Author: Frank_omatic

The twists and turns of ringgit policyAll agree that when change happens on the exchange rate front, it will be unexpected
By S JAYASANKARAN IN KUALA LUMPUR
Published December 13, 2004
___________________________________________
On the whole, a cheap, and pegged, ringgit…keeps the system stable
and gives Malaysian exporters an enhanced competitiveness that’s been
translated into eight straight years of balance of payment surpluses.
___________________________________________
HOW things change.
Way back in the late 1980s then finance minister, Daim Zainuddin once
commented acidly on Malaysia’s management of its foreign reserves in
the early 1980s. Then, apparently, the central bank, prodded by finance minister Tengku Razaleigh Hamzah, spent billions of ringgit to keep Malaysia’s currency on par with the Singapore dollar for, presumably, reasons of machismo.
Now the ringgit is at 2.3 odd units to its Singaporean counterpart and 3.80 to the greenback – from 2.50 for the longest time – and nobody, least of all the central bank or the finance minister, seems to think it’s demeaning or that it’s been debased.
Actually, it has. Just ask all the tens of thousands of parents with
children studying overseas: the Malaysians who travel abroad; the
importers who have to buy stuff from other countries. But the whole is greater than the sum of its parts and, on the whole, a cheap, and pegged, ringgit suits the central bank just fine. It keeps the system stable and gives Malaysian exporters an enhanced competitiveness that’s been translated into eight straight years of balance of payment surpluses.
Those surpluses, according to strict economic theory,indicate that the
ringgit’s value is prima facie misaligned, that it is somehow undervalued against the currencies of its major trading partners. But economic theory,as Henry Ford might have said, is mostly bunk.
Don’t expect any sort of realignment of the ringgit any time soon.
First, never mind all those economists saying that the ringgit may be
20-30 per cent undervalued against the major currencies. On the contrary, sneer at them. On a real effective exchange rate basis, the central bank estimates that it’s only about 3 per cent out of kilter. JP Morgan thinks it’s about 7 per cent undervalued but that’s hardly 20 per cent.
Second, the central bank doesn’t break a sweat sterilising all the
foreign exchange inflows from foreign traders and fund managers long on the ringgit.
Sterilisation occurs when the central bank reborrows ringgit from the
banks – which sell the foreign exchange it gets from said traders and
fund managers back to Bank Negara – to prevent disruptions to Malaysia’s money supply.
Now that can be a costly business. Not for Bank Negara. It pays 2.7 per cent on the ringgit it borrows from the banking system but can earn as much as 4 per cent on its US$61 billion in reserves if it invests in long-dated US Treasuries.
Private economists estimate that the central bank sterilised more than RM130 billion (S$56.7 billion) as at end-November but that’s no big deal for any central bank having reserves of more than RM220 billion.
Third, inflation isn’t an immediate threat despite high commodity price pressures. That isn’t really because of careful planning, it’s more like a fortuitous consequence stemming from a contraction in fiscal spending. That deflationary shock to demand helps even out imported inflation and puts no pressure on Bank Negara to begin thinking about things like exchange rate revaluation.
Finally, Malaysia’s electronics exports have been sliding. It’s
reflected in statistics that show that the country’s share of Asia’s electronics exports is expected to fall to 13 per cent this year compared to almost 20 per cent in 1999.
From a central bank perspective, that’s a compelling reason to keep
hanging on to the US dollar’s secular decline, to stay extra-competitive.
The peg will go someday but it will be later rather than sooner. It’s
not all good either. It detracts from bestowing the benefits of greater policy flexibility to government and it could be hurting investment.
The data isn’t clear on this but some private economists contend that
investors could be delaying plant and machinery upgrades because of its increased costs stemming from the appreciation of the Euro and the yen. What is clear is that gross fixed investment is down nearly 30 per cent from its peak in 1997.
The only thing everyone is sure of is that when change happens on the
exchange rate front, it will be unexpected. This was epitomised in
August 1998 when the government issued its National Economic Recovery Plan. There it dismissed any notions of fixed exchange rates.
A month later, Dr Mahathir Mohamad changed the rules.

