In Memory of My Father: Hamzah Kusni 1933-2008

Monday 22nd December 2008. About 3pm Malaysian time. Allah called him, and he is no longer with us.
It was about 8.30pm NZ time. I had a call on my cellphone from Maslina, my sister cried on the phone and told me that my dad is no longer with us. Took me a few minutes for the words to sink in..
Few minutes later Maslina rang again and told me what happened. My father had been sick again, (his heart has been giving him trouble for the past few years)and my family was going to take him to the hospital. But his time had come.

One thing I regret, is that I didnt have the chance to see him.


Last Raya, I rang my parent, and I managed to speak to everyone, especially my parent. My father was chirpy enough, his voice was clear and he asked me when I would come back home. I told him that I was saving money to come home during Raya Haji. We were planning to buy a 'lembu' for korban, and father asked me to include my stillborn sister's name in the korban. I said, yes dad.
I sort of know that I had to come home then. I started looking for airfare prices on the internet. Yes I needed to save around NZD2000+ just for the return airfare, it is peak season in December.
Needless to say, come Raya Haji, I didnt make it. At least the korban that we planned was done. A couple of days after Raya Haji, my father was admitted to hospital again, his heart giving him problem, not pumping blood properly and legs, hands and most part of his body get bloated.
I knew I had to come home, and that was less than a fortnight ago. I still didnt have enough.
Now its too late.
I hadnt been back since May 2004.

Today I managed to secure a seat on Jetstar.com on the 30 Dec from Christchurch to Gold Coast (Coolangatta), and then on to KL on Airasia.com the next day. Thanks to Nadzri and Wahidah who gave me the money. I am most grateful.

Let GM, Chrysler and Ford Bankrupt.

Yes thats right. In the world where every one is calling to bailout the Big Three, I am calling to let them go bankrupt. There is no need for me to present the benefit of bailing out the Big Three. Three million job will be saved, Those states will save billions in unemployment cost yadda..yadda. Thats is absolutely true that a lot of jobs will be saved, and cities will continue to flourish instead of dwindling to economic oblivion.

For a country that preaches free market, the bailout is contrary to the principles of laizze faire. Free market also means consumer are free to choose what they want. If consumers have chosen not to support the Big Three, there is no point propping them up with a bailout.

My argument is, that bailout money will only prolong the inevitable, and propping up a dying dinosaur. GM, Chrysler and Ford had to change the way they do business long ago. The Age of Great Automotive economy has peaked long ago, soon as the price of oil reached its USD$80 a barrel and people found a better way of socializing on the internet and do business online. As soon as people's love affair with cars is over, the Big Three is done. Furthermore, the trend lately is for environmentally friendly everything.
Gas guzzler cars and SUV has been identified as least environmentally friendly.

Yes millions of jobs will be lost, but those newly unemployed would find new work niches or move to other cities, hence reallocating scarce human resources. Other parts of the economy might be given a lifeline chance to flourish.

Some of the bailout money would have been used to support the pension plan of automotive retirees, what are more than likely already rich from years of working highly paid jobs. Why would the rest of the nation, poor included, support those rich retirees?

On the capital value argument, those automotive plants would be valued at billions of dollars. A bankruptcy would wipe out most of that capital value of those factories as well as brand value and intelectual capital. Say if another entity headed by one Joe Blogg managed to buy those factories etc at say $1billion and restart those car firms, GM, Chrysler and Ford without the cost of pension for retirees etc hanging over the neck. Given that the unemployment rate is high and Joe Blogg Car Corp can hire autoworkers at much lower rate, the new entity would be much more competitive and lean. Now Joe Blogg Car Corp could sell their cars at much lower price, because the capital cost is low, at say, $1billion, as well as lower labour cost. Development cost of the cars that Joe Blogg produce would be low too, because much of it would have been written off in the bankruptcy.

There you go, America and the world would benefit with cheaper cars. Joe Blogg Car Corp might also change strategy to produce more environmentally friendly cars that doesnt guzzle as much gas.

This article from Bloomberg
Bush Says Verdict on GM, Chrysler Aid ‘Won’t Be Long’ (Update3)
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By Jeff Green and Edwin Chen

Dec. 15 (Bloomberg) -- President George W. Bush said deliberations by his administration on whether to tap a bank bailout fund to keep General Motors Corp. and Chrysler LLC out of bankruptcy “won’t be a long process” because of the “fragility” of the U.S. automakers.

