Archive for the ‘Economics’ Category

Red Gold on the rise again in international markets

Saturday, August 15th, 2020
The palm oil industry continues to shape our life then, now and in the future as palm agro-commodity, involving upstream and downstream activities, helped Malaysia to become one of the largest palm oil producing countries in the world. - NSTP file pic

The palm oil industry continues to shape our life then, now and in the future as palm agro-commodity, involving upstream and downstream activities, helped Malaysia to become one of the largest palm oil producing countries in the world. – NSTP file pic

RED Gold is a popular expression among palm agro-communities as it refers to oil palm trees and the growers believe the tree is God’s gift.

It all started with the first oil palm tree planting in a commercial farm near Tennamaram Estate, Batang Berjuntai (now Bestari Jaya) in 1917.

The palm oil industry continues to shape our life then, now and in the future as palm agro-commodity, involving upstream and downstream activities, helped Malaysia to become one of the largest palm oil producing countries in the world.

One can see this as the value of exports for the period January to June 2020 amounted to RM21.16 billion compared to RM20.06 billion in the same period last year. The value of palm oil exports this year is expected to reach between RM65 billion and RM70 billion compared to RM63.73 billion last year.

This confidence was expressed by Plantation Industries and Commodities Minister Datuk Dr Mohd Khairuddin Aman Razali, who was of the view that the palm oil industry market needed to be innovated in terms of new markets, approaches, initiatives and rebranding.

Though Covid-19 has an effect, it is not a big reason to start doubting production because this commodity contributes to the country’s gross domestic product (GDP) of 4.76 per cent amounting to RM64.84 billion.

Acknowledging that contribution, a drastic step was taken towards a more responsive approach, which was the rebranding of the palm oil industry using the tagline “Palm Oil is God’s Gift”, replacing “Love My Palm Oil” in an effort to elevate the country’s reputation, image and identity in the regional and international markets.

In other words, the rebranding to “Palm Oil is God’s Gift” should be seen as conveying a consistent image to the internal and external environment while boosting revenue in the long-term and putting the country’s major agro-commodities as the “frontliner” in terms of the nation’s income.

The Plantation Industries and Commodities Ministry needs to focus more on the rebranding as a new presence that can attract a lot of attention and in turn become the key for the ministry, including the organisation under it to lead the development of a strong corporate brand.

Dr Khairuddin’s approach is in line with the views of a communications scholar who put forward the concept of PATH — Promise, Acceptance, Trust and Hope — to support the slogan “Palm Oil is God’s Gift” while making the brand better with it being always in the minds of stakeholders.

For example, customers who buy Malaysian palm oil buy them due to the perception that they are buying the best in terms of durability and reliability in terms of quality, supported by the Malaysian Sustainable Palm Oil Certification (MSPO) which is increasingly recognised globally, including Asean, China, India, Japan and parts of the European Union.

In this regard, the time has come for the slogan “Palm Oil is God’s Gift” to be used to promote the country’s palm oil as it has the characteristics of a guarantee symbolising the brand as trustworthy and having high reliability.

It’s a certainty that the country’s palm oil industry players, especially the smallholders, have high confidence and expectations, seeing the price of crude palm oil possibly reaching RM2,400 to RM2,800 per tonne in the next few months.

Previously, the lowest palm oil price was recorded in December 2018 at RM1,794.50 per tonne and RM1,879 per tonne (July 2019) for the period of 2016-2019.

With strong promotions and marketing, the “Palm Oil is God’s Gift” brand will be heard and reinforced in the Asia Pacific region (Philippines, Vietnam and Myanmar), West Asia (Egypt, Saudi Arabia and Jordan), Africa (Djibouti, Ethiopia, Somalia and Mozambique) as well as Central Asia (Afghanistan, Uzbekistan and Kazakhstan).

The country’s palm oil industry must maintain a dynamic branding management strategy because to build a brand identity is not easy as it involves costs and needs to be maintained in order to remain strong and effective.

By Ahmad Fauzi Mustafa.

Read more @ https://www.nst.com.my/opinion/columnists/2020/08/616662/red-gold-rise-again-international-markets

Lockdown hits growth, but economy will rebound in 2021

Saturday, August 15th, 2020
Malaysia is not alone in experiencing its deepest recession since the AFC. Singapore’s official forecast for GDP growth is currently at -5 to -7 per cent, Thailand’s is at -8.1 per cent and the Philippines’ is at -5.5 per cent.  NSTP/ NADIM BOKHARIMalaysia is not alone in experiencing its deepest recession since the AFC. Singapore’s official forecast for GDP growth is currently at -5 to -7 per cent, Thailand’s is at -8.1 per cent and the Philippines’ is at -5.5 per cent. NSTP/ NADIM BOKHARI

LETTERS: The sharp downturn in real GDP in 2Q2020 (-17.1 per cent y-o-y) was expected, given that Malaysia was in lockdown under the Movement Control Order (MCO) between March and May. The severity of the GDP contraction even surpassed the decline in real output that Malaysia experienced in 4Q 1998 during the height of the Asian Financial Crisis (AFC).

