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Focus Malaysia
an hour ago
- Business
- Focus Malaysia
Time for Malaysians to get used to 'gov't loans come down can also mean national debt goes up'
SUCH seems to be the mind-boggling Economics 101 situation confronting main-on-the-street Malaysians after it was revealed yesterday (July 29) that the Federal government's debt rose to RM1.3 tril as of end-June 2025, up from RM1.25 tril as of end-2024. The increase was apparently driven by borrowings to finance fiscal obligations and fund development projects, according to Deputy Finance Minister Lim Hui Ying. 'Government loans are used prudently to finance strategic development projects such as infrastructure, education, health and social protection programmes,' she told the Dewan Rakyat yesterday (July 29) in response to a parliamentary question by DAP's Beruas MP Datuk Ngeh Koo Ham' on the government's effort to reduce federal debts and liabilities. However, the government's liabilities shrank to RM384.6 bil by March 2025 compared with RM384.8 bil as of end-2024. To ordinary Malaysians, this piece of news came as a shocker for just over the weekend (July 27), Prime Minister Datuk Seri Anwar Ibrahim had personally warned that unchecked national debt could burden future generation of Malaysians, stressing his government's duty to rein in borrowing before it spirals further. He went on to stress that his persistent warnings about national debt were driven by a responsibility to prevent the burden from being inherited by future generations. As Malaysia's debt level remains high, PMX who is also the Finance Minister further justified that managing it responsibly is crucial to restoring investor confidence and safeguarding the country's economic future. 'Bullets for opposition' Above all else, both the Information Department and PKR Youth were found blowing the trumpet on the Madani government's behalf by citing PMX boastfully announced that 'new debts have been successfully reduced to RM77 bil in 2024 from RM93 bil (2023) RM99 bil (2022)'. 𝙆𝙀𝙍𝘼𝙅𝘼𝘼𝙉 𝘽𝙀𝙍𝙅𝘼𝙔𝘼 𝙆𝙐𝙍𝘼𝙉𝙂𝙆𝘼𝙉 𝙃𝙐𝙏𝘼𝙉𝙂 𝘽𝘼𝙃𝘼𝙍𝙐 𝙉𝙀𝙂𝘼𝙍𝘼 📉 Hutang baharu negara: • 2022: RM99 bilion • 2023: RM93 bilion • 2024: RM77 bilion 1/2 — AMK Malaysia (@AMKMalaysia) July 21, 2025 📉 Hutang Baharu Negara Berkurang! 💪🇲🇾 🗣️ YAB Dato' Seri Anwar Ibrahim: 💵 Hutang baharu 2024 turun ke RM77 bilion. 📉 Berbanding RM99 bilion pada tahun 2022! 🎯 Tanda komitmen kerajaan untuk: ✅ Urus kewangan negara secara berhemat. 📊 Kawal defisit, stabilkan ekonomi. — Jabatan Penerangan Malaysia ❤️🇲🇾 (@JPenerangan) July 22, 2025 Inevitably, unless the Madani government's communications machinery can find a way to explain in layman's term differentials between PMX's narrative of government borrowings have come down vs soaring national debt level, financially-savvy detractors will surely prey on the latest revelation for political mileage. 'Today the PH (Pakatan Harapan) government admitted that the government's debt has reached RM1.3 tril,' penned former UMNO supreme council member Isham Jalil on his Facebook post. 'In the past six months alone, they have added RM50 bil in debt. They said it was for project spending. Once again, I ask, can you please list the projects above RM100 mil that you spent and who got these projects? Added the once special officer to incarcerated former premier Datuk Seri Najib Razak: 'And was it obtained through open tender, selected tender or direct negotiation? Where has the hundreds of billions that you borrowed over the past two-and-a-half years gone to? The rakyat will have to pay these debts later.' Interestingly, another former Najib 'lieutenant' Datuk Eric See-To also took a jibe at the Madani government that ''shall not add' means 'to add RM290 bil' over a period of 30 months'. 'Tidak akan tambah' bermaksud 'tambah RM290 bilion dalam tempoh 30 bulan'. Dec 2022 (sebelum Madani): – Hutang langsung: RM1.079.6b – Liabiliti Kerajaan: RM319.6b – Jumlah hutang & liabiliti Kerajaan = RM1.399 trilion Jun 2025 (lepas 30 bulan Madani): – Hutang langsung:… — Eric SeeTo Lim Sian See (@LimSianSeeEric) July 29, 2025 But the former Barisan Nasional (BN) strategic communication deputy director who also goes by the nom de plume Lim Sian See was checkmated by a seemingly neutral governance critic. 'Eric, twisting the numbers won't change the facts. If you want to play propaganda, let's have some basis,' argued ksampoh@MyOwn Inc (@ksampoh). 'Debt is rising? Yes. But not for pink diamonds, luxury ships or condos. This time it's going up because we want to take care of the people, continue the nation's operations and absorb the global impact. 'Eric, if you're really smart, don't just make noise on Twitter but offer a solution.' By the way, the learned commenter further 'counter-swiped' See-To on the need 'to add RM378 bil over the next nine years (to the national debt) to offset 1MDB, SRC, Aabar & other fraudulent investments'. – July 30, 2025
Economic Times
21-07-2025
- Business
- Economic Times
US bets $400 million on rare earth champion; Should India rethink its industrial policy?
