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| In the really, really rural hardcore poor, even children have to help make ends meet for their families |
If Singapore can start worrying about its domestic and global economy, Malaysia should be prepared for the worst.
With a federal debt that may have exceeded RM1 trillion due to the mounting 1Malaysia Development Berhad (1MDB) borrowings and interest obligations, even with the current 6% Goods and Services Tax (GST), 1MDB Prime Minister Najib Razak’s Umno-led Barisan Nasional (BN) federal government is still struggling to keep its administration afloat.
If not, how else to explain the “cash flow” woes of ministries and government departments, the lay off of workers in the private sector, including banks and multi-national companies (MNCs).
Malaysians will, therefore, need to take drastic prudent measures to tighten their belts to sit out the economic downturn which no one can predict when it will ease.
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| Feeding the poor |
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| A fast shrinking Ringgit that some financial analysts predict could hit a low of RM5 to US$1 |
Here are three reports for No News Is Bad News visitors and readers to digest the serious global concerns that will no doubt hit Malaysians and Malaysia extremely hard:
"S’pore bankers worry as layoffs start to mount
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| ANZ has laid off some of its employees in Singapore over the past year. Banks around the world have been shedding jobs against the backdrop of a weak economic outlook. Photo: Reuters |
BYANGELA TENG
angelateng@mediacorp.com.sg
PUBLISHED: 4:00 AM, OCTOBER 6, 2016
UPDATED: 11:15 AM, OCTOBER 6, 2016
SINGAPORE — Just three months into his new job at a big European bank in Singapore, Christopher (not his real name) is looking nervously over his shoulder at work: People around him are here one day and gone the next. The mood is stressful, he said, and it does not help that those who have escaped the pink slip have to pick up the slack. He has been putting in 12-hour days, compared with nine to 10 hours previously.
Likewise, Margaret, who works in a Singapore bank, said the mood at her office is sombre. She recently requested a transfer from sales to a middle office role to improve her job security.
“I have a few front office colleagues who were asked to leave within my few months in this new office. But it was not from my team. I guess they were not bringing in the sales they were supposed to. I was on leave on a Monday and when I came back on Tuesday they were not there any more. Those in the back office such as operations and settlements, should be more worried as those jobs are most likely to go first,” said Christopher, who joined his current employer three months ago from another foreign bank. Christopher is in his 30s, works in a middle office role and earns a fixed salary of more than S$60,000 a year.
“It is quite stressful. We all know that banks are cutting costs. I think twice about everything I do now: ‘Is this action going to put me in a compromising position’ or ‘Will I be on the chopping board if I do this’. I will constantly be thinking for myself,” he added.
Margaret, who is in her late 20s, said: “I switched from the frontline to middle office for stability as I do not foresee myself working in sales in the long run … There may be a few sighs here and there in the office but I think people in this sector have learned to work through it. It is just like any other times (in life) when the odds are against you.”
Banks around the world have been shedding jobs against the backdrop of a weak economic outlook, volatile markets and stricter capital rules that have eroded earnings. The push for digital transformation has also eroded the need for some jobs.
Australia and New Zealand Banking Group, Barclays and Standard Chartered Bank have let go some of their employees in Singapore over the past year. While some bankers brushed it off as a cyclical downturn, others are worried that technological disruptions could result in permanent job losses.
“It’s quite scary if it would be me (to be retrenched). I would ration the money, spend it wisely and probably build up my skills set. I have to plan ahead: What if I am 45 and do not have a new job? However, some of my friends who were retrenched were quite happy with the payout. If you are getting retrenched and you have a few years of experience, you will get six to eight months of payout,” said Christopher.
Technology advancements such as Internet and mobile banking have increased convenience for customers, but put a strain on the rice bowls of bankers.
Mr Ng, a UOB banker specialising in financial advisory services, said that there are fewer walk-in customers now, affecting his commission from sales. “With the introduction of Internet banking, many don’t see a point in making a trip down to the branch. I have not earned less, but that is because I work harder during bad times to make up for it,” he said. Mr Ng earns about S$50,000 to S$70,000 a year, depending on performance.
Ms Lee, who works in PR for a local bank, added: “In the short term I have no fear of being obsolete, but in the longer term, I am. The banking industry is changing so quickly with technology and I feel that in order to keep up I would need to broaden my skills set.”
Other segments of the financial industry are also feeling the heat. A financial adviser, who wished to be known as Mr Lee, said his clients are worried about their jobs and less willing to buy investment policies.
