Malaysia's GDP Growth Falters to 4% in Q2 2011

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Q2 GDP moderates to 4%

By CECILIA KOK cecilia_kok@thestar.com.my

KUALA LUMPUR: Malaysia's economic growth moderated to 4% year-on-year (y-o-y) in the second quarter (Q2) of the year, after a revised growth of 4.9% y-o-y in the preceding quarter due to a weaker external environment.

The country's gross domestic product (GDP - goods and services produced within the country) growth rate for the three months to June, however, was higher than market expectations of 3.6% based on Bloomberg's poll of 16 economists.

Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz said Malaysia's overall economy continued to be sustained by healthy domestic demand and strong exports of commodity and resource-based products amid slower global growth.

Domestic demand in Malaysia during the second quarter grew 5.2% y-o-y due to sustained growth in private spending.

Private consumption remained healthy amid robust labour market conditions, while private capital spending was sustained by expansion in production capacity and investment in new growth areas.

“Based on the growth we have achieved so far, it is likely that Malaysia's GDP for the full year would expand by at least 5%,” Zeti told a press conference here yesterday. She said it was still too early to revise the country's GDP growth forecast.

Malaysia's GDP for the first half of the year grew 4.4% y-o-y, compared with 9.5% y-o-y in the corresponding period last year. The official GDP growth target for the year was between 5% and 6%.

If there was a need for revision, it would be done during the Budget period in October, Zeti said, while emphasising that the central bank remained watchful and was closely monitoring the global economic developments.

“If we have a situation where the United States and Europe slipped into a recession or any other trigger factors that could result in the disruption in international financial markets, we will have to make a reassessment,” Zeti said.



Bank Negara highlighted the fact that global growth had moderated since the second quarter of the year due to a various factors, including fiscal issues and structural weaknesses in advanced economies and global supply chain disruptions stemming from the March 11 earthquake and tsunami in Japan.

These challenges, as the central bank revealed, were reflected in the slower growth in Malaysia's manufacturing sector at 2.1% y-o-y during the second quarter, compared with 5.5% in the preceding quarter.

Zeti conceded the downside risks to Malaysia's external demand had increased following heightened uncertainties in external demand. In the immediate term, she said, fiscal uncertainties and structural weaknesses in advanced economies would continue to challenge global growth and increase volatility in global financial markets.

“Categorically, we have to say we have a strong domestic economy... our fundamentals are strong enough to support our economy,” Zeti said, stressing that a contraction of Malaysia's economy was not to be expected despite the deepening euro debt crisis and sluggish growth in the United States.

CIMB Research, in its report yesterday, expressed optimism that Malaysia's economy would remain in the positive growth trajectory. The research house said the stepping up of government capital spending in the second half and the continued vigour of private capital spending would sustain the momentum of the country's economy.

“We maintain this year's GDP growth estimate at 5%, implying an average growth of between 5% and 5.5% in the second half, compared with 4.5% in 1H11,” CIMB Research said in its report.

Bank Negara also highlighted that the country's inflation, as measured by the consumer price index (CPI), had eased marginally last month. CPI for July gained 3.4% y-o-y, compared with 3.5% y-o-y.
Zeti said Malaysia's full-year CPI would remain within target of 2.5% to 3.5%.

The convenient scapegoat barring technology and social media

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The convenient scapegoat

ALONG THE WATCHTOWER By M.VEERA PANDIYAN veera@thestar.com.my

Barring technology and the social media is not the answer to quelling unrest.
Image via CrunchBase

IS the social media and free flow of information via digital technology good or bad? It depends on where it happens and whom it affects.

Text messages, Twitter and Facebook were hailed as powerful tools against repression when the people of Tunisia, Egypt and Libya took to the streets to protest against their authoritarian rulers in February.

British Prime Minister David Cameron declared then that the Internet and social media belonged to people who had “enough of corruption, of having to make do with what they’re given, of having to settle for second best”.

But when riots and anarchy broke out back home in London and elsewhere in Britain, the reaction was patently different.

“Everyone watching these horrific actions will be struck by how they were organised via social media.

“Free flow of information can be used for good. But it can also be used for ill. When people are using social media for violence, we need to stop them.”

And Cameron told an emergency session of the British Parliament: “So we are working with the police, the intelligence services and industry to look at whether it would be right to stop people communicating via these websites and services when we know they are plotting violence, disorder and criminality.”

The UK police have rounded up close to 5,000 people and taken about 1,000 rioters and looters to court since the ugly wave of unrest and arson hit.

Britain’s entire national intelligence machinery – including its Security Service, or M15, which usually handles espionage and terrorism – is now focused on identifying the culprits and trying to prevent future occurrences of disorder.



The authorities have been generally blaming the misuse of social media for the mayhem; it appears that Research in Motion’s (RIM) BlackBerry Messenger (BBM) was the most effective tool used because of its tight security features.

The BBM application provides password-protected messages to individuals or groups that can only be read with a PIN.

During the height of the riots, British MP David Lammy used Twitter to call for the halt of the service by tweeting: “BBM clearly helping rioters outfox police. Suspend it.”

RIM, Facebook and Twitter have since given assurances that they would comply with the UK’s Regulation of Investigatory Powers Act, the country’s privacy laws.

Besides his government’s willingness to consider shutting down or blocking access to social networks, the British PM also pledged a “zero tolerance” system of policing under which no form of law breaking would be condoned.

Critics have been quick to censure Cameron’s call for curbs and tough measures as smacking of hypocrisy and as a violation of free speech, civil liberties and human rights.

Index on Censorship news editor Padraig Reidy slammed it as “a bizarre and kind of knee-jerk reaction by the government”.

“More recently, we’ve seen this kind of thing in Egypt,” he said.

