WORLD HERITAGE DESTINATION

WORLD HERITAGE DESTINATION

Friday, June 30, 2017

A personal opinion on Malaysian Productivity relating to Low Ringgit valuation.

Time for another Gunabalan's Musings and Travails update-


This posting is specific to the large corporations and their ilk whose inventory purchases can run into millions. Consulting the HR's in MNC's locally, certain point of views are deemed negatively if we are not able to back up our positions with raw data that correlates what we say. 

So, to that effect, it sometimes demands more research and P.O.V discussions to be made before a certain position can be cast in cement.


Right now, many company owners and boards seem to be under the impression that labor and automation is the crucial broken link that is mitigating Malaysia's rise up the productivity and profit ladder. It is of course imperative that as a nation we move forward in productivity increase needs but just importing current software and machinery is not going to do it, i'm afraid.( its just doing the opposite effect monetary wise to the Ringgit value as it invites imported inflation to effect our core inflation-and the current account balance sheets).


We need to up our scope of high level thinkers in our management teams too. 

Right now, my humble perspective is that application of the PETER PRINCIPLE is in play in many companies mainly because its a been a way of previous cost cutting and/or budget constraint results. 

I personally belief this is the case as i show below:
FACT 1: Labor Productivity in Malaysia is High.
At the mid-point of the 11th Malaysia Plan (11MP), Malaysia Productivity Corporation (MPC) has launched its 24th Productivity Report 2016-2017, indicating that the nation’s labour productivity has grown by 3.5% in 2016 to RM78,218 from RM75,548 in 2015.
This rate was about 85% of the 11MP’s target of RM92,300 to be hit by 2020, despite the nation facing challenges such as a weaker ringgit, lower business confidence, financial market volatility resulting from the “likelihood of protectionist tendencies by certain developed countries,” said the report.
Growth in Malaysia’s GDP of 4.2% at RM1.1 trillion was driven by the growth of labour productivity rather than employment, indicating that growth is gradually moving away from labour intensity and shifting towards digital and technology-driven factors. 
This is the intended pattern for a productivity-driven economy, where productivity is the key factor to breach the frontiers towards Industry 4.0,” as cited in the report.
Two top sectors that contributed to the growth were manufacturing with a productivity level of RM106,647 (+1.4%) and services at RM68,166 (+2.8%).
“The agriculture sector registered an improved growth of 3.4% at RM55,486 compared with -2.3% in 2015,” Mustapa said when launching the Productivity Report 2016/2017 in Kuala Lumpur on Wednesday.
The report, themed Challenging the Frontier, Empowering People, was published by Malaysia Productivity Corp
You can access these data here:  http://www.humanresourcesonline.net/malaysia-achieves-85-of-the-labour-productivity-target-for-11mp/
FACT 2: In cases where labor Productivity is already High, any inefficiency detected must therefore fall on Management.  

Research study conducted by National Bereau of  Economic Research measured the behavior of 1,114 CEOs in Brazil, France, Germany, India, UK and US using a new methodology that combines:

 (i) data on every activity the CEOs undertake during one workweek and 
 (ii) a machine learning algorithm that projects these data onto scalar CEO behavior indices.


http://www.nber.org/papers/w23248

It is worth summarizing that the productivity loss generated by inefficient assignment (or time spent managing) is equal to 13% of the productivity gap between high- and low-income countries in these samples.

In short, this report proves that 13% of the productivity difference between rich and poor countries is due to having roughly 17% of CEOs in poorer countries not spending their time properly (relative to their industry). They obviously are either mismatched in their positions or are political appointees.

And people think (productivity) is only about automation and AI.

Linking this correlatedly to the matter of monetary value, in matters of Inflation and Monetary Value the current charts from Core Inflation Index DOSM (index numbers, log annual changes; 2010=100) shows very, very clearly the impact that GST caused to the inflationary spike.

GST causes an upward shift in the price level of Goods and services, but didn’t cause inflation (as narrowly defined by economists) to rise. 

It was purely a price level change, and didn’t change the slope of the index. The impact appears to be a roughly 1.8% peak to trough increase in the price level, in line with the MOF/BNM forecast.

Core inflation is currently appearing to accelerate, but that can’t be ascribed to the imposition of GST, which after all happened exactly two years ago.


01_sales
Data for 2016 shows Manufacturing Sales actually outran Forecast

01_core



NOTE: DOSM’s core inflation index excludes both highly volatile prices (certain seasonal foods such as vegetables) as well as petrol prices (which have been very volatile since the float in 2014). It also excludes prices of goods that are “administered” i.e. those whose prices are either fixed by the government (e.g. rice), or move due to changes in government tax policies (e.g. tobacco and alcohol). Therefore a presents a truer picture of underlying price pressures in the economy. Note that this doesn’t mean stuff doesn’t get more expensive, it just takes away the volatility in inflation, which makes it more useful for policymakers such as BNM.

Charts and data from : Hishamh of econsmalaysia blog.



FACT 3 : Productivity and GDP is correlational to Ringgit valuations

So, in short, collective inept management seems to submit the rationale of where Malaysia's weak chain link in productivity increase seems to be.

This is an important mind shift we need to confront because GDP is related to Monetary Valuation. 
So,unless:
  1. The Ringgit strengthens considerably with super GDP results ; and/or
  2. Oil prices fall back significantly (say, below USD40)
…we’re going to see some pretty strong headline inflation numbers for years to come, before it normalizes in 2020. ( and it can actually be controlled since the charts prove this inflationary rise is due to COST PUSH factors ie imported Inflation).