“People are taking a longer time to consider insurance products. They are not sure how long they can retain their current jobs, and are uncertain of their future. It used to take a couple of weeks to clinch a deal but now it takes a few months,” said Mr Lee, whose clients are mainly working professionals in their 30s to mid-40s.
Despite the worry on many people’s minds, the usual bustle of the Central Business District has not seen a dwindling down in activities. At Raffles Place, the queues at moneychangers and eateries are still long during the day, and come sunset, colleagues drink late into the night at nearby pubs.
Not everyone is downbeat about the current market uncertainty. Claudia, who is in her early 20s, quit her banking job to join a brokerage firm a few months ago. She describes the current situation as “the exciting times”.
“The economy is bad now but it is not my concern. I took a slight pay cut to join a trading company as I heard about the potential of the commission. In my opinion, this is a good time to enter the down market and take the chance to earn a lot of money,” said Claudia.
Likewise, a director in a foreign bank with 15 years of experience in the industry, said he has experienced the various cycles to hit the finance sector, and that they are simply part-and-parcel of working in this industry.
Requesting anonymity, the director, who said he earns about S$250,000 a year, does not expect his pay to be affected despite the lean times. “There will be business to make, whether it is in good or bad times. Even though I do not expect exceptional results for this year, we will still be able to ride through this patch,” he added."
"Slow global growth may bring on protectionism: IMF
By Chen Weihua (China Daily)Updated: 2016-10-06 08:59
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| People walk past a money exchange decorated with different currencies in Hong Kong, June 27, 2016. [Photo/IC] |
In its October 2016 World Economic Outlook, the IMF forecast global growth at 3.1 percentthis year and 3.4 percent in 2017, the same as it predicted in July, shortly after Britain's voteto exit the European Union.
The pickup in 2017 will be driven mainly by emerging markets, the report said.
The outlook report marked down its growth prospects for advanced economies, while markingup those for the rest of the world. But 2017 prospects for both country groupings remainunchanged.
"Taken as a whole, the world economy has moved sideways," said Maurice Obstfeld, chiefeconomist at the IMF, at a news briefing on Tuesday morning in Washington.
The IMF report expressed concern that persistent stagnation, particularly in advancedeconomies, could further fuel populist calls for restrictions on trade and immigration. Obstfeldsaid such restrictions would hamper productivity, growth and innovation, citing the examplesof Britain's vote to leave the European Union and the anti-trade rhetoric of the US presidentialcampaign trail. Such things create uncertainty for investors, he said.
"It is vitally important to defend the prospects for increasing trade integration," he said. "Turning back the clock on trade can only deepen and prolong the world economy's currentdoldrums."
The IMF predicts that China's economy, the world's second-largest, would grow 6.6 percentthis year and 6.2 percent in 2017, down from 6.9 percent last year.
It said policymakers in China will continue to shift the economy away from reliance oninvestment and industry toward consumption and services, a policy that is expected to slowgrowth in the short term while building a foundation for sustainable long-term expansion.
But it said the government should take steps to rein in credit that is "increasing at adangerous pace" and cut off support for nonviable State-owned enterprises. China shouldaccept the associated slower GDP growth, the report said.
The IMF also forecast that India's GDP would expand 7.6 percent this year and next, thefastest pace among the world's major economies.
It forecast the growth of emerging markets and developing economies to speed up this yearfor the first time in six years, to 4.2 percent, slightly higher than the July forecast of 4.1percent."
"Start of China's coercive diplomacy towards Singapore
Feng Zhang For The Straits Times
PUBLISHED
OCT 6, 2016, 5:00 AM SGT
Global Times, published by Chinese Communist Party mouthpiece People's Daily, recently ran an article accusing Singapore of raising the South China Sea disputes at the Non-Aligned Movement (NAM) Summit held in Venezuela on Sept 18. Singapore's Ambassador to Beijing Stanley Loh wrote to refute this. Global Times editors and Chinese officials then weighed in. What is at stake in this spat? In the first article, a Chinese academic says the issue points to Beijing's pent-up frustration with Singapore. In the second article, a Singaporean academic lays bare the politics of retaliation.
The recent diplomatic dispute between Singapore's ambassador to China and the Global Times newspaper is highly unusual in the history of China-Singapore relations.
It is not, however, an extraordinary event from the perspective of recent Chinese policy towards the South China Sea. Nor is it surprising given the overall direction of China's foreign policy this year.