On the supply side, save for agriculture, a broad-based contraction was seen across sectors. The sharpest drop was in the construction sector (-44.5 per cent), followed by mining and quarrying (-20.0 per cent). The manufacturing sector fell by 18.3 per cent due to disruptions in the global supply chain and weak demand conditions as a result of lockdowns imposed in many countries as well as the sharp deterioration in business conditions.

On the domestic demand side, public investment saw the sharpest drop (-38.7 per cent), followed by private investment (-26.4 per cent). Malaysia’s traditional growth pillar, private consumption, fell 18.5 per cent following movement restrictions and income losses amid weak economic conditions. Government consumption, however, registered a positive growth of 2.3 per cent. On the international front, net exports fell 38.6 per cent.

A recession in 2020 is a foregone conclusion. However, it is important to note that the sharp downturn in 2Q2020 was primarily due to the unprecedented impact of the stringent containment measures imposed to control the Covid-19 pandemic globally and domestically, rather than any abrupt material change in economic fundamentals.

These containment measures, although resulting in significant short-term discomfort, were necessary to ensure that economic growth can be revived when the situation improves. Allowing the economy to run unimpeded could have ruptured the existing economic fabric beyond repair, preventing any smooth recovery in the future.

Malaysia is not alone in experiencing its deepest recession since the AFC. Singapore’s official forecast for GDP growth is currently at -5 to -7 per cent, Thailand’s is at -8.1 per cent and the Philippines’ is at -5.5 per cent. The focus is now on the prospects for 2021 and beyond, that is, the economic landscape in the medium term, given that it will take time for traditional growth drivers (private consumption and investments) to return to pre-Covid-19 levels.

Malaysia’s future growth trajectory hinges largely on private consumption and investments. The former had contributed an average of 71 per cent of headline growth in the past decade. Statistics from previous recessions indicate that private consumption growth in the first year of recovery will generally come in lower than that recorded during the pre-crisis period despite benefiting from the low base factor.

In addition, consumers’ reluctance to indulge in conspicuous consumption patterns similar to pre-Covid-19 levels (due to ongoing concerns regarding the pandemic and the reduction in their purchasing power) will mean that consumer spending growth may not spike as strongly as it did during the first year of the recovery compared to previous recovery periods.

Similarly, investment prospects will not be encouraging if the current estimate of a 30-40 per cent decline in global foreign direct investment (FDI) flows by the United Nations Conference on Trade and Development (UNCTAD) becomes a reality. This is because in the past five years, Malaysia’s FDI inflows tended to move in tandem with global trends.

Notwithstanding the downbeat outlook, assuming that global lockdowns will not take place again in the near term, improvements in global trade will benefit an open economy such as Malaysia. Assuming the World Trade Organisation’s (WTO) projected recovery in global merchandise trade volume in 2021 materialises (2021 forecast: between +21 and +24 per cent), Malaysia’s export performance could pick up and contribute positively to headline growth via improvements in net trade.

On balance, we expect the decline in economic activity to be less severe, as domest

ic and external conditions slowly improve in 2H2020. However, we foresee real GDP growth to remain negative in the next two quarters. Hence, we are revising our real GDP growth forecast for 2020 to -5.5 – 7.0 per cent (BNM: -3.5 – 5.5 per cent).

Going into 2021, we foresee the economy rebounding due to the low base effect and the decent growth in consumer spending. In addition, higher global crude oil prices will provide a boost to the economy (our average Brent forecast for 2021: US$50-US$55 per barrel). As such, we maintain our real GDP growth target at between 6.2 and 6.7 per cent for 2021 (BNM: +5.5 to +8.0 per cent).

by Malaysia Rating Corporation

Read more @ https://www.nst.com.my/opinion/letters/2020/08/616776/lockdown-hits-growth-economy-will-rebound-2021

Malaysia badly hit due to trade openness, strictest containment measures

Friday, August 14th, 2020
Bank Negara governor Datuk Nor Shamsiah Mohd Yunus said Malaysia was badly impacted by the Covid-19 pandemic in the second quarter (Q2) of 2020 as the country has imposed one of the strictest domestic containment measures during the period of the MCO. NSTP/MOHD KHAIRUL HELMY MOHD DINBank Negara governor Datuk Nor Shamsiah Mohd Yunus said Malaysia was badly impacted by the Covid-19 pandemic in the second quarter (Q2) of 2020 as the country has imposed one of the strictest domestic containment measures during the period of the MCO. NSTP/MOHD KHAIRUL HELMY MOHD DIN

KUALA LUMPUR: Malaysia was badly impacted by the Covid-19 pandemic in the second quarter (Q2) of 2020 compared to its peers in Asean given its trade openness,

This was also due to the fact that the country has imposed one of the strictest domestic containment measures during the period of the Movement Control Order (MCO), said Bank Negara Malaysia governor Datuk Nor Shamsiah Mohd Yunus.

