'Najib's economic figures are fictional'
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COMMENT Yesterday, March 13, 2013, national news agency Bernama quoted Prime Minister Najib Abdul Razak as saying:
"We have been able to buck the external global economic trend. In the last quarter, we achieved 6.4 percent growth, which indicates the resilience of the national economy.
"When we talk about benefits to the people from 2009 to 2011, our gross national income (GNI) per capita has grown from US$6,670 to US$9,970, roughly about 49 percent. There is no country in the world that has achieved this kind of result."
Najib said this in the 'Conversation with the PM' programme aired by Media Prima group's TV3 on Tuesday night (March 12).
Where did our prime minister-cum-finance minister get these figures from? I suspect that it's from none other than Idris Jala (left), the chief executive officer of the Performance Management and Delivery Unit (Pemandu), which comes under the PM's Department.
Idris wrote in his official website, on Feb 18, 2013, after attending the World Economic Forum at Davos, Switzerland:
"In just two years, we increased our GNI per capita by 45 percent from US$6,700 in December 2009 to US$9,700 in December 2011, a rare feat in today's world."
But Idris' figures were wrong to begin with. He understated the 2009 GNI figure and overstated the 2011 GNI figure to exaggerate the overall GNI growth.
To give an exaggerated analogy to illustrate this point, it's as if the 2009 figure was actually ‘5' while the 2011 was actually ‘9', but Idris changed the 2009 figure to ‘4' and the 2011 figure to ‘10'. Suddenly, the growth rate suddenly increased from 80 percent to 150 percent!
Look at GNI increase in ringgit terms
One should actually look at the increase in GNI in ringgit terms in order to have a more accurate picture of how much GNI per capita has increased.
If we use GNI in US dollar terms, it would be influenced by changes in the exchange rate that reflects little of whether Malaysians have become better off or not.
If the ringgit strengthens by 10 percent against the US dollar, it doesn't mean that Malaysians have experienced a 10 percent increase in their income (except for those who travel overseas often for shopping and such).
According to the latest Bank Negara Monthly Statistical Bulletin (Table 3.3.1a, January 2013 MSB), Malaysia's nominal GNI per capita (or GNI per capita in current prices) was RM23,850 in 2009 and RM29,094 in 2011 respectively.
This means that the GNI per capita increased by RM5,244 from 2009 to 2011, an increase of only 22 percent, which is less than half of the 45 percent quoted by Idris Jala and definitely nowhere near the 49 percent increase that Najib was reported to have said during his TV interview a few days ago.
Let's say we want to compare the US dollar increase in GNI per capita using the Bank Negara MSB figures, just for argument's sake.
According to the BNM statistics (January 2013 MSB exchange rate data), the exchange rate was RM3.4245 to US$1 in 2009 and RM3.117 to US$1 in 2011, representing a 10 percent appreciation of the ringgit against the US dollar.
Even with the appreciation in the RM/US dollar exchange rate, Malaysia's GNI per capita in US dollar increased by only 34 percent, from US$6,964 to US$9,334, as this table shows:
What we have here is Idris misrepresenting the GNI figures in US dollar in 2009 and 2011 to show a ‘fantastic' growth rate from 2009 to 2011 and our finance minister and prime minister further exaggerating Idris's figures to show an even more ‘fantastic' world record breaking result.
With two of our esteemed ministers who are in charge of the economy trying to misrepresent basic economic figures, it is no wonder that the people are sceptical about the supposed benefits that the Economic Transformation Programme (ETP) has brought to them.
In light of the Bank Negara statistics shown here, PM Najib should clarify the origin of the figures he quoted in the TV3 programme and apologise for misrepresenting the facts and figures.
ONG KIAN MING is a DAP election strategist.
"We have been able to buck the external global economic trend. In the last quarter, we achieved 6.4 percent growth, which indicates the resilience of the national economy.
"When we talk about benefits to the people from 2009 to 2011, our gross national income (GNI) per capita has grown from US$6,670 to US$9,970, roughly about 49 percent. There is no country in the world that has achieved this kind of result."
Najib said this in the 'Conversation with the PM' programme aired by Media Prima group's TV3 on Tuesday night (March 12).
Where did our prime minister-cum-finance minister get these figures from? I suspect that it's from none other than Idris Jala (left), the chief executive officer of the Performance Management and Delivery Unit (Pemandu), which comes under the PM's Department.Idris wrote in his official website, on Feb 18, 2013, after attending the World Economic Forum at Davos, Switzerland:
"In just two years, we increased our GNI per capita by 45 percent from US$6,700 in December 2009 to US$9,700 in December 2011, a rare feat in today's world."
But Idris' figures were wrong to begin with. He understated the 2009 GNI figure and overstated the 2011 GNI figure to exaggerate the overall GNI growth.
To give an exaggerated analogy to illustrate this point, it's as if the 2009 figure was actually ‘5' while the 2011 was actually ‘9', but Idris changed the 2009 figure to ‘4' and the 2011 figure to ‘10'. Suddenly, the growth rate suddenly increased from 80 percent to 150 percent!
Look at GNI increase in ringgit terms
One should actually look at the increase in GNI in ringgit terms in order to have a more accurate picture of how much GNI per capita has increased.
If we use GNI in US dollar terms, it would be influenced by changes in the exchange rate that reflects little of whether Malaysians have become better off or not.
If the ringgit strengthens by 10 percent against the US dollar, it doesn't mean that Malaysians have experienced a 10 percent increase in their income (except for those who travel overseas often for shopping and such).
According to the latest Bank Negara Monthly Statistical Bulletin (Table 3.3.1a, January 2013 MSB), Malaysia's nominal GNI per capita (or GNI per capita in current prices) was RM23,850 in 2009 and RM29,094 in 2011 respectively.
This means that the GNI per capita increased by RM5,244 from 2009 to 2011, an increase of only 22 percent, which is less than half of the 45 percent quoted by Idris Jala and definitely nowhere near the 49 percent increase that Najib was reported to have said during his TV interview a few days ago.
Let's say we want to compare the US dollar increase in GNI per capita using the Bank Negara MSB figures, just for argument's sake.
According to the BNM statistics (January 2013 MSB exchange rate data), the exchange rate was RM3.4245 to US$1 in 2009 and RM3.117 to US$1 in 2011, representing a 10 percent appreciation of the ringgit against the US dollar.
Even with the appreciation in the RM/US dollar exchange rate, Malaysia's GNI per capita in US dollar increased by only 34 percent, from US$6,964 to US$9,334, as this table shows:
What we have here is Idris misrepresenting the GNI figures in US dollar in 2009 and 2011 to show a ‘fantastic' growth rate from 2009 to 2011 and our finance minister and prime minister further exaggerating Idris's figures to show an even more ‘fantastic' world record breaking result.
With two of our esteemed ministers who are in charge of the economy trying to misrepresent basic economic figures, it is no wonder that the people are sceptical about the supposed benefits that the Economic Transformation Programme (ETP) has brought to them.
In light of the Bank Negara statistics shown here, PM Najib should clarify the origin of the figures he quoted in the TV3 programme and apologise for misrepresenting the facts and figures.
ONG KIAN MING is a DAP election strategist.
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