The president, traveling on Air Force One from Iraq to Afghanistan last night, said he “signaled” his administration is considering using money from the $700 billion fund. Bush said he’s “not quite ready” to announce any rescue plan.

GM Chief Financial Officer Ray Young met yesterday with administration staff seeking agreement on the size of the short- term loans, a person familiar with the talks said. A decision may not be made today, the person said. Bush is en route back to the White House today; his press office says he will arrive at 4:45 p.m. today.

Without an agreement, the world’s largest automaker and smaller Chrysler may be only weeks away from insolvency, both companies said in congressional hearings Dec. 4-5. GM is reeling from almost $73 billion in losses since 2004 and a 22 percent slump in U.S. sales this year. The automaker said last month it lost $4.2 billion in the third quarter.

Chrysler has been battered by a 28 percent plunge in U.S. sales through November, the most among major automakers.

The Bush administration agreed Dec. 12 to consider options after the Senate failed to reach a compromise on $14 billion in aid. Republicans objected to a House-passed plan that was backed by Bush.

Next Congress

GM and administration officials are still trying to agree on how much the automaker needs to survive until Jan. 6 when a new Congress takes over, the person said. United Auto Workers President Ron Gettelfinger said yesterday on CNN that he hadn’t been contacted by the White House about the negotiations.

The dispute in Congress reflects the tension between Republican senators from Southern states that have plants owned by overseas automakers, and the Detroit-based union, which primarily supports Democrats in political campaigns, in efforts to craft a federal rescue plan. The next Congress will have a bigger Democratic majority.

GM spokesman Steve Harris said last night that there was no new information on the talks. White House spokesman Tony Fratto said “we’re not going to comment on our deliberations or timing.”

GM rose 23 cents, or 5.8 percent, to $4.17 at 9:40 a.m. in New York Stock Exchange trading. Ford advanced 13 cents, or 4.3 percent, to $3.17. GM fell 84 percent this year before today, and Ford slid 55 percent. While Ford also is losing money, the company has said it isn’t seeking short-term government aid.

TARP Funds

On Dec. 12, GM Chief Executive Officer Rick Wagoner spoke by telephone with White House Chief of Staff Joshua Bolten and Treasury Secretary Henry Paulson about the automaker’s needs, a person familiar with those talks said that day.

The talks followed a statement that day by the White House that it would consider using the Troubled Asset Relief Program to help GM and Chrysler. GM Chief Operating Officer Fritz Henderson also participated in the Dec. 12 discussions.

Senator Bob Corker, the Tennessee Republican who tried to broker the failed Senate compromise legislation, said Gettelfinger wouldn’t agree to move up the timing of wage and benefit cuts as part of a bid for government aid because the union was sure the Bush administration would bail out the automakers.

Corker said on CBS’s “Face the Nation” that he is urging the White House to impose similar terms on the auto companies to force bondholders to take losses, push through management changes and get union workers to have wages “competitive” with workers at non-union plants. The House bill supported by Bush left those decisions up to a so-called car czar or oversight board.

Gettelfinger’s Response

Gettelfinger responded later, saying he never told Corker that he was counting on the White House.

“Why would we run the risk of knocking this down in the Senate if the urgency is what it is?” he told CNN’s “Late Edition” program. “I did not tell him that.”

Gettelfinger also said yesterday it was a mistake for his union to conduct a detailed negotiation with Congress on the matter.

The failure of the talks with Corker shows “we should keep the Congress of the United States away from the bargaining table,” Gettelfinger said. “The bargaining issue should be handled between the companies and the union.”

Job losses from an automaker failure in 2009 would total 2.5 million to 3.5 million in 2009, including 1.4 million people in industries not directly tied to manufacturing, according to a Nov. 4 report from the Ann Arbor, Michigan-based Center for Automotive Research, which conducts studies for government agencies and companies.

The job losses may be less than the center predicts, said Mark Zandi, chief economist at Moody’s Corp.’s Economy.com. “But over a million in the first quarter of ‘09, I think, would be reasonable to expect.”

To contact the reporters on this story: Jeff Green in Washington at jgreen16@bloomberg.net; Edwin Chen with the president in Afghanistan at echen32@bloomberg.net

my letter in malaysiakini

Economics, perception and deception
Noor Hamzah | Dec 8, 08 1:28pm
I refer to the Malaysiakini report Deputy finance minister's head in the sand.

