Stronger = good ?

So our currency is at its highest against the US dollar eh? Is that a good news? Personally I don't think so.. cos it is just a prelude to more price hikes in the (near) future.. Why, you might asked? Well, here are some of my not-economics-centric views..

If our currency is high against the US dollar, that means

• Other countries would need to PAY MORE if they want to buy our exports. Is that a good thing for a country that depends on the exports of its agricultural and oil produce, and low-technology products? With so many other countries able to supply these same products at a lower price (due to weaker currency), will any country want to buy from us?? One huge reason why China has kept its RMB low...


• Foreign companies would need to INVEST MORE if they want to build their factories or set-up branches in the country. Is that a good thing for a country which has been consistently "chasing away" its talents, losing its competitiveness to neighboring countries? Is that a good thing for a country that is obsessed about setting a minimum wage but never thought about ways to raise its productivity?


• Citizens will be tempted to SPEND MORE especially traveling overseas since MYR$1 can buy so much more now. There is no denying that, but is it healthy? The same MYR$1 can't get you a decent meal in the country, but in countries like Vietnam, Cambodia or India, you might be spoiled for choices. But that is MYR$1 going OUT of the country! Conversely, tourists from other countries might not consider coming here to spend their tourist dollars based on the same logic!


• Corrupted officials will be GETTING MORE for the same amount when they siphon money out of the country... Imagine, one year ago, MYR$1 million would only get them USD$280,000, but now, the same amount would get them USD$320,000!! USD$40,000 more!! Almost 15% increase!! So who won't want to fleece MORE money out of the country??!


• We should be PAYING LESS for our imports since our currency is strong. That will only encourage irresponsible spending that we cannot afford. Even when we are paying less for our imports (theoretically), the government is still cutting subsidies and asking the people to pay more.. so where are all the money?? There should be some savings since we don't have to pay so much for our imports!


• Government should be SPENDING LESS on infrastructure projects since raw materials and manpower should be cheaper. Yet, it is throwing a couple of hundred millions here, a few billions there.. There is no review in project tender prices since suppliers should be able to pass these savings back to the government. The government will only GIVE MORE money to the supplier if the budget overruns, but never GET ANY money back when there are savings. Who is the government answering to??? The citizens or those huge conglomerates???

There is NO BASIS for our currency to be so strong against the US dollar. Whatever we produce or export, other countries can produce or export at a cheaper price. Ours might be of better quality but countries will be willing to give a chance to these cheaper alternatives.. Do we have any world renown high-tech industries? or any high-value exports? We were one of the 4 Asian Tigers in the 1980s, but where are we now?? GDP (PPP) per capita for Singapore in 2009 is $50,523, Hong Kong $42,748 and Taiwan $31,834. And Malaysia? $13,769, lower than Gabon and Libya!!

Our FDI is shrinking when our neighbors are all having very healthy FDI figures. The senior politician who said that our FDI suffered cos of the economy crisis should just kept his mouth shut or admit that he IS indeed senile. MORE Money is flowing OUT of the country than it is flowing IN. It doesn't take a genius to see that the country is going to be "empty" in no time!!

So mark my words, the government will cut more subsidies after next month's Hari Raya Puasa.. After all the rosy economic picture the government has painted, when it comes to cutting subsidies, they will try to scare the people into submitting to the "inevitable". Yet the inevitable is that this country is going down to the dogs as they have plundered the country clean.. So better start stocking up on cooking oil/rice/whatever that has yet to have its price risen the last time.. This government is trying to get as much $$$ as possible from the people before the next election cos they might not have the chance after that...