The poor performance points to more difficult times ahead for many industry sectors including property, which will be in for a few more lacklustre quarters.
This shows that the magnitude of the problems plaguing the global economy is very severe and things certainly don’t look good for corporate earnings.
Much of the excesses and incompetencies that plunged many of the developed economies into one of their worst recessions since the Great Depression are still unresolved, and these will need much more effort and time to be addressed.
Far from what some pundits would like us to believe, a bottoming out of the world’s economy is still nowhere in sight, much less a recovery.
It is best to face the wrath of the global financial meltdown by getting to the bottom of the problem and repairing the weaknesses rather than see any positive sign as a “green shoot” that the government measures are working well.
Although Malaysia has been lucky so far and spared from a much more severe hit suffered by other countries, there is a need to strengthen its economic structure and move into higher value adding activities.
The Government’s initiatives to liberalise the economy are a good start and these should be followed by a more enabling environment to promote greater income earning opportunities and allow wages to catch up with those in other countries.
Even in the lower economic activities, such as waitressing in the food and beverage (F&B) sector, there are opportunities for higher value activities to be introduced.
It is necessary to employ more Malaysians instead of unskilled foreigners in a broad spectrum of economic sectors, including the F&B and factory production lines, as they are better educated and require less training.
Rather than keeping wages low by employing foreigners, it is necessary to allow wages to rise and catch up with those in other neighbouring countries. Malaysians are drawing much lower wages compared with their counterparts in Singapore and even Thailand.
Doing so will also prevent large amount of money from being repatriated to the other foreign countries that these workers come from and ensure higher domestic consumption for more sustainable economic growth.
Meanwhile, in the property sector, more liberalising measures are also needed for industry players to get back on their feet after being pulled down by the global economic crisis.
Currently the Government has made it mandatory for developers to build low-cost housing, which industry players lament are dragging them down further especially during the current tough market conditions.
It is worth looking at setting up a statutory body that will function as a public housing board to undertake an indepth master plan of all the low-cost or public housing needs in the country and build enough such units to meet demand.
The Government’s initiatives to allocate most of the RM1.4bil for Syarikat Perumahan Negara Sdn Bhd (SPNB), the housing unit of the Ministry of Finance, to deliver some 32,000 low-cost homes in Malaysia through various housing programmes under the two economic stimulus packages is a good start.
If the initiative is taken further and develop into a long-term national housing programme, it will ensure a more orderly development of low-cost housing for all needy Malaysians to own homes.
To further the housing cause, a good model to study is Singapore’s Housing Development Board, which is responsible for the planning and building of all public housing needs in the city state. Its ability to build high-quality public housing, complete with good community amenities at affordable prices, must be one of the best in the world.
·Deputy news editor Angie Ng believes that upgrading the country’s economic structure into a high value add and earnings economy will prepare it for a more competitive global environment after the crisis.
By The Star (by Angie Ng)
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