On 2nd March 2024 ringgit hit 0.21 to the USD and 0.28 to Singapore dollar, thus dropping 31% for the last 10 years. What it all indicates to a laymen on the economy? It is blatantly and glaringly says our economy is unhealthy, though we may claim that other country's currencies in the region are also dropping, so no issue. We cannot compare other economies to Malaysia as fundamentals of each economies are different. So, they know how to tinker and tweet their economies accordingly, to bring back their economies to health. Malaysia as a trading nation has its own advantages and disadvantages.
The question asked is what are we doing in terms of policy measures and other economically reliable measures? We cannot send good news for the market to react, thus hoping the ringgit to appreciate! Recently we heard PMX announcement of investment RM329. 5 billion for 2023 which is 23.0 per cent higher than in 2022, and is reported to be the highest approved investments in the country's history, but unfortunately the Malaysian ringgit did not react as expected to this announcement. So the market is expecting news which is real and genuine, mean to say the 329.5 billion should not be mere MOU but investment which is 100% definitely coming into the country, no two ways about it.
Productivity
As laymen economist what we expect is the productivity of the country to increase by leaps and bound. In other words, we need to create products and services of par excellence which creates demand for such products and services all over the world, which will create the demand for ringgit. The core approach lies in it, though it is challenging but need to be our long term goals. "Definition of development is that a process of unfolding as a flower from a bud. In harmony with this definition, human social economic development fundamentally means a growth process which enables people and societies to realize their full potential”. (“New Approaches to Development: Building a Just World”)
Once this jump starts, the other positive activities will have domino effect. The companies will make more profit, mean able to pay higher dividends to the stakeholders which in return will generate more money and the money circulation locally accelerates.
Goods and services bought by individual citizens and corporations must be utilised to generate income. Individual citizens purchasing should not only be for glittering but to create and generate income. Likewise the good and services created by corporations must be in demand. If this happens the interest rate will go up which will affect the appreciation of ringgit.
......." carry forward the various branches of knowledge, be active and progressive in the field of inventions and the arts. Endeavour to rectify the conduct of men, and seek to excel the whole world in moral character. While the children are yet in their infancy feed them from the breast of heavenly grace, foster them in the cradle of all excellence, rear them in the embrace of bounty. Give them the advantage of every useful kind of knowledge. Let them share in every new and rare and wondrous craft and art. Bring them up to work and strive, and accustom them to hardship. Teach them to dedicate their lives to matters of great import, and inspire them to undertake studies that will benefit mankind." – Selections from the Writings of Abdu’l-Baha, p. 129.
Essential goods must be produced for local consumption not to be imported
Billion of ringgit are spent on importing foods and other related products which allow ringgit to depreciate. Buy local products must be the mantras in thoughts and action. We must produce goods and services locally, right from agricultural products and other products and services which must be consumed locally. Our production and consumption of giffen products and services must be accelerated. Local students must attend institutions of higher learnings locally, halting money flow out of the country. In short all activities big or small must not allow the ringgit to depreciate. Brains of excellence must create branded products and services which will create demand all over the world.
.."mendicity should not only be discouraged but entirely wiped out from the face of society. It is the duty of those who are in charge of the organization of society to give every individual the opportunity of acquiring the necessary talent in some kind of profession, and also the means of utilizing such a talent, both for its own sake and for the sake of earning the means of his livelihood. Every individual, no matter how handicapped and limited he may be, is under the obligation of engaging in some work or profession, for work, specially when performed in the spirit of service".. Shogi Effendi
Tourism must be accelerated to all time high
Tourism is the third biggest contributor to Malaysia's GDP, after manufacturing and commodities (Hirschmann, 2020). The tourism industry in Malaysia is the second largest source income from foreign exchange and affects the economy positively thus the Malaysian currency. Tourism creates not only many job opportunities but contributed 14% to the country's gross domestic product in 2022, according to Bank Negara Malaysia. The government need to focus on tourism to create all the facilities in term of hotel and the others enticement which attract tourists to Malaysia as the first destination of their choice.
Printing of fiat currency must be controlled
Lastly not least printing of fiat currencies has increased for the last 50 years which have brought about debasement and inflation of the currencies.
"Since 1970, we’ve gone from having RM4.1 billion in circulation to RM2.4 trillion now. This is an eye-watering 580-times increase in money supply in the span of 54 years.That comes up to an average of about a 10% increase in money supply every year. This means our base annual inflation rate, excluding any extenuating factors that might cause the prices of goods and services to increase, is 10%.
This means if you had RM100,000 ten years ago, that money can only buy RM38,500 worth of goods in real terms today. Almost two thirds of your money has been wiped out in a mere 10 years"
Other factor which affects currency depreciation
- Political uncertainties which is going on, non-stop must ease
- Corruption is no number one enemy of the country and we are always famous for wrong reasons
- Monetary policies on interest rate regulated by Bank Negara must harmonize with other economic entities
- Fizical policies by government must be managed well without leakage by corruption
- Taxation by the govrnment must not be on adhoc basis with clear direction which is sustainable and comprehensive
Conclusion
In a nutshell, each citizen has a role to play. Race and religion of segregation or preferences will not solve issues of economy but only accentuate or spirals negatively effect. We must stand together to become productive citizens not on crutches all the time as this brings about leakage of money spent for unproductive purposes. Though the weak and needy must be protected and assisted but must be deminish with time. All the time we cannot give fish away and make citizens dependent but the dependents of one generation must become productive in the following generation. 'In everything we do, we should always try to attain a standard of excellence. So high must be your standard of excellence and so pure and chaste your lives that the moral influence you exert penetrates the consciousness" Universal House of Justice.
Economic at the moment do not work or function according to religious principles as we have not reach high level of unity of countries globally but only superfically. The oneness of mankind which will propels towards a divine economy is the divine elixir which will sooner or later arrive inevitably by design and by default to perfection, currently only glimmering hope. Country's economic dynamic are still competitive and aggressive only to oppress, suppress other economies to survive.
The principle of create and destroy, by increasing the arm manufacturing is thriving in the first world countries as a economic booster. So a united world to bring peace and prosperity is pipe dream. Only when leaders of each country think and act sincerely regarding the welfare of it's citizen, not through political lenses all the time, will bring peace, unity and prosperity to countries and the world. We should not create discriminatory policies to leave other in destitute. ….all the members of the body politic shall be given the greatest achievements of the world of humanity. Each one shall have the utmost welfare and well-being. … This system is all thus ordered so that in the village the very poor will be comfortable, the orphans will live happily and well; in a word, no one will be left destitute. All the individual members of the body politic will thus live comfortably and well. – The Promulgation of Universal Peace, p. 312
K.T.Maran
Social, environmental and Animal Activist
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