The big Question we must ask ourselves is:
Why bother about productivity or even Inflation / Money valuations? 

Because these indicate a symptom. 
A malaise, if you will that retards the overall opportunity costs with regards to our lifestyle. It explains how non observance of our strength and weaknesses exposes this society to fallibility and growth limitations in the future.

For instance , did you know that;
One Malaysian economic indicator is raising red flags
OF all the statistics trotted out to show the health of the economy, one indicator is causing some concern among economists, who said it spells trouble for every Malaysian over the long term.
The current account balance is a gauge for the state of the economy and if it goes into a deficit for an extended period, it affects everything from wages to the price of vegetables.
Malaysia’s current account balance still shows a surplus but the bad news is that it has been declining steadily from 2014.
Economist Ali Salman said that the surplus dropped by more than half or 57.75%, from the fourth quarter of 2016 to the first quarter of this year.
If this decline is not addressed, it will mean years of tepid growth and hit the pockets of ordinary Malaysians. Economists said these are among the impacts of a declining surplus:
  • It makes it harder to create new jobs and sources of income for citizens thus, curbing their spending power.
  • It saps investor confidence, which can then weaken the ringgit.
  • A weak ringgit would make imports, such as food and goods, more expensive and drive up supermarket prices.
  • The worst part is that the above factors can compound and feed off each other, thus, leading to slower overall growth.
As i've repeated above, knowledge of these things can help us change the course of our future.

Saturday, May 13, 2017

MTA Annual General Meeting in May 2017

A pictorial entry. The recently concluded AGM was well received and well conducted. It's full quorum attended by the 88 members reps and high tea that was attended by BPP & Tourism Malaysia dept heads bodes well for its status as the leading Tourism Player association in Melaka.





























Thursday, March 30, 2017

Hard Rock Cafe Melaka‎Live Showcase - Lestari, F.O.R, Heaven & Zero In

























Night Rhythms is in the house!! Don't forget to catch them rocking our stage at 9.30 p.m. tonight! 
Let's Rock This Way!



























































An irresistible dish with all the power of hard rockers. Juicy cut of beef on the grill, butter, mashed potatoes and vegetables. New York Strip Steak, perfect for this Thursday! 








































Wednesday, March 29, 2017

Friday, March 17, 2017

Letter from Bahagian Promosi Pelancongan Melaka



To: All MTA Members,

Re:       “Jemputan Penyertaan Pameran World Travel Fair 2017 Shanghai, China 20-23 April 2017"

With reference to the attached letter from Bahagian Promosi Pelancongan Melaka (Tourism
Melaka ) pertaining to the above program which is self-explanatory for your attention and action.

Members who are interested which is on first come first served basis, kindly forward your participation form directly to Bahagian Promosi Pelancongan (Tourism Melaka) Melaka on or before 16-3-2017 and extend a copy of your participation to us by e-mail : mtamkz@hotmail.com for our information.



Please contact Pn Lim Swee Kiang at hp 012-638 2099 or email: Isksweekiang@yahoo.com if you have enquiry.

Thank you.

Best regards
Ms Cheong
Secretariat
Persatuan Pelancongan Negeri Melaka
(Malacca Tourism Association)
No.4281-C, Jalan Mawar
Bukit Baru, 75150 Melaka
Tel: 06-2848234 Fax:06-2818408
Email:mtamkz@hotmail.com
www.malaccatourism.com
General Health Check-up Package  At Pantai Hospital Ayer Keroh, Melaka

Pantai Hospital Ayer Keroh is promoting its General Health Check-up Package, in conjunction with International Women's Day celebration, until 31-3-2017. 

The RM258 package includes a thorough physical examination and report, a comprehensive blood, liver and renal test, a chest x-ray, an ECG and two cancer tests-CEA and AFP.
In addition to this, without forgetting the men above 50-years-of-age, this test is also applicable for you, including a prostate cancer test (PSA) in the package for only RM278.


Those interested please refer to the attached poster for more details.  Please contact the Health Screening Centre  at 06-231 9999 ext. 2130 if you have any enquiry.

Live Music Showcase - Lestari, F.O.R, Heaven & Zero Inc.

Re: Live Music Showcase - Lestari, F.O.R, Heaven & Zero Inc. At Hard Rock Café, Melaka On 9 April 2017 (Sun)

Please be informed that Hard Rock Cafe is having Live Music Showcase -   - Lestari, F.O.R, Heaven & Zero Inc. as follows:-

 Venue : Hard Rock Cafe Melaka
 Date    : 09th April 2017 (Sunday)       Time   : 4.00pm onwards
 Ticket : RM50.00





 Please refer to their attached poster for more details.  For online ticketing & reservations, please do not hesitate to email to them at enquiries@hardrockcafe-melaka.com or contact  them at +60 6-292 5188.
  

To: All MTA Members


 Re: Update of members' promotions and activities at MTA Facebook and website

We would like to request members to forward us any promotions of your product or update of your organization’s activities which we can blast to our members through our email and update at our website:www.malaccatourism.blogspot.com. or www.facebook.com/MelakaTourismAssociation.   

Please do not hesitate to contact me at H/P: 017-681 3901  if you have any enquiry.

Thank you and kindly give your support.

Best regards
Miss Cheong
Secretariat
Persatuan Pelancongan Negeri Melaka
(Malacca Tourism Association)
No.4281-C, Jalan Mawar,Bukit Baru, 75150 Melaka
Tel: 06-2848234         Fax:06-2818408
Email:mtamkz@hotmail.com,  www.malaccatourism.com

www.facebook.com/MelakaTourismAssociation

Blog Archive

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