DEWAN DISPATCHES: Scary economic words to stay clear in staving off the recession
By : Azmi AnsharDEWAN RAKYAT Nov 18, 2008:
Before the global recession infects Malaysia’s briskly paced economy sometime between April and September next year (according to the Malaysian Institute of Economic Research’s gloomy prediction) and grind growth to a heaving halt (that’s absolute zero to minus zero for us all), the authorities have devised various programmes to circumvent the possibility of an economic battering.
So, it needs to be blared all over the country: Malaysia is NOT in a recession. The Deputy Finance Minister said so today in the Dewan Rakyat, bolstered by Government statistics that GDP growth last year was 6.3 per cent while in the first quarter of 2008, a smart 7.1 per cent expansion was registered, followed by a healthy 6.3 per cent augmentation in the second quarter.
The Finance Minister was more upbeat last week: After outmanoeuvring the Opposition in trumping the RM7 billion stimulus package as an add-on to Budget 2009, Datuk Seri Najib Razak shrugged off the European banking giant UBS’ forecast that Malaysia would experience zero growth next year and heartily disagreed with MIER’s projection of a recession.
Najib demonstrated gutsy stance in dismissing UBS as “not infallible”, citing them as failing to predict the US sub-prime and banking meltdowns. His cojones to go ahead with his programme is the antidote needed in a high-anxiety economic climate. But as upbeat as he was, Najib still exuded caution, pointing out that the plan will work if “nothing extraordinary” strikes the external economy even as the Government was confident that the 3.5 per cent growth target was attainable with the stimulus package.
Granted, stimulus package to spur customer confidence and spending won’t be the one-size-fits-all solution to buttress economic preservation. Some of the execution that the Finance Minister needs to check would include solidifying intra-agency cooperation and cut down turf wars, prod producers/manufacturers to make stuff with quality that’s beyond reproach, market the goods according to revolutionary techniques not taught in business schools and yet spread virally and the clincher, guarantee after-sales services that would compel clients to take you home to mum for a private dinner.
However, you get a feeling that all that is possibly being conceived to stave off the recession is somewhat insufficient. There is the matter of the words politicians, economists, bankers, financiers and money lenders utter or advocate in times of trouble that should never be thought, written or spoken out loud, in the media – scary, frightening economic or economic-related words.
How are such words scary? Here are some “gory” examples: belt-tightening, shelving, prudent, cost-cutting, increased savings, interest rates hike, save for rainy day, high unemployment, banks stop lending, austerity drive, cost-conscious, cutback, stretch ringgit, thrifty.
Every one of these words has a debilitating connotation when used in the right context. “Belt tightening”, “prudent”, “cost-conscious”, “cutback” and “thrifty”, for instance, are words loathed intensely by retailers in hypermarkets, spanking new mega shopping centres and specialists. These troubling words mean consumer cut back on their spending and there goes the bottom line.
“Interest rate hike” means harder loans to borrow by frantic entrepreneurs needing that bridging finance to shoo away the loan sharks, while “shelving” and “austerity drive” is felt like twin taboos in Penang, where the Pakatan Rakyat State Government is desperate for federal funds to kick-start several mega projects to swing the state economy on an upsurge scale.
Yes, they are everyday, mundane words spouted unsparingly, unwittingly and unkindly by ignorant powers-that-be and too-smart-for-their-own-good politicians and consumer advocates as they pass off these words as wisdom, practical advice and useful tips. Before a recession, such words merely irritate but during a recession, it is downright frightening.
The thrust of these words are often simple but fearsomely impactful: it effectively tells consumers, spenders and buyers to lay off or at least cut down (another scary word) the basic, instinctive urge to buy, purchase and acquire material things and services that you take for granted when times are good although in bad times, the inherent argument is that you must continue spending as much as you can. Or everything will go bust! Remember your mum or dad’s sage advice on your spending habits? Save for a rainy day. There is a Malay proverb “prepare an umbrella before the thunderstorm.” It all harks back to your spending habits or the profligate part of it.
Sarah Palin spent more than US$150,000 on luxury clothes for herself and her family as part of her official apparel to look presentable for her US vice-presidential campaign, doomed from the start after it was established that she could not resist her stupefying campaigning ways. The US electorate, on a pro-Barack Obama bent anyway, detested her spending spree but that’s not the point. Because of Sarah Palin, retailers survived cash flow problems, their shops continue to survive the bitter economic onslaught and inspired others like to do the same, and hence the rippling effect it had on the economy, no matter how small and underwhelming on the whole.
Malaysians of the spending type: be wary of politicians, eager-beaver consumerists and parents who warn you incessantly to tighten your belt and be prudent in your spending. The advice will, inadvertently, ruin the economy or dampen it badly enough to be unable to recover when the global upswing recoils positively. Stick with your financial gut instincts. Think like the Finance Minister.
Why do you think the RM7 billion stimulus package is for? Why do you think the EPF has subtly reduced the percentage they cut from your wages? So that you can continue your binge on wine, women, song, food, clothes, shelter, and all the necessary things in life that is not necessarily good for you but for the sake of the economy, it’s good for everyone.
If you are Mr Big Spender or anything like Carrie Bradshaw of Sex and the City, keep on spending…normally. Don’t keep your money in the bank, don’t stuff it in the piggy-bank or slip it under the mattress. SPEND the money but spend it in the way that still leaves you enough to continue binging the next day or the next week, or the next month until your next salary kicks in.
Remember, your local retailer, trader, merchant, sundry shopkeeper, stalls and peddlers depend despairingly on your profligacy, only if it means surviving until the next quarter. Their families, groupies, hangers-on and freeloaders would also depend, on their knees praying, on you too.
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