The country’s economy contracted 17.1 per cent in Q2 of 2020 from a 0.7 per cent growth in the Q1.

Of the big regional economies, Vietnam posted a 0.36 per cent growth in GDP in Q2, while Indonesia registered a 5.32 per cent contraction.

Singapore experienced a 12.6 per cent contraction while The Philippines registered a 16.5 per cent in GDP contraction during the same quarter.

Thailand will announce its Q2 GDP numbers on August 17.

Nor Shamsiah said these two factors had led to production constraints and mobility restrictions that weighed heavily on economic activities.

She said given the openness of Malaysia’s trade, which accounts for 123 per cent of gross domestic product (GDP), its economy would inevitably be affected by the weak global demand.

She said, in particular, Malaysia has the second-largest tourism market share in the region behind Thailand.

Against 2019 nominal GDP, Malaysia’s share of Asean tourism was about six per cent compared to Thailand’s 11.2 per cent.

“The international travel restrictions led to a sharp decline in tourists arrivals as reflected in Malaysia’s double-digit contraction in exports of services,” she said.

Nor Shamsiah said based on an index developed by the University of Oxford, which tracks the stringency of government’s containment regulations, Malaysia’s response remained one of the strictest in the region.

“By contrast, countries such as South Korea had eased their containment measures quite significantly since mid-April.

“The compliance of Malaysians to the government-mandated regulations has been commendable for the most part.

“This has contributed towards a large and sustained decline in Covid-19 cases from about 100-200 seen in June to the single-digit we are seeing today.

“Such caution and compliance to SOPs (standard operating procedures) are important to continue to contain the spread of the virus.”

However, she said while Malaysia’s economic had seen the worst contraction compared to its Asean peers, Bank Negara remained cautiously optimistic on its prospects for the rest of the year.

This follows an improvement in several key economic indicators in June.

She said this had been possible because of the swift and effective response taken to contain the spread of the pandemic.

For example, she said the manufacturing Purchasing Managers Index (PMI) had rebounded to 10.4 or 40 per cent growth month-on-month (MoM) compared to a decline of nearly 36 per cent in April.

She said wholesale and retail trade index had increased by 25.2 per cent MoM in June, compared to a decline of nearly 38 per cent in April.

“While Malaysia experienced a deeper contraction in Q2, compared to some of the other regional economies, timely and higher frequency data suggest that economic fallout was at its worst in April, reflecting the height of the containment restrictions.

“Since then, as Covid-19 cases declined and movement restrictions were eased, economic activities began expanding in May and improved further in June.

“I am cautiously optimistic that the worst is behind us,” she said.

By Farah Adilla.

Read more @ https://www.nst.com.my/business/2020/08/616555/malaysia-badly-hit-due-trade-openness-strictest-containment-measures

Be responsible for livelihood, economy

Friday, August 7th, 2020
Cooperation from each individual in society is crucial in the  fight against the invisible virus. -NSTP/File pic Cooperation from each individual in society is crucial in the fight against the invisible virus. -NSTP/File pic

SINCE the relaxing of the Conditional Movement Control Order (CMCO), some people seemed complacent in adhering to the Standard Operating Procedures (SOPs).

The SOPs, which accompanied the reopening of the economy, have resulted in some positive developments in our country.

The performance indicator of the manufacturing sector, IHS Markit headline Purchasing Managers’ Index, registered 50 in July with improving new orders, surpassing expectations; total trade grew 2.2 per cent on a year-on-year basis in June while the trade balance expanded to RM20.9 billion compared with RM10.4 billion in May; the industrial production index surged 18.2 per cent on a month-on-month basis in May with expansion in all sectors, and the sales of wholesale and retail trade expanded by 26.3 per cent on a month-on-month basis in May after a decline in April.

Therefore, the relaxation order imposed by the government has boosted economic growth. Nonetheless, many appeared to have taken this decision lightly, resulting in the emergence of new clusters.

Some are triggered by imported cases as those who are infected do not comply with the Home Surveillance Order (HSO) while others were detected at the immigration depots.

