LETTER | Macroeconomic management is about anticipating and managing imbalances as they arise. It is certainly not just confined to describing and telling us the problems after they have become acute.
This is my take on the story by Bank Negara Malaysia, on its recent narrative on affordable housing in Malaysia.
Why tell us now there is a mismatch of demand and supply of affordable housing? Why tell us now household income growth has not been able to keep pace with escalation in prices of houses?
Why tell us now that developers have been focusing too much on high-end houses? And why tell us now that efforts by agencies set up to provide affordable housing have been too disorganised and dissipating?
May I ask for how long the imbalances mentioned above have been perpetuating? As far as I know, some of these problems have been in existence for decades. What were we doing during those years?
What the authorities did in the past was not to correct the imbalances. Instead, they have often taken measures to make the situation worse.
Whenever the housing market experienced some slowdown, interest rates were lowered and loan eligibilities were relaxed to encourage more imbalances. After many years, of course the problems have become acute, as manifested today.
The preoccupation of our macroeconomic management is growth and political expediency, nothing else. We do not care about is the quality of growth or its sustainability. We do not care about the imbalances that will eventually sink us.
Right now I can think of a few more imbalances which we have been talking about, but nothing much has been done to correct them. I guess that we must, again, wait for the problems to become acute before the authorities concerned are able to take notice of them.
The first is the inundation of foreign workers into almost every facet of our economy. No one is saying much or doing anything about it because it is just too lucrative for some.
Not to worry, for we will eventually see the interest, income and productivity of ordinary Malaysians severely affected before anything worthwhile is done.
The second imbalance is the size, the salaries and the pensions of public servants, including the perks and multiple pensions of ministers and elected officials. If we have compared income growth with prices of homes, I think it is time to do the same analysis on salaries and pensions.
Why not we compare salary and pension growth with the annual budget; salary and pension with revenue growth; salary and pension as the percentage of operating expenditure; and salary and pension growth with GDP/income growth? Try this out and see whether the trend is sustainable over time.
The third is water resource management. We read of trees in catchment areas being depleted. We hear of frequent water contamination in rivers and water bodies. We hear of climatic change with prolonged rainy season and drought. Do we wait for these problems to become acute first?
I hope those in authority will take notice. It is useless to tell us the problems. Please anticipate and do something about these problems. Now!