Deputy Finance Minister Kong Cho Ha said in Parliament that “Malaysia is only feeling the pinch indirectly from the minimum impact of the sub-prime mortgage crisis cushioned by the strong domestic economy”.

Wow, that’s a mouthful. Malaysia has such a strong economic base that we are detached and independent from the goings-on in the world economy.

Klang member of Parliament Charles Santiago had this to say about it: “To say that we are detached from the world economy, is completely wrong.”

Santiago is right in saying that the deputy minister has his head in the sand. Yes, Kong has his head in the sand and purposely, too - for the government to open its eyes and take the problem head on may be too difficult.

If deputy premier Najib Abdul Razak can say that the economy is “strong” and there is nothing to worry about, and premier Abdullah Ahmad Badawi can say that next year’s growth rate is projected at 5.5 percent, what else is there to say?

Who is Kong to say otherwise, that there will be a very rough landing, soon, maybe as early as March.

Given that exports make up a large proportion of our GDP, and a large proportion of assets in Malaysia are owned by foreigners, there is no way that we are not going to be affected.

Yet there are ways to minimise the impact of economic turmoil, but only to a certain extent. I can list some points:

1. Let the ringgit fall, this way our exports will still be competitive.

2. Reduce imports and implement a campaign for import substitution - grow our own as much as possible.

3. Minimise the impact of job losses in the exports and service sector by distributing our income fairly, i.e sharing our resources by unemployment benefits, pension for older people, etc.

4. Embark on new fiscal expansion initiatives to stimulate the economy.

5. Monetary expansion, i.e by reducing interest rates to effectively ‘zero’. And make borrowing easier, so entrepreneurs can embark on profitable ventures.

6. (Much as I don’t like to suggest it) Use our foreign reserves to prop up the ringgit and to pay for imports.

the last one, number 6 is a bit confusing, contrary to the first one. what i mean is, when you let the ringgit fall, it has to be gradual, not drastic fall. to have a gradual fall, you still have to buy the ringgit here and there.

Car 30 Sept 2008

yes one day before puasa.
my Mrs went out to town to buy something, and she came home without a car. Someone 2nd car in front stopped suddenly. The car in front of her managed to brake and stopped in time. But she didnt, she hit the car in front of her. a pregnant lady, whad to be driven to hospital in an ambulance for check up... to be sure. That car was a writeoff. our car was a writeoff.

The insurance company compensate us $3500, ie the sum insured, $3800 less $300 excess.

I bought this Honda Odyssey 1995 Auto from a Briton who are going back to London. Cost us $2500.

Economics, Perception and Deception

The Deputy Finance Minister Kong Cho Ha said in Parliament “it is only feeling the pinch indirectly from the minimum impact of the sub-prime mortgage crisis cushioned by the strong domestic economy.”

Wow, thats a mouthful. Malaysia has such a strong economic base, we are detached and independent from the going on in the world economy.

Charles Santiago has THESE WORDS to say about it.

To say that we are detached from world economy, is completely wrong. Charles is right to say that the Deputy Minister has his head in the sand.

Yes Kong Cho Ha has his head in the sand... PURPOSELY.

Because to for a Govt to open their eyes, and take the problem head on, maybe too difficult for the current Malaysian Govt. If Najib can say that Malaysian economy is strong and there is nothing to worry about, and PM Abdullah can say that next year growth is projected about 5.5%...
Who is Kong Cho Ha to say otherwise, that there will be hard landing, soon, maybe as early as March. Given that export made a large proportion of our GDP, and a large portion of assets in Malaysia are owned by foreigner, there is no way that we are not affected.

Yes there are ways to minimise impact of world economic turmoil, but only to certain extent. I can just list short points here.

1. Let the ringgit fall, this way our export would still be competitive.
2. Reduce import and implement campaign for import substitution, grow our own as much as possible.
3. Minimise impact of job losses in export and service sector by distributing fairly our income, ie sharing our resources. eg by unemployment benefits, pension for older people etc.
4. Embark on new fiscal expansion initiatives - to stimulate the economy.
5. Monetary expansion, ie reduce interest rate to effective zero for example. And make borrowing easier, so entrepreneurs could embark on profitable ventures.

this last one I dont like to suggest;
6. Use up our foreign reserve, to prop up our ringgit and to pay for imports.