For instance, a new cluster was reported from Kedah known as the Sivagangga cluster, triggered by a Malaysian resident who came back from Sivagangga, India, but did not adhere to the HSO.

He tested positive on a repeated Covid-19 screening and making it worse, he had made contact with other people.

As we begin to take a breather, having single-digit local cases, the latest health development is a setback.

The government’s previous decision to reopen the economy comes with a condition — people must adhere to the SOPs.

These new clusters led to the imposition of Enhanced MCO (EMCO) in some localities. There is a possibility of a complete reimposition of the MCO.

Health director-general Datuk Dr Noor Hisham Abdullah said on July 29 that the rise in local transmissions can lead to the reinforcement of the MCO or CMCO.

Let’s look at some countries or cities that are currently under a second round of lockdown measures.

Melbourne is back in a six-week lockdown beginning Aug 2 as it is experiencing a second wave of new cases. This has halted businesses related to retail, manufacturing and administration.

Manila is under a strict lockdown known as Modified Enhanced Community Quarantine (MECQ) for the next two weeks. During MECQ, only a limited number of businesses are allowed to operate and public transportation is shut down.

In the UK, the earlier plan to ease lockdown measures in Leicester on July 4 was cancelled in June because the city accounted for 10 per cent of the overall positive cases in the country.

So, if the MCO or CMCO were to be reinstated in Malaysia, it would be a big blow to the people and business disruptions would worsen the state of unemployment, which had already reached 5.3 per cent in May.

Furthermore, the reimposition of the MCO or CMCO will affect access to education by students due to digital barriers, namely Internet access, particularly those who live in rural areas.

Based on an official survey in 2019, Internet access by households stood at 90.1 per cent but not reaching 100 per cent suggests there are households with a lack of access or no access to Internet at all.

This was one of the issues emphasised by participants in Sabah during EMIR Research’s focus group discussion for our upcoming quarterly poll.

Lastly, should the MCO or CMCO be imposed again, inter-state travel would also be banned, thus wasting the ongoing efforts to boost domestic travel and spending.

As government stimulus packages such as Prihatin and Penjana begin to bear fruit in addressing the people’s burden and worries, cooperation from each individual in society is crucial. The keyword is social responsibility.

By Nur Sofea Hasmira Azahar.

Read more @ https://www.nst.com.my/opinion/columnists/2020/08/614608/be-responsible-livelihood-economy

Palm oil imports by biggest buyer expected to hit 10-month high

Wednesday, August 5th, 2020
Palm oil reserves in Malaysia likely tumbled to a three-year low in July as production shrank and exports surged, according to a Bloomberg survey.Photographer: Joshua Paul/Bloomberg

Palm oil reserves in Malaysia likely tumbled to a three-year low in July as production shrank and exports surged, according to a Bloomberg survey.Photographer: Joshua Paul/Bloomberg

Palm oil imports by India probably surged 46 per cent last month as a drop in stockpiles in the world’s biggest buyer prompted refiners and traders to boost purchases.

Inbound shipments rose to 823,000 tonnees from a month earlier in July as demand from the food services industry grew following the easing of lockdown rules, according to G.G. Patel, managing partner of GGN Research.

That’s the highest since September and compares with 812,805 tonnes in July 2019.

A jump in purchases by India will likely trim stockpiles in top producers Indonesia and Malaysia, potentially further boosting palm oil prices that have advanced more than 20 per cent so far this quarter.

Reserves in Malaysia likely tumbled to a three-year low in July as production shrank and exports surged, according to a Bloomberg survey.

Palm oil consumption by restaurants and hotels suffered in India after the government imposed the world’s most stringent stay-at-home rules in March to curb the spread of the coronavirus among its 1.3 billion people.

The restrictions are gradually being lifted.

Soybean oil imports in July are estimated to have increased to 484,000 tonnes from 331,264 tonnes a month earlier, Patel said.

Sunflower oil buying fell to 199,000 tonnes from 268,128 tonnes.

Edible oil imports probably totalled 1.51 million tonnes, compared with 1.16 million tonnes a month earlier, Patel said.

By BLOOMBERG.

Read more @ https://www.nst.com.my/business/2020/08/614114/palm-oil-imports-biggest-buyer-expected-hit-10-month-high

When panic disorder hits a nation

Tuesday, August 4th, 2020
PANIC disorder is a debilitating mental health condition that you would not wish on your worst enemy.

I know this because I suffered through it for seven long years from 2006. I was lucky enough to come out of it through much reflection and study, changing my lifestyle and focusing on others.