I remember when i was in primary school. Maybank sent representative to my school to encourage the primary school students to save. The slogan the bank used at that time was “Sikit sikit lama lama jadi bukit” (Save bit bit, it will become a hill eventually). I opened a bank account with them, thinking that i might be rich if keep up the habit. But now the bank who taught me the value of saving has turn their back on me. They started to charge me for all their services, for no fucking reason. To get a clearer view of the whole issue, Claudia Theophilus wrote an article in Malaysiakini
———————————————————————-
The Domestic Trade and Consumer Affairs Ministry wants banks to furnish it with details of the service charges they are currently imposing on customers. Deputy Minister S Veerasingam said the ministry had made the request to all the banks two months ago following numerous complaints about the increasing number of charges that were being imposed for various online as well as over-the-counter transactions.
“Although we have so far only received verbal complaints, we have acted on it by asking the banks to give the full detail on the type of charges they are imposing on customers,” he told malaysiakini yesterday.
“In fact, many were totally unaware of these charges until later, when they realised that small amounts were being debited from their accounts.”
He said one of the complaints involved a third party who wanted to cash a cheque and was shocked when told to pay a RM2 service charge.
“This does not happen if the cheque is cashed personally by the account
holder.”
Promptly and seriously only one or two banks have responded so far, said Veerasingam. He hoped the rest would come in soon.
“This is something that Bank Negara must look into promptly and very seriously.”
None of the central bank officials could be reached for comment.
Effective Dec 20, Maybank will start imposing a RM12 annual subscription fee for customers using its Internet banking facility, Maybank2u.com, where an upgraded posting explains the service charge.
The Maybank2u website states that fees and commissions are levied on various products and services provided by Maybank. The move has prompted hundreds of protest e-mails to the Maybank Group Contact Centre whose response has been a standard format e-mail to all customers, regardless of their queries or suggestions. An online petition is currently making its rounds via e-mails asking the Malaysian, Singaporean and Filipino customers of the country’s largest banking group to show the power of consumers by signing it before Dec 19. Don’t remain silent
Referring to the latest charge by Maybank2u.com to be imposed, the petition said it was ridiculous to pay service charges for “keeping our money in your bank”.
“You (Maybank) use our money to invest in your projects. You give us minimal interest, and you ask us to pay for using services that are given free by other banks!” read the petition, partly in English and Bahasa Malaysia.
The protest note also claimed that Maybank was the only bank to charge 50 sen for withdrawing “our own money” at the ATM for every withdrawal exceeding four times a month.
In Bahasa Malaysia, the note expressed regret that customers did not protest against the 50 sen charge when it was first imposed a few months ago.
“If we continue to remain silent, I’m sure the banks will impose more charges on us in the future.
“It is because we had failed to protest previously that this is happening now. Come, let’s act. Enough is enough!” the petition concludes.
“Let’s teach them (a lesson) by clicking on the ‘reject’ option on the subscription page in protest of their new terms.”
The petition ends with a call to all Malaysians to show their consumer power by uniting behind this one issue.
———————————————————————-
Sometimes, i wonder if the bank care about us, the consumer. As my friend put it “Every businessman will try to cheat money off the consumer no matter how ethical they are”. But, isn’t the Bank suppose to be our most trusted business companion?

Often we hear and see in the radio or tv about a certain community leader or ministers blaming the reckless and selfish drivers for the increased road accident. However, have they ever think that their road planning,its design and the quality of the work carry out by their nominated contractors should equally be blame for the increased accidents? Do all these “leaders” have any right to point their blood stained fingers at someone else? Afterall, they are chosen by the people to serve the people and they PROMISED and VOWED on it.

Citizen Nades aka R. Nadeswaran wrote about this on 1/12/2004:-

” Way back in the sixties, pupils in Standard Six learnt the exploits of Francis Drake, Christopher Columbus, Mahatma Gandhi and Ali Jinnah. We also learnt about one Mr MacAdam, who revolutionised the road building industry.

As 11-year-olds, we were perplexed that most of the roads in Malaya at that time were “MacAdamised” roads. Then came someone who decided 11-year-olds had enough of colonial masters and felt they should all learn about Hang Tuah and forget about the Hindu prince called Parameswara.

But those in the public service presently, including Mr Suret Singh, the director-general of the Transport Ministry’s Road Safety Department must have also come across Mr MacAdam. So, what has road safety got to do with MacAdam?

The majority are of the wrongly held view that accidents are only related to speeding, careless driving and the like. But don’t forget that the road signages, construction, condition and maintenance of roads are contributing factors to accidents. For example, a newly-constructed road in SS2 in Petaling Jaya has become a sea of pot-holes and pebbles after rain over the past few days.
While we cannot tell government departments and agencies which contractor they should appoint to carry out road works, (lest yet another scandal ala PMC comes to the fore), at least we can tell them that we need good roads. Therefore, while congratulating the ministry for its far-sightedness in setting up a department to look after road safety, one must not forget to see if the DG and his officers are vested with enough powers to ensure that our roads are safe. Can the DG, for example, compel other departments and agencies to have more visible signs on dangers ahead?

