When the economy is bad, throw out the NEP... again

[pywong]

No need. Just throw out UMNO will do.

When the economy is bad, throw out the NEP... again

KUALA LUMPUR, Feb 12 — It happened during the gut-wrenching recession in 1986. It happened again during the Asian financial crisis in 1998. And now with the world in the throes of a severe economic crisis, the government is mulling the possibility of suspending aspects of the New Economic Policy.

Government officials told The Malaysian Insider that the affirmative action policy could be held in abeyance for one or two years depending on the severity of the impact of the crisis on the economy.

More… (http://www.themalaysianinsider.com/index.php/malaysia/18166-when-the-economy-is-bad-throw-out-the-nep-again)

[Isa Rahim]

If they want really fast recovery, disband the royal customs. That's the largest industrial growth impediment we have. They cause enormous damage to almost all industrial sectors.

The only thing we need as a replacement is a dedicated anti-dadah, anti-terrorist and anti-arms&explosives squad, perhaps 1/25th to 1/50th of the size and cost of the current organisation.

[pywong]

If they want really fast recovery, disband the royal customs. That's the largest industrial growth impediment we have. They cause enormous damage to almost all industrial sectors.

The only thing we need as a replacement is a dedicated anti-dadah, anti-terrorist and anti-arms&explosives squad, perhaps 1/25th to 1/50th of the size and cost of the current organisation.

Isa Rahim,

Wonderful idea. Do you want to provide more details?

[Isa Rahim]

Haha.. you need more details? Just disband it lah, what other details are needed? Their bragging about how profitable they are is the same thing as a cancer bragging about its growth. The patient is sick and dying but the cancer is happy.

Go to FMM, IMM, CIMM, MCoC or just about any trade organisation, industry organisation or chamber of commerce, and the story is the same everywhere, the Malaysian customs is the principal impediment for growth and at the same time bring no tangible value whatsoever. It's not just a matter of the very high import duties per se, it's also a matter of slowness, enormous bureaucracy, unpredictability, corruption etc.

What we need is a simple unified GST/VAT for domestic sales which should be in the area of 5%. No need for FTZs and strange rules promoting this or the other zone or corridor.

Singapore did a huge mistake a few years ago, and they have yet to realise the repercussions, they increased GST from 5% to 7%. They didn't realise how sensitive those 2% are for their growth.

In contrast, our aggegated customs duty and GST swings between 10% to 40% depending on product. No wonder our exports, after 30++ years since industrialisation, are still dominated by FDI in FTZs and natural resource based industry.

Singapore has one advantage that they have no complex customs organisation. Basically every shipment to Singapore reaches the factory THE SAME DAY as it arrives. This means that a Singapore manufacturer can give accurate predictions to their international customers and distributors when the exported products will arrive. In Malaysia you cannot; sometimes the components arrive within a few days, but in other cases they can sit there 3 weeks often waiting for a 'freight-forwarder' who knows how to grease the right persons before the goods can be released.

The very simple answer to get this nation on a growth path again is to make the whole country an FTZ, and only tax actual consumption in the form of GST. Thenceforth, customs is not needed anymore, an can focus 100% on battling the smuggling of criminal goods.

[pywong]

Haha.. you need more details? Just disband it lah, what other details are needed? Their bragging about how profitable they are is the same thing as a cancer bragging about its growth. The patient is sick and dying but the cancer is happy.

Go to FMM, IMM, CIMM, MCoC or just about any trade organisation, industry organisation or chamber of commerce, and the story is the same everywhere, the Malaysian customs is the principal impediment for growth and at the same time bring no tangible value whatsoever. It's not just a matter of the very high import duties per se, it's also a matter of slowness, enormous bureaucracy, unpredictability, corruption etc.

What we need is a simple unified GST/VAT for domestic sales which should be in the area of 5%. No need for FTZs and strange rules promoting this or the other zone or corridor.

Singapore did a huge mistake a few years ago, and they have yet to realise the repercussions, they increased GST from 5% to 7%. They didn't realise how sensitive those 2% are for their growth.

In contrast, our aggegated customs duty and GST swings between 10% to 40% depending on product. No wonder our exports, after 30++ years since industrialisation, are still dominated by FDI in FTZs and natural resource based industry.

Singapore has one advantage that they have no complex customs organisation. Basically every shipment to Singapore reaches the factory THE SAME DAY as it arrives. This means that a Singapore manufacturer can give accurate predictions to their international customers and distributors when the exported products will arrive. In Malaysia you cannot; sometimes the components arrive within a few days, but in other cases they can sit there 3 weeks often waiting for a 'freight-forwarder' who knows how to grease the right persons before the goods can be released.

The very simple answer to get this nation on a growth path again is to make the whole country an FTZ, and only tax actual consumption in the form of GST. Thenceforth, customs is not needed anymore, an can focus 100% on battling the smuggling of criminal goods.

Isa Rahim,

I like your idea. This comes under the classification of Reducing the Cost of Doing Business.

Good, keep it coming.

[Isa Rahim]

Readuce Cost of Doing Business. Yes!

Increase Ease of Doing Business. Yes!

Promote Local Value Creation. Yes!

Improving Speed of Doing Business. Yes!

(Ensure that lead-times for imported components are predictable, and hence our local manufacturers can give accurate lead-time estimations to their foreign customers, thereby improving service-level and thus marketing impact and growth. Yes!)

[Han2]

You know IsaRahim, I never thought about it that way. Come to think of it, yah, I am in full agreement to your idea. The customs has been a barrier and obstacle to better trade.... yup, dismantle the entire organisation!