Recently, when I thought about my experience, I found myself reflecting that this country, this nation of diverse people, seems to be suffering through the same thing. And I think how I came out of the condition could throw some light on how we could progress as a nation in the near and far future.

What is panic disorder? In one sense, it is a condition of being deathly afraid of… nothing! Suddenly, the mind sends signals of fear, anxiety and stress over pending destruction and catastrophe that are simply non-existent.

How can I describe it simply? Imagine thinking that you are suffering from a serious illness such as a heart attack or a stroke – and those feelings pop up 20 times a day for the next one year of your life.

A simple headache that can be cured with paracetamol becomes fear of an impending stroke. Gastric heartburn sends signals that you might be having an early heart attack.

People who have panic disorder cannot go to work or even leave the house for fear that they might suffer an attack. I could not even drive to the nearest petrol station and I could only go in to work at the university if my wife came along. She eventually asked for early retirement just to accompany me to my lectures and everywhere, basically.

I usually had one public speaking engagement a month but from 2006 to 2008, I refused all invitations to talks, forums and public lectures. Panic disorder almost ended my career.

After working with a psychiatrist, much Internet surfing and reading about the condition, I came to understand it better and how I might break the vicious cycle of anxiety-fear-anxiety.

There are three things that feed the cycle of fear and anxiety leading to total panic.

The first is a fear of the unknown future that the mind fills with scenarios of disasters, be it economic, health or career disasters, you name it, the mind conjures it up.

Second is living with a perpetual “what if” state of mind so you can plan for every eventuality no matter how extreme. Third is totally focusing on yourself and all these worries.

How did I eventually get out of this condition? First, I had to recognise my number one and number two enemies: my own mind and my daily habits.

The mind must be refocused into thinking of something other than disaster scenarios and the body or actions must fall into rhythms and rituals that are different.

I had to refocus to listen more to my wife’s talk of friends, family, how to redecorate the house, anything. I had to stop focusing only on completing my next book, my next piece of writing, my next argument in a forum, about uniting the nation and furthering my career as I did before.

I also had to learn to “waste time” more. I had to learn to wash my car, do gardening, walk or jog and go shopping with my wife. All these things I used to detest because they had no “market value” or “political mileage”. I had to learn to do the “little things” and dial back the “big stuff”. Only in this way can the brain be rewired differently and the anxious thoughts recede into the background. Physically, the new habits sent different signals to my muscles, also helping me to get out of that vicious cycle.

In the same way, politics and misunderstanding between our cultures and races create a panic disorder condition among us.

Each ethnic group fears an invisible enemy of the other religion, culture and way of life. This is reinforced by unscrupulous politicians and racist academics fuelling the fears. The thought of “what if” this or that happens plagues our minds to the point that this concern for our normal way of life takes precedence over everything else. These fears make each group resolve in only self-centred behaviours and further narrow its friendship circle into a small one indeed.

To become a more trusting and harmonious nation, each ethnic group must refocus its thinking on “other things”. There is no enemy trying to destroy us. Just our active imaginations, a few bad politicians and misguided academics. Why listen to these people who “cari makan” by playing on our fears for their own self-promotion?

Learn new things about other religions and cultures in our country. Don’t just focus on your own group in complete self-interest. Help children, people from “other communities” instead of focusing on just ourselves. The single most important spiritual lesson of enlightenment is always about helping others because in doing that, your own self-centred ego will be kept on a tight leash.

If people can rewire their thinking by learning more about other ethnic groups in Malaysia and retrain their habits into helping the “others” then we will live a more spiritual life that will see this nation dump two of our worst enemies: bad opportunistic leaders and our own self-centred thinking.

It is really not that difficult to change this country – just change ourselves and our thinking first lah.

By Prof Dr Mohd Tajuddin Mohd Rasdi.

Read more @ https://www.thestar.com.my/opinion/columnists/over-the-top/2020/08/04/when-panic-disorder-hits-a-nation#cxrecs_s

Saving SMEs during pandemic is a top priority

Tuesday, August 4th, 2020
In a nutshell, saving SMEs during this pandemic is a top priority. - NSTP file picIn a nutshell, saving SMEs during this pandemic is a top priority. – NSTP file pic

THERE is no doubt that small and medium enterprises (SMEs) have been hit with cash-flow issues as a result of the Covid-19 crisis.

Weak economic and financial results, demand cutbacks, supply chain disruptions and knock-on effects of troubled sectors on employment are challenging most economies, including our SMEs.

While the rollout of several stimulus packages by the government is timely, many SMEs are still struggling.

One of the government’s efforts to help SMEs is to identify skill deficiencies so that training can be provided for employees. This will boost SME productivity and quality to national and international standards.

Initiatives to help SMEs are needed particularly in the e-commerce sector.