Here is an example from New Zealand, a Govt that try to solve the problem head on. This is monetary easing in practice.
link HERE

Rate cut - don't expect too much
Page 1 of 2 View as a single page 4:00AM Friday December 05, 2008
By David Eames
Reserve Bank Governor Alan Bollard announcing a record one and a half percent cut in the OCR. Photo / Mark Mitchell

Reserve Bank Governor Alan Bollard announcing a record one and a half percent cut in the OCR. Photo / Mark Mitchell

Lowering the official cash rate will make mortgages cheaper, but don't expect it to cushion the impact of the international financial crisis, says one banking expert.

Massey University's centre for banking studies director David Tripe told the Herald yesterday's rate cut would reduce homeowners' mortgage payments and perhaps boost business confidence in the short term, but those effects "will be not necessarily huge".

Wider economic anxieties - not least the value of the properties on which they held mortgages - would continue to worry people.

"There still ends up being a significant problem in that people are concerned about economic events.

"They are no longer in a situation where they can count on continued increases in property prices to make them feel wealthy."

Reserve Bank Governor Allan Bollard yesterday chopped the official cash rate - the bank's wholesale interest rate - by 150 points, to 5 per cent.

The 1.5 percentage point cut is the biggest since the official cash rate was introduced in 1999 and follows the previous record cut - 100 points - in October.

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The rate has not been at 5 per cent since December 2003.

The move set trading bank lending rates falling, starting with ASB which cut its floating mortgage rate from 8.7 per cent to 7.95 per cent.

Repayments on a 25-year, $300,000 floating mortgage will fall by $150 a month.

The down side is that banks will also cut the interest rate they pay on savings.

Dr Bollard's announcement came with a warning to banks to be quick in passing the cuts to borrowers.

"We expect financial institutions to play their part in the economic adjustment process by passing on lower wholesale interest rates to their customers," he said.

Dr Tripe echoed his comments, saying present levels of bank mortgage rates relative to the official cash rate and the 90-day bill rate left significant scope for a reduction.

But Business NZ chief executive Phil O'Reilly said he became "a little annoyed" hearing others trying to tell banks what to do.

"We need to be quite careful about pressuring the banks to act in inappropriate ways ... potentially making them less healthy than they are."

Mr O'Reilly agreed in principle with Dr Tripe that the cash rate reduction was "not a silver bullet" to fix the economy.

He said many people might welcome lower mortgage repayments, but they could at the same time be anxious about their jobs, and less willing to spend any mortgage savings.

"They are going to be conservative about what they do."

He described the rate cut as "helpful, but not sufficient" in itself, and said the Government needed to be "mates" with the Reserve Bank by limiting its own wasteful spending.

Rate cut - don't expect too much
Page 2 of 2 View as a single page 4:00AM Friday December 05, 2008
By David Eames

Mr O'Reilly and Dr Tripe believe consumers will probably be careful with the mortgage reduction benefits, choosing to hang on to at least some of the savings.

And the same was likely to happen with the next round of tax cuts, in April, Mr O'Reilly said.

"When mortgage rate cuts and tax cuts take place ... what you tend to find is some people spend it all, but quite a few people spend a bit and save a bit."

The Reserve Bank also hinted yesterday that further cuts could be made to the cash rate.

In its December monetary policy statement, issued yesterday, the bank said "some further, but significantly smaller, reductions in interest rates may be warranted ..."

The statement said gross domestic product was expected to have contracted further in the September quarter, the third consecutive quarterly decline.

As well, further contraction early next year was "quite possible".

Dr Bollard said New Zealand went into a "very shallow" recession early compared to trading partners, and had been in a shallow recession throughout this year.

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Though the Reserve Bank believed New Zealand's recession had ended, there would probably be "very low growth" for the next year, he said.

- additional reporting NZPA

Two Malaysian nationals killed in NZ

this news in NZ newspaper

Deceased pair were on study trip from Malaysian university
December 4, 2008, 8:59 pm


Two Malaysian nationals killed in a car accident in South Waikato yesterday were in New Zealand on a study trip.

Shafiee Bin Ahmad, 51, the driver, and Mariyam Sakinah Binti Ahmad, 21, a passenger, both died at the scene of the crash at the intersection of State Highway 1 and SH5, east of Tirau.

