Tag Archives: Trade


Ahhh… this Pesek again.


Mr William Pesek is a Bloomberg View columnist based in Tokyo. He, as mentioned in his writing, unabashedly confessed to be one of the Anwar Ibrahim’s admirers.

That explained why he keeps questioning about the Opposition leader’s case in his articles without fail.

His assertion in his article ‘Is Malaysia Asia’s Weakest Link’ that “Malaysia is the riskiest country in Asia more so than India, Indonesia and Thailand” is worth studying. Is it true or is it fantasy?

In his article he wrote that Putrajaya’s one-party policy and its 40-year-old pro-Malay affirmative action programme will chip away the country’s competitiveness.

Never mind if Malaysia has been chalking up in global competitiveness rankings in the past few years. In IMD World Competitiveness Yearbook 2014, Malaysia is the 12th most competitive country in the world. ATC Kearney’s Washington DC ranked us at 15th in FDI Confidence Index.

These achievements have been reflected by the rising realised investment in Malaysia. Last year, total investment hit RM264.6 billion- a whopping 32% increase from 2010.

Malaysia's Realised Investment

Malaysia’s Realised Investment

Ironically, it was achieved in spite of the ’40-year-old-Malay-affirmative action programme’. How could this scheme, which supposedly disenfranchises Malaysia’s Chinese and Indian minorities could provide a competitive business environment for the private sector to thrive? Most importantly, not only we fared better than Indonesia or Thailand, we have ably overtaken developed economies such as Norway, South Korea and United Kingdom.

Pesek also criticised Malaysia for its high levels of public debt, rising external debt and shrinking current account surplus.

Admittedly Malaysia household debt is high at 87% of GDP. Is that worrying? It depends. While the household debt is high, our household asset has quadrupled. It has now stood at 322% of GDP. It means for every RM1 Malaysian borrow from the bank, they acquire asset worth RM4. [1]

In fact, Malaysia public debt is not hovering at all time high-as claimed by Pesek. In 1990, our public debt to GDP ratio stood at 81%. But today it is about 52.2% of GDP.

Pesek has pointed out Malaysia’s current-account surplus is dwindling, from 16 percent of GDP in 2008 to 3.7 percent last year. But again, he cherry-picked facts. He should mention most of the developed and developing economies have seen their current account decreased. Only the oil-rich countries like Kuwait, Brunei, UAE,Saudi and Qatar have the luxury to have 20-30% surplus. The rest? They have to stimulate the economy through spending.

Even so, our trade surpluses will help in improving current account balance. As for today, Malaysia has international reserves of RM427 billion. It is 1.3 times sufficient to pay our short term external debt.

Well, that is Malaysia. How about other Asia countries?

Indonesia’s deficit is worsening. After 14 years of surplus, the current-account balance swung to a deficit of 4.4%.. A coup-ridden Thailand is even worse. The last time Thailand had a coup, the stock market crashed. Singapore’s indebtedness has swelled to the most in Asia after China and India.

Against this backdrop, why Pesek believes Malaysia is Asia’s weakest link? Maybe it is safe for him to impute all kinds of mismanagement by the Malaysia Government. After all, he concluded that as Indians just elected the reform-minded Narendra Modi, Malaysia may send his darling to go back in jail as he believes Malaysia’s Prime Minister is clinging to power.

Very telling, indeed.


[1] As explained by @EkonomiUmno in twitter

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