This would include formulating the right strategies and techniques to ensure their products and services marketed on digital platforms reach targeted consumer groups. Therefore, it is crucial for SMEs to reinvent business strategies to overcome these difficult times and minimise losses.

Economists suggest SMEs should review business operating models and modify their operations quickly to adapt to market conditions.

As their existing operating models might not be efficient, SMEs should look into new approaches to ensure long-term sustainability.

Besides the fundamental need for SMEs to move to online platforms due to changed consumer behaviour, they should have a strategy to develop new or modify existing products to open up new markets, or at least to cater for current demand.

Similarly, brands facing crises like the pandemic do not just have a potential loss of sales to worry about. Companies will also need to make sure they are acting effectively and authentically according to their brand response and positioning strategy if they want to succeed in the long term.

When faced with a crisis as confusing and terrifying as Covid-19, it is easy for even the biggest brands to get overwhelmed and make the wrong call. On the one hand, brands need to maintain positioning, showcasing a unique tone of voice to differentiate from the competition.

A consistent branding strategy can encourage familiarity, maintain customer loyalty and trust.

During times of crisis, business leaders need to sit down with their teams and think about the messages they want to send with their branding and use a brand positioning strategy to alleviate customer fears and build deeper relationships with them.

In a nutshell, saving SMEs during this pandemic is a top priority.

The sector plays a vital role in driving the overall economy in the short and long term. If Malaysia’s SMEs fail to rebound, economic growth may deteriorate even further.

The unemployment rate could easily soar to double digits, which we have seen only during previous economic crises.

Therefore, it is imperative to equip SMEs with the right tools and skills to assist them in strategising their business for long term sustainability.

By Dr Imelda Albert Gisip.

Read more @ https://www.nst.com.my/opinion/columnists/2020/08/613732/saving-smes-during-pandemic-top-priority

MTUC: Economic hara-kiri in restricting foreign labour to just three sectors

Tuesday, August 4th, 2020
(File pix) The government may be committing economic hara-kiri by restricting foreign labour to just the plantation, agricultural and construction sectors, said the Malaysian Trades Union Congress (MTUC). Photo by MOHAMAD SHAHRIL BADRI SAALI/NSTP(File pix) The government may be committing economic hara-kiri by restricting foreign labour to just the plantation, agricultural and construction sectors, said the Malaysian Trades Union Congress (MTUC). Photo by MOHAMAD SHAHRIL BADRI SAALI/NSTP

KUALA LUMPUR: The government may be committing economic hara-kiri by restricting foreign labour to just the plantation, agricultural and construction sectors, said the Malaysian Trades Union Congress (MTUC).

It secretary-general J.Solomon said the government’s tough stance on migrant labour seems to be based on the belief that locals would be willing and raring to take up 3D jobs – dirty, dangerous and demeaning – as well as other work in the manufacturing and services sectors on the same terms and conditions as migrant workers.

“MTUC regards this notion as nothing more than a pipe dream that ignores the reality on the ground.

“Our feedback shows most Malaysians will only take up jobs vacated by foreigners if they are given a better deal in terms of salaries and benefits.

“This isn’t borne out of any negative attitude on the part of the local work force but simply based on their need to sustain themselves and their families given the current high cost of living and the revised poverty line by the government,” he said in a statement today.

Solomon said many of the documented foreign workers in Malaysia were paid the minimum wage or slightly above while perks such as mandatory rest days, overtime or medical benefits were rare and inadequate.

Those without documents and hired illegally fare far worse with unscrupulous employers paying them less than RM1,000 ringgit monthly, he said.

As such, he said it was disappointing to note that neither Human Resources Minister Datuk Seri M. Saravanan nor the Deputy Minister Tuan Awang Hashim has yet to announce any move or even desire to address this issue in their zeal to push through the government’s agenda to reduce foreign workers in key sectors of the economy.

“Instead of making ad hoc announcements, first on the blanket freeze of foreign workers till year end and subsequently limiting them to work in only three sectors, the ministry should have engaged the National Labour Advisory Council (NLAC) to find practical solutions to reduce the country’s over dependence on migrant labour and to address rising unemployment among locals,” he said.

He said despite being equal partners with the Human Recources Ministry (MoHR) in the NLAC, MTUC and Malaysian Employers Federation were not consulted for their feedback prior to the government’s move to curtail the use of foreign labour in Malaysia.

The move by MoHR to blank out the NLAC over such an important issue was in breach of the International Labour Organisation (ILO) Convention 144 Tripartite Consultation.

With no such consultation taking place, Solomon said the MoHR was now forced to address the growing labour crunch faced by employers in key sectors, including Small and Medium Enterprises, at a time when they are desperately attempting to recover from the many restrictions that were imposed to contain the Covid-19 pandemic.

