THE latest World Bank report shows that Malaysia’s economy is growing weaker. Out of the 15 Asian economies analysed in the report, Malaysia and a few others are the only ones expected to worsen. The World Bank forecasts that under current conditions, in 2018, Malaysia’s growth rate will lower to 5% and in 2019, decrease further to 4.8%. There are less than three months to go until 2018.
As the new World Bank report describes Malaysia’s economy: “The main risks to growth arise from the policy uncertainty in the major economies, geopolitical developments and commodity price volatility.”
While most Asian economies are rising, Malaysia’s is in decline, because it has not adapted to both global and domestic economic conditions.
The report also singled out Malaysia as one of only two Asian economies where household debt “exceeds 70% of GDP”. Many economists have concluded that Malaysia’s debt bubble is about to explode.
As others have correctly noted, the gross domestic product numbers and global economic rankings with which Najib is obsessed haven’t benefited Malaysians.
As the World Bank country manager for Malaysia Farid Hadad-Zervos recently warned: “This is the fundamental question: what does GDP really mean in the daily life of Malaysians?”
During his failed US visit, Najib said Malaysia’s 5.2% growth is “the envy of advanced economies”. To which everyone should immediately respond: “Iraq had 11% growth, Bangladesh had 7.1% growth and Ethiopia had 7.6% growth last year – should they be the envy of the advanced economies, too?”
Instead, Malaysia is falling behind its Asian neighbours.
As Bloomberg reported last month, Indonesians and Thais are the world’s top 10 populations where the highest numbers of millionaires are being created, increasing by 13.7% and 12.7% respectively.
Unlike its Asian neighbours, Malaysia still has not entered either the G20 or the trillion-dollar GDP club (Barisan Nasional’s latest target is a trillion ringgit).
According to the United Nations, today the Malaysian youth unemployment rate has skyrocketed to 12.1% and rising – approximately quadruple the national unemployment rate. A recent Bank Negara survey showed that three out of four Malaysians find it difficult to raise even RM1,000 in an emergency.
Najib is notorious for falsifying economic data in his speeches, selectively quoting reports, omitting bad economic news, and twisting the complete economic portrait of Malaysia, because he is politically unstable.
In the recent best-seller The Rise and Fall of Nations, the author describes a particularly hilarious but disturbing story about Najib’s inability to understand the Malaysian economy:
“On a visit to New York in October 2015, one of my colleagues asked (Najib) whether the collapse of the value of the ringgit is offering any boost to the nation’s embattled manufacturing sector. He answered by missing the point, saying the cheap ringgit is great for tourism, which can be an important contributor to growth in a country as large as Malaysia. Pressed on the manufacturing question, Najib seemed at a loss. An aide in the back of the room pitched in to help, but spoke about investing in oil and other raw materials. The crowd left with the impression that Malaysia is missing an opportunity, because the cheap currency coupled with the right reforms could supercharge Malaysian manufacturing.”
All Malaysians should read the new World Bank report to draw their own conclusions about whether Barisan Nasional is missing additional opportunities for growth – or whether it’s more focused on protecting the elite few.