Actually, the most recent incident of shutting down a phone network happened last week in the United States.

The San Francisco Bay Area Rapid Transit (BART) shut down the cell phone service at four stations to prevent a protest rally over the shooting of two men by police.

BART deactivated the service from 4pm to 7pm to stop protest organisers from communicating.

Meanwhile, China, which was subject to Western sermons over its fierce crackdown on dissent in the wake of the Arab Spring uprisings, has raised safety concerns over the 2012 Olympics to be staged in London.

The Chinese media has responded to the UK riots with “a mixture of shock and schadenfreude”, as fittingly described by the Daily Telegraph.

“The West has been talking about supporting Internet freedom, and opposing other countries’ government to control this kind of websites. Now we can say they are tasting the bitter fruit (of their complacency) and they can’t complain about it,” wrote a People’s Daily commentator.

But the real issue to be addressed by governments everywhere is distrust brought about by the gap between the haves and have-nots and unfairness, whether real of perceived.

Ian Williams, a veteran journalist and analyst, described it aptly when he said the UK government’s posturing ignored the fact lawlessness in the highest places was at the root of the riots.

“The rioters who were interviewed and people on the streets all remarked upon members of parliament stealing expenses from the tax payer, mostly with impunity, although some went to jail,” he said when interviewed by Press TV.

“They look at the bankers making billions of dollars and getting away with it; they look at Rupert Murdoch, the head of News International, hacking innocent people’s telephones, and getting away with it.
“So basically the message that is being sent from the ruling classes of Britain is that the law is not there to be obeyed.

“So to start shouting that the lesser people - the people who steal televisions - should be locked up for life whereas the people who steal whole industries and banks and countries should be given knighthoods and peerages for it is not really a sustainable one on the streets I suspect.”

> Associate Editor M. Veera Pandiyan likes this quote by Edgar Allan Poe: The nose of a mob is its imagination. By this, at any time, it can be quietly led.

Malaysians are always an ‘exception’?

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We are always an ‘exception’

Musings By Marina Mahathir

Malaysian policies often state that we are different and therefore cannot be compared with others. Yet those who join peaceful marches are likened to British rioters. Suddenly we are the same?

ARE we getting progressively schizophrenic? Judging by current responses to events around the world, it would be easy to conclude that we are.

Schizophrenia is a mental disorder that makes it difficult to tell the difference between real and unreal experiences, to think logically, to have normal emotional responses and to behave normally in social situations.

If you read up on Malaysian policies and statements on various issues, the one striking factor is our insistence on exceptionalism. That is, we are different and therefore cannot be compared with any other country.

Fiery aftermath: The violent riots in London left many properties in ruin. — AFP

In the early years of the AIDS pandemic, we thought we were protected because we were different. If non-Muslims in other Muslim countries use the word “Allah” for God with no fuss, ours can’t because we are different. We are apparently unique and incomparable to anyone else in the world.

Which is why it puzzles me that all of a sudden our citizens, or at least the ones who want to voice their opinions with peaceful assemblies and marches, are being compared to British rioters and looters.
If we are always different, how come suddenly we are the same?

Going by the statements of our leaders, basically we are nothing more than savages who would rob, rape, loot and pillage given half the chance. Therefore, we need all sorts of laws to keep us in check and not venture in groups of more than five outside our homes.

Now, this is why that schizophrenic inability to think logically comes into play. Despite evidence that none of the 30,000 or so peaceful marchers last July robbed, raped, looted or pillaged, our leaders insist that we would have. They must be looking at mirrors.

Just a few days ago the fellow who demonstrated how inconvenient a protest is by inconveniencing everyone in Penang declared that he would burn down two online news portals whose reports he disagreed with. Now if that’s not London rioter behaviour, I don’t know what is.



More disturbingly, after already having insulted all the good citizens who exercised their right to peaceful assembly, our leaders go on to insult them some more.

Instead of being proud that we did not have the type of violence that the UK experienced, instead of talking about how so much more civilised our people are, our leaders liken us to rioters who have vandalised, stolen and killed.

Talk about the inability to distinguish between reality and fantasy.

A certain amount of hypocrisy also rears its ugly head. What if Mark Duggan, the man who was shot by police in London and whose family’s peaceful protest became the original rallying cry for the rioters, was Mohamad Duggan?

Between 1987 and 1993 and 2000 and 2005, the Palestinian people went through two uprisings against the Israeli government, known as the First and Second Intifadas, respectively. Both Intifadas involved demonstrations, protests and, yes, a certain amount of violent rioting.

They were met with an even more violent response from the Israelis that resulted in many deaths and the eventual blockade of Gaza, still in force today.

Our government supported the Intifadas then. Does that mean that our government supports the right of Palestinians to demonstrate, protest and riot, but refuses its own people’s right to do much less, that is to just march peacefully?

Or is the logic that when governments are democratically elected, its people then lose the right to protest against them?

Conveniently ignored, too, is the fact that in the UK, protests and demonstrations are held all the time without the type of violence we saw recently.

One of the biggest was in 2003 when hundreds of thousands of people marched against the Iraq war. At the time we looked benignly at this because we had the same stand. Did we tell the Brits and others round the world that they should not demonstrate against the war?

So what is the message here? We may be trusted to peacefully protest as long as the subject of our protest is in sync with the Government’s. Otherwise, if we should protest for free and fair elections, against corruption or anything else that the Constitution gives us the right to, we are labelled as unpatriotic thugs out to disturb the peace and destroy the economy and image of our country.

Looking at the UK riots, are we even talking about the same thing? What cause was the UK rioters espousing?

Some wide reading instead of political posturing might be more beneficial here. The UK rioters did not loot bookshops, and some have suggested it’s because they don’t like to read.

Perhaps they are not unlike some of our politicians.