“Taking up jobs vacated by foreigners should not be a problem for the more than 800,000 people who were listed unemployed in the first five months of this year, according to official statistics. The figure could well be above the 1 million mark by now.

“However many of them have remained on the sidelines, simply because the government has not made any move to address the need for employers to offer improved wages and benefits to Malaysian workers,” he said.

Solomon said while the high cost of living and harsh realities of life may force some Malaysians to accept the same paltry salary offered to foreign workers, it would be inhumane for the government to expect local workers to support their households on monthly income of around RM1,200, or even RM2,000 especially in cities where the cost of living had skyrocketed.

“For a long while, new businesses and manufacturing plants in Malaysia were opened or expanded to cater to low cost migrant labour. These factories produce goods at huge volumes but low value added, and do not require skills or very little skills, with limited technology uptake.

Solomon said it was imperative that the government takes the lead to ensure fair and decent living wages for Malaysians as well as foreign workers, especially now that the poverty line income has been raised to RM2,208, a clear signal for the government to raise the minimum wage to a more realistic figure.

“The government’s continued failure to coax or compel employers in offering a better deal to local workers for jobs traditionally held by migrants will worsen the labour crunch as the restrictions on foreign workers take hold and locals remain unwilling to step in. Such a situation will seriously impact the economic recovery,” he said.

Solomon said foreign labour was deeply embedded in Malaysia’s economy and confining migrant labourers to work in just three sectors seems to be an act of economic self-immolation by the government.

Big businesses alone did not depend on foreign workers. Even small businesses such as coffee shops, hair salons and neighbourhood security rely on migrant labour, he said, adding that of the two million registered foreign workers in Malaysia, about 700,000 were employed in the manufacturing sector, and another 309,000 in services. Undocumented workers account roughly another one million in these sectors.

“Phasing out foreign workers from these businesses, big or small, and restricting them to the construction, agricultural and plantation sectors, will have an adverse effect on our economy, more so if the government fails to address the underlying issues which require meaningful discussions with the stakeholders.

“We urge Prime Minister Tan Sri Muhyiddin Yassin to put on hold any move to restrict the recruitment of foreign workers to the above mentioned sectors and order the MOHR to carry out proper and meaningful discussions with the NLAC, in accordance with the ILO Convention 144,” Solomon urged.

By B. Suresh Ram.

Read more @ https://www.nst.com.my/news/nation/2020/08/613875/mtuc-economic-hara-kiri-restricting-foreign-labour-just-three-sectors

The changing face of advertising

Sunday, August 2nd, 2020
With programmatic advertising, online ads no longer target specific publications. They focus on specific types of users instead.  -NSTP/File pic     With programmatic advertising, online ads no longer target specific publications. They focus on specific types of users instead. -NSTP/File pic

BEFORE the Covid-19 pandemic, the World Advertising Research Centre (WARC) had estimated that the global advertising investment would chart a healthy growth of 7.1 per cent this year.

But now, it is a brutal contraction of 8.1 per cent or almost US$50 billion as a result of changing consumer behaviour. The total loss becomes a bleak US$96.4 billion when taking into account pre-pandemic growth forecasts.

As advertisers adapt to rising in-home media consumption, the tug-of-war for advertising dollars between online and traditional media seems to have a decisive winner. Nielsen Malaysia, a measurement and data analytics company, says the impact in Malaysia is no different from current global trends, and any medium that cannot be accessed from home is already feeling the impact of Covid-19.

The way forward in a cluttered industry like advertising is through the digital reach. We cannot deny the fact that the digital economy has been the least impacted by the pandemic.

In Malaysia, we are seeing many companies boosting their e-commerce capabilities and traffic across digital platforms to ease the overall impact on their businesses.

With the ongoing Recovery Movement Control Order (RMCO), we see a surge of businesses that offer services that serve the people with immediate needs.

For instance, companies in the food and beverage industry have come up with delivery and pick-up options, while those in the financial services have pushed for online banking and provided ways for their customers to conduct business transactions without human contact. But not all industries are spending more on advertising. It seems that the automotive, retail, financial and cosmetics industries, for instance, will see a drop in advertising spending.

WARC says only the telecommunications and utility industries will spend more money on advertising.

It says these are projected to see a 4.3 per cent increase in ad spend this year on a global scale.

Digital platforms will continue to be the preferred choice for marketers given the reach of the audience and the quick turnaround in terms of creative messaging.

According to Nielsen Ad Intel, as consumers are spending more time at home, brands are allocating more dollars to certain media formats.

