing their funds are still charging 2 percent management fees on money they have trapped.

"It's like telling someone at a hotel that they can't check out and then charging them for the privilege of staying," Kramer says.

IN November, five of the country's richest hedge fund managers filed solemnly into a congressional hearing room to be grilled by lawmakers.

They made up a Who's Who of their industry. In addition to Griffin, the group included James Simons, of Renaissance Technologies; Philip Falcone, an activist investor who has bought a large stake in The New York Times; John Paulson, who earned billions of dollars betting against mortgages before the crisis; and George Soros, the Hungarian trader who rode to fame on prescient currency trades in the early 1990s.

Unlike banks or brokerages, hedge funds do not have to reveal information on their financial condition to the government. That means the government has no way to know the value of funds' assets, how much money they borrow, or even how many funds there are.

For years, the industry has argued that hedge funds should be allowed to operate under the radar because they serve sophisticated investors.

But by November, it had become apparent that too many hedge funds, crammed into too many of the same trades, had been forced to sell — and that they did not operate in some distant universe. Like mutual funds, they can roil the markets.

At the hearing, four of the managers surprised lawmakers and their peers by saying that more regulation of their business was needed.

Griffin was the lone holdout. He argued for private market solutions, but as the hearing proceeded, he conceded that he would "not be averse" to greater disclosure to the government, provided that it was not made public. He says now that he is working on providing more transparency to his investors.

Lawmakers proclaimed the day a victory.

"I believe there's been a near-consensus that hedge funds can cause systemic risk," said Representative Carolyn Maloney, a Democrat from New York and a member of the House Financial Services Committee.

Even without government intervention, the days of working behind a curtain may be ending. Investors are already demanding more information about hedge funds' operations.

Eiichiro Kuwana, president of Cook Pine Capital, a firm in Greenwich, Connecticut, that helps wealthy people invest in hedge funds, says that investors once had so much money to invest that they became less circumspect — with many of them investing in hedge funds that refused to provide much information.

No longer.

"Why would I trust a fund with my money if they won't trust me with information?" Kuwana says.

HEDGE FUNDS tend to close by choice; outright collapses are less common. Sometimes banks pull funds' credit lines and managers are forced to shut down. But by and large, the end comes when a manager no longer sees a financial upside for himself or herself.

Few funds have actually shut their doors. The number of funds peaked early last year at 10,233, according to Hedge Fund Research, and fell just 4 percent during the year. And they still manage $1.6 trillion.

Of the funds that lost money last year, the average loss was 29 percent, according to estimates from HedgeFund.net, a research firm. It will take a few years of fairly robust gains — no easy feat in these markets — for funds to simply recoup those losses.

Until then, managers would earn only their 2 percent fee, chump change to most hedge funds. Some managers are already paying talented employees out of their own pockets to persuade them to stay, but it's apparent that surviving this turbulence isn't in the cards for scores of funds.

Touradji of Touradji Capital was one of the few managers to make money last year, up 13 percent. He says that most firms that call themselves hedge funds never really deserved the title.

"There's any number of good violinists, but how many people are good enough to be considered to conduct the Philharmonic?" he says. "The whole concept of hedge funds was always and still is this very high bar, that you were never allowed to say it was a tough market. Come rain or shine, you were supposed to do well — even in tough markets."

But he predicts a slow death for the poseurs. Hedge fund managers, he says, may behave like restaurateurs who keep the doors open long after losses mount, largely because they don't want to work in someone else's kitchen.

For his part, Griffin is not likely to be job-hunting any time soon.

While there is no way to calculate his net worth, it is thought to be at least hundreds of millions of dollars. In May, a monument to his riches will be unveiled at the Art Institute of Chicago. He and his wife donated $19 million for Griffin Court, part of a new modern wing that connects the museum to Millennium Park. And they are hoping they will have plenty of money for their Ph.D. graduate to give out by 2010.

As for Griffin's troubled hedge funds, their survival will pivot on successful trading — they are up 6 percent this year — and on his willingness to use Citadel's other units as a safety net.

Whatever happens, Griffin says he can handle the shakeout in the hedge fund industry. "It's going to be fairly significant, " he says, then pauses and grins. "It's part of capitalism."

selongsong said...

Salam Tuan Ruhanie Ahmad,

Kenapakah tidak diberi Tengku Razaleigh untuk menjawat jawatan Menteri Kewangan? Bukankah "Penasihat" ini hanya meningkatkan perbelanjaan kerajaan?

wassalam

selongsong.pencucuh

Mika Angel-0 said...

Keep It Up-Dated, Mate!
First Published 2009-01-17
Arabs investors lost $2.5 trillion from credit crunch

Kuwait FM: 60% of development projects postponed or cancelled by GCC states due to global meltdown.

KUWAIT CITY - Arab investors have lost 2.5 trillion dollars from the credit crunch, Kuwaiti Foreign Minister Sheikh Mohammad al-Sabah, whose country hosts an Arab economic summit next week, said on Friday.

"The Arab world has lost 2.5 trillion dollars in the past four months" as a result of the global financial crisis, Sheikh Mohammad told a press conference following a joint meeting of Arab foreign and finance ministers in Kuwait.

He also said that about 60 percent of development projects "have either been postponed or cancelled" by the six-nation Gulf Cooperation Council (GCC) states because of the global meltdown.

Arab leaders who hold their first ever economic summit on January 19-20 will discuss the impact of the worldwide economic meltdown on the 22 Arab countries.

The biggest loss was an estimated 40 percent drop in the value of Arab investments abroad, which previously totalled around 2.5 trillion dollars.

Falls on stock markets contributed more than 600 billion dollars to the losses, while Arab investors were further affected by a sharp decline in oil revenues, the declining value of property investments and other repercussions of the global downturn.

Next week's summit will also discuss the Gaza war but leaders are still intent on agreeing a joint response to the financial crisis.

puteramaya said...

Sahabat-sahabat sekalian. Jutaan terima kasih. Saya pun pernah terfikir macam Selongsong, mengapa tak lantik Ku Li menteri kewangan?

- Salam takzim : Ruhanie Ahmad

zeme said...

Salam Datuk,

Saya tidak faham kenapa kita orang melayu suka menolak lagi menafikan golongan cerdik pandai untuk bersama-sama.

Pemikiran YBM Ku sememangnya dikagumi bukan sahaja dalam aspek global ekonomi malahan perencanaan dan perancangan yang kreatif menjangkau sebarangan bentuk langkah-langkah kemungkinan dalam pentadbiran pengurusan yang terurus.

Ekonomi dijadikan ibu landasan kekuatan bagi YBM Ku kepada keteguhan pentadbiran dan pengurusan yang ideal lagi terurus merangsang pelbagai aspek samada sosial, politik, budaya, pembangunan sahsiah dan ilmiah.

Saya berharap, YBM Ku diberikan peluang untuk turut serta dalam kabinet Malaysia merangsang pembangunan ekonomi negara setidak-tidaknya sebagai Menteri Kewangan meskipun sememangnya YBM Ku layak untuk memegang tampuk Perdana Menteri kerana pada masa kini Malaysia memerlukan seorang Perdana Menteri yang bergelar "Bapa Ekonomi Malaysia".

Wasalam.

Mika Angel-0 said...

so according to some maneen - Razaleigh anak kelatan gua musang ini orang cerdik pandai atau pada yang lain bekas orang cerdik pandai?

cerdik dia razaleigh itu kata orang macam musa hitam - atau saya salah? semangat 46 terkubur tanpa nisan...atau hantunya bermaharajalela dalam kerangka politk melayu tanhaair, zeme?