Can the DG ask the Public Works Department to realign any road which it deems is dangerous to the public? At a time when agencies are willing to pay up to RM16, 000 each for plastic coconut trees, will they be willing to spend a fraction for an “Awas” sign? From past experiences, the plastic coconut trees bring other sort of benefits for the people who sign the local order. But can road signs bring about similar rewards?

Can the DG compel the little dictators in local councils to cancel the licences of billboards and hoardings at road junctions?

All the advertisements and television commercials will mean nothing if the people involved do not have the power to put right several wrongs of other departments and agencies who seem to get their priorities wrong.

There was a time when it was a government policy not to allow any sort of advertisements at junctions because they are a distraction to motorists. These days, they are premium spots, not only for the advertisers but also for those who sign the approval forms.The list goes on and on. Suret has the job cut out for him, but he will Be wrong if he thinks the number of accidents and the related deaths can be reduced with the snap of a finger.

Already, the chest-thumpers are at work — claiming that the latest Ops Sikap has brought down the deaths during the recent festive season to 200. The prime minister has chided such feats and rightly so, because one death is one too many. It will be impossible for the department with its small pool of people to undertake a national-level effort.

I am of the view that the department identifies one municipality and implements the policies and measures, then fine tune it and then “export” them periodically to other municipalities. This is the only way to go forward — focus on one area and then get the systems right. Otherwise, the attention will be divided and there will be no concentration in the efforts. We have already spent millions on road safety campaigns which have not brought about the desired results. We are going to spend millions more, but this time around, let us do a bit of planning and execute the plan well.”

Note: This article was published in The SUN on 1/12/2004.

Ban this killer jelly
A consultant pathologist has urged the authorities to ban cup jelly candy as it poses a high suffocation risk among children. Prof Dr Kasinathan Nadesan of the University Malaya Medical Centre told The Malay Mail that most children sucked the jelly straight from its container after lifting the tab. Due to the texture of the jelly, it gets sucked straight into the throat and this may cause children to choke.
“If the blockage is not cleared quickly the victim may die within minutes,” Dr Nadesan said when asked to comment on the death of three-year-old Wong Poh Yan on Sunday.
Poh Yan was riding a bicycle accompanied by her Indonesian maid near her house in Seri Petaling when she choked on the candy, the second piece she had within minutes. The maid tried to dig out the candy using her fingers but failed. The girl was pronounced dead when she was taken to a nearby clinic by her father. A post-mortem at the UMMC on Monday revealed that the candy was lodged in her throat between the larynx and vocal chords. Checks by The Malay Mail at shops near the victim’s house showed several brands of the jelly on sale at RM1.20 for a packet of 20 cups.
Dr Nadesan said what happened to Poh Yan is not an isolated case. He said there have been similar cases in the past year, although he could not give details.
“That is why I am calling for a ban on this particular type of jelly which is sucked by children,” he said.
“Meanwhile, parents should supervise their children when this jelly is consumed.”
Asked what was the best way to help a child who is choking, Dr Nadesan said the child has to be held by the legs, upside-down and slapped hard on the back, just below the neck.
“This is the most effective and the fastest way to dislodge the foreign object from the throat. There is no point running to a doctor at that time, as every second counts,” he said.
“The child could end up dead by the time he or she gets medical attention.”
Poh Yan, the youngest of four children, was cremated yesterday at the Cheras crematorium.
Note1: This story was published in Malay Mail on 24th November by Marhalim Abas

Note2:Contrary to what Dr Nadesan was quoted in the above item about holding a choking child upside down and slapping hard on the back just below the neck,
The Heimlich Institute recommends:
Don’t slap the victim’s back. (This could make matters worse.)
The Heimlich Manoeuvre is an option which may work better.
How to do the Heimlich Manoeuvre:
The Heimlich Manoeuvre for CHOKING INFANTS
A choking victim can’t speak or breathe and needs your help immediately.
Follow these steps to help a choking infant:
1. Lay the child down, face up, on a firm surface and kneel or stand at the victim’s feet, or hold infant on your lap facing away from you.
2. Place the middle and index fingers of both your hands below his rib cage and above his navel.
3. Press into the victim’s upper abdomen with a quick upward thrust; do not squeeze the rib cage. Be very gentle.
4. Repeat until object is expelled.
5. If the Victim has not recovered, proceed with CPR. The Victim should see a physician immediately after rescue.
6. See a physician immediately after rescue.