Understanding what's at stake - and, in particular, getting right the signal Beijing is trying to send - will be crucial for the two countries to steer the relationship on a steady course and prevent it from further deterioration.
Singapore's ambassador to Beijing Stanley Loh wants the Global Times, the Chinese government and people, and perhaps also the outside world watching how China treats a small power like Singapore, to appreciate the truth of the matter and refute the Global Times' accusations.
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| Mr Stanley Loh, Singapore’s Ambassador to China. PHOTO: MINISTRY OF FOREIGN AFFAIRS |
In his response to Ambassador Loh's first letter, Mr Hu Xijin, editor-in-chief of the Global Times, does defend the accuracy of the report. But that passing defence stands in striking contrast to a substantive interpretation of Singapore's position over the South China Sea - almost appearing as a stern lecture on how Singapore should behave itself.
Ambassador Loh, in his second letter, replies that the political points Mr Hu makes are not relevant to the issue of the veracity of the Global Times report. He is correct technically, but quite wrong politically.
If Singapore is unable to grasp what's at stake in the dispute, it would bode ill for the Singapore-China relationship.
Whatever the Global Times' initial motivation for running the story, it is beyond doubt that the gist of the report has the backing of the Chinese government. Thus, when responding to a question about the dispute, a spokesman from China's foreign ministry declared unambiguously: "It is a clear fact that a very small number of countries insisted on playing up South China Sea-related contents in the NAM Final Document."
On whether this incident is going to affect China-Singapore relations, this spokesman emphasises that the two countries should mutually understand and respect each other's core interests and major concerns.
The spokesman avoided the question of whether Singapore raised the South China Sea or the tribunal ruling at the NAM summit - a factual question of fundamental importance to Ambassador Loh.
But this omission speaks volumes about China's attitude. From Beijing's perspective, what's at stake in the dispute is not so much truth as a factual matter as political arguments based on convenience for venting China's cumulative grievances against Singapore this year.
Ambassador Loh wants to address the dispute as a simple, verifiable factual issue. But for China, it's politics from the start. Even if Singapore did not raise the South China Sea issue at the NAM summit, the mere fact of its activism on Asean's behalf to update the South China Sea-related paragraph in the NAM Final Document is provocative enough for a pent-up outburst.
To put it bluntly, Beijing is not so much interested in getting the record straight as in sending a diplomatic signal that it wants Singapore to understand. The signal is essentially this: know your place and don't mess with us in the South China Sea.
The Chinese media's treatment of facts may be cavalier, but the perception that Singapore is siding with the United States, the Philippines and Vietnam in opposing China, and thus overreacting in the South China Sea is now widespread inside China.
From two Singapore senior diplomats' accusation of China's attempts to split Asean in April, to the failure of its foreign minister to appear at a joint press conference with the Chinese foreign minister at the special China-Asean foreign ministers' meeting in June, to Prime Minister Lee Hsien Loong's description of the South China Sea arbitration ruling as "a strong statement" in August, Singapore appears to keep provoking China - or at least that is the viewpoint of some in Chinese quarters.
In this kind of political environment, the argument that Singapore is only adopting a principled position lacks credibility to those who think Singapore is taking sides. Many Chinese policy elites now agree that Singapore has already chosen its side over the South China Sea issue - against China - and that it must pay a price for damaging China's interests.
It is thus not surprising that Beijing is now beginning to apply a sort of coercive diplomacy to pressure and even punish Singapore into acquiescing with China's position. The NAM incident is the culmination of the deterioration of China-Singapore relations this year, but it is only the beginning of a new Chinese approach of coercive diplomacy towards Singapore.
The Chinese may think that this approach may compel Singapore to succumb, but it might well backfire by driving it further towards the US. Regardless, Beijing wants Singapore - and perhaps other regional countries as well - to understand that the rise of China has reduced these countries' manoeuvring space between China and the US.
The underlying signal is that it is now time to come to terms with the reality of Chinese power and accommodate its interests or otherwise face consequences.
The Global Times' report, regardless of its veracity, is nothing less than an explicit warning and bashing of Singapore's activism on the South China Sea issue. For Singapore, that must be an essential takeaway from this incident, however it disagrees with the Chinese approach.
· Dr Feng Zhang, a Chinese national, is a fellow in the Australian National University's department of international relations and an adjunct professor at the National Institute for South China Sea Studies in China.
A version of this article appeared in the print edition of The Straits Times on October 06, 2016, with the headline 'Start of China's coercive diplomacy towards Singapore'. Print Edition | Subscribe"
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