Malaysia is one of the most subsidised nations in the world. Its total subsidy of RM74 billion in 2009 is equivalent to RM12,900 per household or 4.6 per cent of GDP even higher than Indonesia (2.7 per cent) & Philippines (0.2 per cent).
Due to high subsidies, Malaysia’s fiscal deficit stood at 7% of GDP or RM42 billion in 2009. Malaysia will be bankrupt by 2019 as total debt would soar to a RM1.16 trillion if we do not cut subsidies now.
Below are the breakdown of 2009 subsidies,
- RM 30.8 billion – Primary, secondary, higher education and scholarships.
- RM 22.9 billion – Medical services, petrol, toll, foodstuff (paddy, sugar, cooking oil)
- RM 18.0 billion – Gas subsidy for power and non-power sector, prefential interest rate.
- RM 2.3 billion – Welfare aid for poor, farmers, fisherman and disable.
Prime Minister’s Department’s Performance Management and Delivery Unit (Pemandu) was giving the task to come out with the plan to rationalise the country’s subsidy scheme.
A nationwide SMS survey conducted by Pemandu found 61% of respondents agreeing to the subsidy rationalisation initiative, with the majority preferring for it to be phased out over three to five years.
Below are some of the recommendations on subsidies that are to be removed.
Since it was formed 10 years ago, Euro has become a solid currency. However, things are going on the opposite way in the last few weeks. It start with Greece where their budget deficit reach more than 12%.
The problem seem to be cantagion to PIIGS country (Portugal, Italy, Ireland, Greece and Spain). Germany, European Union strongest economy seem not willing to help out what they see as a bunch of Mediterranean layabouts.
New York-based investment bank Morgan Stanley is among those saying the possibility of a euro collapse has to be considered. So, if the euro might not be around in 2020, here are seven trades to start thinking about.
Previously, we look at how does one trillion dollars look like. Yes, one trillion dollars in cash is really massive amount to keep. Now, I am going to show you 100 times more, a 100 trillion dollars. Can you imagine how its going to look?
Read more to find out.
Baltic Dry Index (BDI) or also known as the “Dry Bulk Index” is a shipping and trade index created by the Baltic Exchange which is based in London. BDI is a daily average of prices to transport raw materials such as cements, fuels, grains and metals across the sea.
The Baltic Exchange, global marketplace for brokering shipping contracts, will directly contacts the shipping brokers to assess the price levels for a given route, product to transport and time to delivery (speed). The index is quoted every working day at 1300hr London time.
Previously, we look at the Worst Hyperinflations in World History. Recently, I came across with a nice cartoons about hyperinflation from Duck Tales episode called Dough Ray Me.
This is the short synopsis about this episode.
Dough Ray Me, was the 82nd episode of Duck tales. It was first aired on the 3rd November 1989.
In this episode, the inventor Gyro creates a multiphonic duplicator. This device is capable of making exact copies of any objects. Huey, Duey and Louie play with the device and later on start duplicating money. Things go terribly wrong when the duplicated money begins to spontaneously duplicate on its own. Duckburg is quickly over run with duplicated money, causing prices to skyrocket or in other word hyperinflation.
What happen when hyperinflation occur and how do they solve the problem?