Case in point, when it comes to traditional in-home formats, such as television, consumers are opting for streaming services, instead. They streamed twice as much online video from services such as Netflix, compared with last year. Advertisers are pumping money into these streaming services.

On a related issue, our situation is slightly different from the West whose citizens do not put their trust in government-linked television stations. In Malaysia, there is a “return” of TV viewership, although millennials are inclined to streaming services, ignoring TV stations, especially news programmes.

Nielsen Malaysia says TV viewership in the country has increased by 47 per cent, compared with the period before the pandemic.

Reason for this? With the prevalence of fake news circulated on social media, viewers are opting for credible news from local television stations.

I have come to learn TV broadcasters in these stations offer packages to clients by tying up with the prime-time and key news programmes to get their brands’ messages across to the audience.

International Ad Forecast, another data analytics company, says advertising spending across all traditional media formats has seen a drastic decline over the years although there is a paucity of statistics to show how these traditional media industries suffered.

In the 1990s and early 2000s, digital display advertising — banner ads and pop-ups — was just the digital analogue of print advertising. A brand would buy space directly from a website.

But today, that has become increasingly rare.

WARC says what has risen in its place is something known as “programmatic advertising”. With this, ads no longer target specific publications. Instead, they target specific types of users based on factors, such as age, sex, location and browsing history, which reveals their interests.

Advertisers now put their ads into an automated system with instructions to reach a certain type of audience. They have some power to tell the system to keep their ads away from certain sites and content. It is now all about artificial intelligence, and systemic machine learning is taking over the conventional ways in advertising.

By Rohiman Haroon.

Read more @ https://www.nst.com.my/opinion/columnists/2020/08/613326/changing-face-advertising

Introduce decent standard of living guide for all

Friday, July 31st, 2020
The national and state level of the Bottom 40 (B40), Middle 40 (M40), and Top 20 (T20) income thresholds for an average household as a relative measure of poverty were also released. -Pic for illustrations purposes onlyThe national and state level of the Bottom 40 (B40), Middle 40 (M40), and Top 20 (T20) income thresholds for an average household as a relative measure of poverty were also released. -Pic for illustrations purposes only

LETTER: Recently, the Department of Statistics Malaysia (DOSM) announced a revision of the national Poverty Line Income (PLI) from RM980 to RM2,208. However, the PLI does not take into account the cost of living beyond a very basic budget.

It does not take into consideration expenditures like childcare, leisure, and social activities that not only draw from a household’s income but are also determining factors in a person’s ability to work and endure the potential hardships associated with balancing employment and other aspects of everyday life.

At the same time, the national and state level of the Bottom 40 (B40), Middle 40 (M40), and Top 20 (T20) income thresholds for an average household as a relative measure of poverty were also released. Several government assistance programmes, such as Bantuan Sara Hidup and the PeKA B40 healthcare scheme for the low-income group, use the national B40 threshold as one of their eligibility criteria.

However, the use of a single national-level B40 threshold discriminates the relatively non-well-off households that are in richer states. The differences in state-level B40, M40, and T20 income thresholds are large. For example, a household in Kelantan with an income of RM6,620 is considered a T20 household in the state, but the B40 threshold for an average household in Selangor is RM6,960.

This large disparity suggests that a one size fit all B40 threshold, which many government initiatives rely on as eligibility criteria, is not appropriate. With it, many who are in states with low average household income will enjoy the programme, while the urban poor, especially in Kuala Lumpur and Selangor, which have higher average household incomes, will not receive the assistance.

If the rationale is that those in the B40 group should be assisted, then the group in Selangor with a household income of RM6,960 should also be assisted. A better alternative is not a relative poverty measure similar to the B40 threshold, but for Malaysia to use a decent standard of living measure or a living wage as a guide for compensation policy.

A decent standard of living measure will calculate the budget that will provide a worker with sufficient income to reach a decent standard of living based on the cost of accommodation, goods, and services within a particular locality. Furthermore, it should not only be measured at the state level but also the district level.

I believe the department has the data to calculate the decent standard of living at the district level as Bank Negara Malaysia and the Employees Provident Fund have estimated the living wage for those in Kuala Lumpur. The Shared Prosperity Vision aims to provide a decent standard of living to all Malaysians by 2030.

Many global cities, such as Berkeley, San Francisco, and London, have used the decent standard of living measure as a guide for workers’ wages. The PLI may provide an optimum minimum to measure poverty. But as Malaysia progresses towards being a developed country, a decent standard of living is a more appropriate apparatus to measure the wellbeing of society.

by GAIRUZAZMI MAT GHANI,

Read more @ https://www.nst.com.my/opinion/letters/2020/07/612890/introduce-decent-standard-living-guide-all