Senior Sergeant Murray Hamilton, of Taupo police, said initial inquiries showed that the van carrying the Malaysians ignored a stop sign on SH5 and drove into the path of the truck and trailer unit on SH1.

Two of the van's other passengers remain in Waikato Hospital in serious conditions. The other two passengers were treated and discharged last night.

The truck driver was uninjured.

Mr Ahmad was the deputy dean of student affairs at the communications and media studies faculty at the Universiti Teknologi Mara (UiTM) and Ms Ahmad was a second-year broadcasting student, the Kuala Lumpur newspaper New Straits Times reported.

UiTM assistant vice-chancellor of corporate and communications department Ahmad Redzuan Abd Rahman said the deceased were on a 10-day study trip. The group, of four lecturers and five students, left Malaysia on November 26 and were expected back tomorrow.

Minimum Wage Issue

As I said in my long ago postings, Minimum Wage is about EQUITY and ability to bargain. Those who have the much sought after skills would be able to extract most from the economy, ie get better pay. While those who are unable to bargain forcefully, or whose skills not highly valued, ends up with crumbs.

Role of a Govt is to enact laws that provide JUSTICE, EQUITY and FREEDOM for its citizens.

MINIMUM WAGE is about EQUITY.

You judge for yourselves, if the performance of Malaysian Government if dismal at best, or a total failure.

HARSH WORDS, but someone has to say it.

I have cut and pasted this letter from Malaysiakini.

Minimum wage now!
Michelle Lee | Dec 4, 08 4:15pm

I refer to the Malaysiakini report No minimum wage as yet.

Like many comfortable desk-bound employees, I often take for granted that there is no pungent smell of unwashed toilets floating around in the office. I take for granted that the dustbin in my room is emptied daily.

And mostly, I take for granted the men and women who are as essential to the company, as the managers, the supervisors, the officers and the clerks.

I was chatting with Kak Nur last week, at the end of a long day. I knew she worked two jobs, one as a cleaner with the company during the day, and the other making sushi during the night.

For her labour in the two jobs, totaling an ungodly 15 hours a day (enough to make any grown man faint from exhaustion) she takes home RM900 a month: RM600 from the day job, and RM300 from the night job.

I assumed she was unmarried. Who would have time or energy left? But I was wrong. She had three children. The youngest was just a year old. And to top it off, her husband had just left her six months ago, which was the driving reason for her taking up the second job.

I wanted to empty my bank account for her, but I knew that could not be the answer. The poor do not need perpetual hand-outs that make us feel good about ourselves, but which do nothing for their next generation, and the generation after them. We need policies that work for them.

One such policy which I believe is long overdue, is a minimum wage framework. Because when we allow private companies to pay pittance, we demean the work of another’s hands. By allowing it to go on for as long as it has, we have inevitably demeaned their personhood.

And we continue to scorn their dignity by saying that they are not worth that much. We say to them that they are negligible. That they are of little, or no value at all.

This is happening right here, in a multi-national company in the heart of Kuala Lumpur. I know for a fact that this is being replicated a thousand times over here in the city, and a hundred thousand times over in the rural areas, where plantation workers, tea leaf pickers and rubber tappers break their backs and give their lives for less than RM500 a month.

Minimum wage is not an ‘ideal policy’. It is a necessary policy that must be put in place to act as a check and balance on capitalism, which if left unregulated will and has manifested into uncontrolled greed, where the poor cannot afford a RM3.50 meal, and the rich pay RM200,000 for a two-seater sofa set.

So I say to this government and to the human resources Ministry, gor goodness’ sake, if you want to regulate something, regulate the right things. Impose a minimum wage now, because relying on the conscience of Big Business isn’t going to take the thousands of Kak Nurs out there very far.

And please, stop mouthing ridiculous statements like ‘Implementing minimum wages is not feasible’. Not feasible for whom? The Federation of Malaysian Manufacturers? The Malaysian Employers Federation? I don’t think Kak Nur would have a problem with it though.

Finally, to you, the populace, who sit comfortably in your swept rooms. The tea-lady and the cleaner whom you meet everyday, her labour is as essential as yours is. Do not demean him or her by remaining silent.

Jerit, an NGO that has been petitioning for a minimum wage since the 1990s, recently launched a cycling campaign starting from Alor Setar and which will culminate in the handover of a memorandum to the prime minister on Dec 18.

