Is Malaysia located in another planet? Are we talking about planet earth?

Under the backdrop of the current global financial crisis which is originated from the US and spread to the Europe and now starting to affect the other parts of the world including Asia.A simple analysis of Malaysia 2009 economic outlook from the perspective of an ordinary working man.

As we all know that Malaysia’s major revenue sources are from the export of the crude oil and crude palm oil, specifically the crude oil export contributed nearly 40% to 46% to the nation’s revenue.

The US is still the leading export market of Malaysia, followed by European Union, South East Asia and the fourth is Japan.Overall manufacturing products accounted for 75 percent of Malaysia's total exports followed by crude oil and other minerals at 14 percent and agricultural products at 9.5 percent, as at 31 December 2007. While the exports of electrical and electronic goods accounted for 44 percent of total exports, with the US is the biggest consumption market.

For the last two weeks, the stock markets worldwide had been experiencing the severe bottomless spiral southwards. Malaysia’s Kuala Lumpur Composite Index , year to date, had been tumbling more than 30% since the early of the year 2008.

What the above statistics tell us?

As at 11 October 2008, the global crude oil price was tumbling to below USD 80.00 per barrel as compare to its record high of above USD 140.00 per barrel, while the crude palm oil price was recording below RM 2000.00 per tonnes for December 2008 order as compare to its record high of above RM 4000.00 per tonnes. This means that the country is going to experience the budget deficit if the government is not intending to review its already presented 2009 National Budget. We must be questioning where would be the funding sources for the mega projects such as the Iskandar Malaysia (formerly known as Iskandar Development Region or IDR) and the other Economic Corridor Region?The Iskandar Malaysia and the other Economic Corridor Regions had been hailed as the major engine of the Malaysian economic growth in the future.

The consumers' confidence level in US and the Europe had been dipped into the decades low following the subsequent collapse of their banking and financial institution. This will have huge impacts onto our export. With the external demand reducing, the manufacturing companies will abandon their existing expansion plan and tightening their budget. While the fear of massive manpower laid-off in the manufacturing sectors will soon dominate the Malaysian market. Then the possible rising of the unemployment rate will certainly pose a significant impact to the social instability which had been ailed by the political instability since Malaysian historical 308 political Tsunami.

The severe bearish market had dampened the households’ confidence level and their spending sentiment. They will finally tightening their belts and cut back on consumption. Hence, the slow growth of the domestic consumption.

With the internal and external negative development, we might tend to ask where the country’s economy is heading to?

The globalization seeds had long been taken root in this world for decades. This means, nowadays, the economies of the countries across the continents, in breadth and depth, are interconnected and interdependent.

Yet lately, we still heard our country’s leaders unanimously expressed confidence that Malaysia’s economy is still resilient given the current global financial crisis. They boasted that the country have a stronger economic fundamentals, sufficient foreign reserves and sound financial and banking system.

Hullo, Is Malaysia located in another planet of the universe? Not in planet earth?