MALAYSIA’S INCOME

HIGH INCOME FOR MALAYSIANS LIKELY BEFORE 2020

The ETP report pointed out that the country's investment as a whole grew by 19.9 per cent in 2012.

AsiaOne, March 20, 2013

PETALING JAYA, Malaysia - Malaysia has the potential to achieve a per capita Gross National Income (GNI) of US$15,000 (S$19,002) earlier than the targeted 2020, based on current projects and barring unforeseen circumstances.

With a robust economic growth surpassing both Gross Domestic Product (GDP) and GNI targets last year, the Government also recorded its highest ever revenue last year, estimated at about RM207bil.

The newly released Economic Transforma­tion Programme (ETP) annual report for 2012 said the country's GNI had risen to US$9,970 (RM31,131) last year from US$6,700 (RM20,920) in 2009, a 48.8 per cent jump in just a period of two years.

Private investments, it said, had also surpassed its 2012 target by 9.1 per cent to reach RM139.5bil, driven by high capital expenditure in the manufacturing, services and mining sectors.

Since the start of the ETP, Malaysia's private investment had tripled to a 22 per cent growth last year as compared to 12.2 per cent in 2011 and an average of 6.7 per cent between 2000 and 2010.

Against the backdrop of a sluggish global economy due to the Eurozone crisis and concerns of fiscal policy reforms in the United States, the Malaysian economy has displayed resilience, buoyed by a robust investment pipeline and expansion in domestic consumption.

(...) [article here]

A CURRENCY WAR IN ASIA?

IS A CURRENCY WAR COMING?

Andrew Sheng

The Star Online, February 2, 2013

WHEN Shinzo Abe became Japanese Prime Minister on Boxing Day last year, he promised to deliver change.

Very shortly, he announced a 10.3 trillion yen (US$116bil or 2.2% of GDP) stimulus package to end deflation and pressured the Bank of Japan (BOJ) to adopt a 2% inflation target. As a result, the stock market index Nikkei jumped 28.3% from mid-November to current levels and the yen weakened by 20.1% from 75.7 to 90.9, its lowest level in over two years.

Such action has already provoked muttering about another currency war, invoked by Russian, German and South Korean officials.

Are we moving from a trade war to a currency war? Not yet.

Firstly, the global imbalance is already ameliorating, with the Japanese current account surplus declining sharply due to rising oil import costs. Secondly, all reserve currency central banks (European Central Bank, Fed, Bank of England and BOJ) claim they only have inflation targeting, rather than exchange-rate targeting. In other words, currency rates are a consequence of the monetary policy, not a target. And we all know that if everyone devalues at the same time, there is no advantage to any single country. Since the world moved off the gold standard in 1971, everyone is aware that competitive devaluation ends up with no winners.

[article here]

INDIA AND ASEAN DISPUTES WITH CHINA

A GOLDEN OPPORTUNITY FOR INDIA TO LEAD

Umesh Pandey

The Bangkok Post, December 24, 2012

The gathering of Asean leaders in New Delhi late last week was unprecedented in the history of India and the 10-member Southeast Asian grouping, and marks a new beginning to a relationship that could be crucial for the development of the two regions.

The heads of government were in the Indian capital to commemorate the 20th anniversary of engagement by once-introverted India with Asean. The timing and location were significant given the backdrop of rising tensions between various Asean members and China and between India and China.

The disputes in the South China Sea have been amply documented. Vietnam, the Philippines, Malaysia, Brunei and Indonesia all have claims that overlap those of China, and sometimes those of each other as well.

India and China have had border issues for decades, and lately Delhi has grown extremely wary of the growing might of the world’s second largest economy. The last straw came with the issuance this year of new Chinese passports with maps showing parts of northeastern India as Chinese territory.

In this respect New Delhi was not alone, as the ambitious Chinese mapmakers also managed to anger the Philippines, Vietnam, Taiwan and possibly others.

Therefore, the meeting last week took on added significance. Many heads of government held bilateral talks with the Indian leaders, and expectations are that the two sides discussed ways to increase bilateral and multilateral cooperation, apart from raising the issue of the rising power of China.

In fairness, China has seldom been the aggressor and even in the 1962 war with India, which by the way India lost, China withdrew its forces from Indian territory. But that was then — China at the time was still not rich enough to support an all-out campaign of aggression against a large neighbour, while today things are very different.

China has the world’s largest foreign-exchange reserves, estimated at $3.3 trillion. It is the darling of all investors (except perhaps the Japanese lately), and has been spending heavily on upgrading its military power over the past decade. To top this off, nationalist propaganda has been on the rise, something that was very much evident from the protests and boycotts of Japanese products over the disputed Senkaku islands, which China refers to as the Diaoyu chain.

(...) [article here]