Their goal is to raise awareness on the need for a minimum wage policy along the way. If you can’t cycle, go adopt a cyclist now.

Each of us can only do so much by giving hand-outs to individuals. One voice alone, while good, may not be as effective. As history has taught us, our government is a little hard of hearing. It took a collective jerit on March 8 to (hopefully) knock some sense in.

What is now needed is another jerit for those with no voice, a jerit for the implementation of a necessary policy to empower the poor, and to restore their dignity by affirming the worth of their labour.

My letter in Malaysiakini

link here
Wait a minute, can S'gor enact minimum wage law?
Noor Hamzah | Dec 2, 08 4:48pm
I refer to the Malaysiakini report No minimum wage as yet.

There has now been a proposal for RM1,000 minimum wage for Selangor. What are the implications? It would be good for Selangor, that’s for sure.

There are millions of Selangor residents currently earning less than RM1000 and some even less than RM400 a month. Just go to rural Selangor for example, and ask around.

Ask those pretty shop assistants wearing the tudung at the local mini markets in Tanjong Karang or Sungai Besar how much they earn in a month and most would readily say it’s RM400 a month.

Those who earn more than RM1,000 a month would probably be a supervisor. A manager would get about RM1,500.

If you work in the Klang Valley, then I’m sure that a factory worker’s basic monthly wage is about RM700 to RM800. Supplemented with lots of overtime, sometimes working 70-80 hours a week, then a factory worker could bring home over RM1,000 a month.

That’s a lot of money.

What if the Selangor government manages to enact a law requiring employers to pay at least RM1,000 a month? Let’s not get into the argument whether the Selangor government can pass a law stipulating a minimum wage of RM1,000 in Selangor.

They will have to go through that hurdle first. What is the scope of Selangor state assembly? Can they pass a law requiring a minimum wage fo RM1,000 for their citizens?

My prediction is that a lot of employers would want their employees earn their RM1,000. So if an employee's work is currently worth RM500 a month, the employer would formulate a new strategy so that the employee's work would be valued at more than RM1,000. Otherwise, why bother employing anyone?

Two strategies can be implemented - either charge more for services and/or products, or make the employee work harder. Both suggests increased efficiency in the economy. An efficient economy adds value, increases GDP and everyone would be better off in the long-term.

So, in the short term, we would see a lot of workers lose their jobs because Selangor employers wouldnt need as many workers as before. Incidentally, Selangor has the largest number of immigrant workers, legal or illegal, from Indonesia, Bangladesh and India. If enforcement is lax (for enforcement of the minimum wage), local workers would simply lose their jobs to their immigrant counterparts.

I would like to think positive.

That enforcement of the minimum wage is fair and being carried out. That workers, irrespective of whether they are local or illegal/legal foreigners get the same treatment, ie, they getat least the minimum wage of RM1,000 for a 48-hour week. (or is it a 40-hour week now?). And that local workers ie, Malaysians are given preference over foreign workers.

Soon, there will be no shortage of labour in Selangor. Malaysians from all over the country, who were previously badly paid elsewhere, would migrate to Selangor. And with a basic wage of RM1000, the hourly rate for overtime work would also be higher.

Given chance to do overtime, they would bring home RM1,500 or more. And the flow-on effect would resonate throughout the state’s economy as higher income would generate higher spending which would also lead to higher leisure spending.

Granted, all thing being equal, there would also be a higher GDP growth for Selangor. Higher income in the long run. The rural base in Selangor would benefit the most. Because most people living in the rural areas have their own land to grow some of their needs, and won’t have to pay rent, because they build their own houses. They also save a higher proportion of their income.

The question is still: can Selangor enact a law on minimum wage

RM1000 minimum wage for Selangor; What is the implications?

It would be good for Selangor, sure.

There are millions of Selangor residents currently earning less than RM1000, some even less than RM400 a month. Just go to rural Selangor for example, and ask around, ask those pretty shop assistants wearing tudung at local mini market in Tanjong Karang or Sungai Besar, how much she earns in a month, most would readily say its RM400 a month.
Those who earns more than RM1000 a month would probably be a supervisor. A manager would get about RM1500. If you work in Klang Valley then I would be sure that factory basic monthly wage is about RM700 to RM800. Supplemented with lots of overtime, sometimes working 70-80 hours a week, then a factory worker would bring home over RM1000 a month.

Thats a lot of money.

What if the Selangor Govt manage to enact a law requiring employers to pay at least RM1000 a month? Lets not go into the argument whether Selangor Govt CAN pass a law stipulating minimum wage of RM1000 in Selangor. They have to go through that hurdle first. What is the scope of Selangor DUN? Can they pass a law requiring minimum wage fo RM1000?

My prediction is a lot of employers would want their employees earn their RM1000. So if an employee's work is currently worth RM500 a month, the employer would make a new strategy so that the employee's work would be valued more than RM1000. Otherwise why bother employing anyone? Two strategies can be implemented, either charge more for services and/or products, or make the employee work harder. Both suggests increased efficiency in the economy. An efficient economy adds value, increase GDP and everyone would be better off in the long term.

So in the short term we would see a lot of workers lost their jobs, because Selangor employers wouldnt need as many workers. Incidentally, Selangor has the largest number of immigrant workers, legal or illegal from Indonesia, Bangladesh and India. If the enforcement is lax (enforcement of the minimum wage), local workers would simply lose their jobs to their immigrant counterparts.

I would like to think positive.

That enforcement of the minimum wage is fair and carried out. That workers, irrespective of whether they are local or illegal/legal foreign get the same treatment, ie they get the at least minimum wage of RM1000 for 48 hour week. (or is it 40 hour week now?). And that local workers ie Malaysians are given preference over foreign workers.

Soon there will be no shortage of labour in Selangor. Malaysians from all over the country, who are previously badly paid would migrate to Selangor. And with basic wage of RM1000, the hourly rate for overtime work would also be higher. Given chance to do overtime, they would bring home RM1500 or more. And the flow on effect would resonate through the economy, higher income would generate higher spending, which would also lead to higher leisure spending.

Granted, all thing being equal, higher GDP growth for Selangor. Higher income in the long run. The rural base in Selangor would benefit most. Bacause most people living in rural areas have their own land to grow some of their need, and doesnt have to pay rent, because they built their own houses. They also saves a higher proportion of their incomes.

The question is still:
CAN SELANGOR ENACT A LAW ON MINIMUM WAGE?

We May Have Reached The Bottom

I believe we may have reached the bottom, on the economic front. The fiscal stimulus by Govts all over the world has been succesfull in shoring up confidence in the economy.
Some economies has gone so far as lowering the interbank interest rate to ZERO, effectively. (If the Reserve Bank set the interest rate at, say 2.00 percent, and inflation rate for the country is also 2.00 percent, then that is zero effective rate)
We have seen that in Japan for a few years already. The Japanese Govt has been trying ro wake up their moribund economy. Now USA has Federal Rate at 2 something percent. Australia has lowered their interest rate to 5 something percent, and lower again in the next review. The same can be said of New Zealand. RBNZ is expected to cut the headline interest rate by 150 basis point, ie 1.5%.

Malaysia has cut interest rate to 3.25% a few days ago. A sure sign that deflation is utmost in their minds of the bank governors.

Yes when I see zero percent, and fiscal stimulus hand in hand, I am more confident in the economy.
True some sectors are experiencing bad times, like real estate and construction sector. But if you stick to essential consumer products for the time being, you would be safe. Everyone eat, and wear clothes, thats basic.

Let me highlight one stock that I have been watching.

AFFCO Holdings Limited Ordinary Shares (AFF)
Summary Charts Dividends News Announcements Price History Related Securities As at 6:15 pm, 28 Nov (20 min delay)
AFF 0.400 0 (+0.00%)
AFFCO Holdings Limited Ordinary Shares
As at 6:15 pm, 28 Nov (20 min delay) Bid 0.430 Volume 0
Ask 0.490 Value ($NZ) 0
Last Price ($NZ) 0.400
Change 0 P/E 6.82
Prev Close 0.400 EPS 0.059

Open Total Div Paid (last 12 calendar mths) 0.000
High Next Div Pay Date
Low Div Yield 0.000
Status
52-wk High 0.610
52-wk Low 0.320

Now the shares is selling around 40cents NZD. Giving Market Capitalization of around NZD200millions. Last years sales revenue was over NZD1billion. And profit of NZD60millions.
At that price of 40cents, its P/E ratio of 3+

Yeah, that cheap. furthermore the company product, lamb amd beef meat products are getting higher prices.