Agencies MP Materials is not an American company that many would have heard of. It is the only integrated rare earth producer in the US, covering the entire value chain from mining to processing and magnet production. Last week, the US invested $400 mn in it, an attempt to use industrial policy to counter China's might in rare earths. Economics 101 frowns on the use of industrial policy - that is, government 'picking winners'. But it can work if used judiciously. India can learn, particularly from the US experience. In the current mood of de-globalisation and associated economic nationalism, industrial policy has become a global buzzword. But there is a great danger in applying it indiscriminately, particularly in a country like India, which has a long history of largely unsuccessful industrial policy. The fact is that India still does not have a global champion. The key to success lies in three principles: use only for select sectors, front the private sector, and ensure that the supported firms are competing globally. India has often flouted all three. In the most strategic sectors, it is usually the public sector that gets preference. India's industrial policy is oriented towards protection, creating firms or industries that serve the domestic market but are not competitive globally. In the US context, Trump's tariff bluster and blitzkrieg are not industrial policy. They represent a mercantilist strategy to reduce America's trade deficit. They are a political strategy to address key political constituencies. But it's not industrial policy. What the US is doing with MP Materials is. The US government has, for long, supported sectors that are hi-tech or inputs to hi-tech (critical minerals and rare earths in today's world). America's defence manufacturing industry (all of it privately owned) is what it is because of state procurement, an underrated instrument of industrial policy. The rise of SpaceX also owes a great deal to procurement by Nasa. The development of the internet also happened courtesy of R&D spending committed by the US. In India, this is another aspect of industrial policy that is under-recognised and under-funded. Direct state investment in firms is another MP Materials, the US government is now the largest shareholder with a 15% stake, but it allows the company to remain in private hands and function independently. And, in most cases, the goal is to create best-in-the-world companies/industries that can dominate all markets, not just the has a legacy of central planning, like China. While much has changed post-1991, the legacy of central planning lives on - most tellingly via 250-plus PSUs. These are usually given preferences, particularly in strategic sectors. GoI has not moved ahead with privatisation, but at least in defence, there is now a deliberate, welcome attempt to encourage private sector participation. But a challenge long as PSUs exist, GoI will always have to give them business, even when private sector companies are more efficient. In natural resources, GoI gives preference to PSUs (they don't always have to compete in auctions, for example). Even in the race to acquire overseas mineral assets, GoI prefers this un-level playing field, PSUs don't have an incentive to be efficient, while the 'competing' private sector bears the cost. GoI also spends resources propping up PSUs with little future, like BSNL, instead of supporting productive firms and R& also overextends itself. PLI, for example, is a good scheme. It trusts the private sector and has worked well in electronics. But there is less evidence of it working in other sectors. It's better to focus on one or two sectors than spread the greatest challenge for India is to change the mindset from creating firms that produce for India to firms that sell to the world. For this, reliance on protectionist measures like trade barriers must go. GoI should insist that it will only support firms that will be global winners. The writer is chief economist, Vedanta. (Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of Elevate your knowledge and leadership skills at a cost cheaper than your daily tea. From near bankruptcy to blockbuster drug: How Khorakiwala turned around Wockhardt Paid less than plumbers? The real story of freshers' salaries at Infy, TCS. What if Tata Motors buys Iveco's truck unit? Will it propel or drag like JLR? As deposit ground slips under PSU banks' feet, they chase the wealthy If data is the new oil, are data centres the smokestacks of the digital age? Stock Radar: M&M likely to break out from 1-year consolidation range; time to buy? Will consumer stocks see a comeback this festive season? 12 stocks to keep an eye on even when analysts are not bullish Don't fear volatility, focus on businesses: 5 mid-cap stocks from different sectors with upside potential of up to 27% Best way to deal with volatility, just ' Hold' for wealth creation: 7 large-cap stocks with an upside potential of up to 41%
Arabian Post
04-07-2025
- Business
- Arabian Post
Why higher inflation will sink the US economic supertanker?
Matein Khalid Both Israel and the US were careful not to target Iran's oil export terminal at Kharg Island, a major reason why Brent crude trades at 68 and not 100. It is ironic that Iran's oil output is now 5.1-MBD (this figure includes condensates and gas to liquids), its exact amount in 1978, the last year the Shah ruled from his Peacock Throne. There is no danger of an oil price spiral triggering an inflation shock in the US as long as the 'drill baby drill' mantra suffuses the Permian Basin and Saudi Arabia does its best to pressure OPEC+ quota violators Iraq and Kazakhstan with 400,000 barrels a day of monthly output releases. The United States has achieved energy independence and the manufacturing sector's oil intensity has plummeted since the 1970's oil embargo era. The sources of potential inflation lie in Trump's whimsical tariff policies and immigration crackdown, which will dramatically reduce labor supply at the precise moment that the Baby Boom generation reaches 'peak retirement'. This means a wage price spiral risk that is not remotely priced-in to the current valuation metrics of the financial markets and the US dollar is imminent. This wage price spiral risk is also the reason why Fed chairman Jay Powell is so adamant about keeping the policy overnight borrowing rate (Fed funds) at its current midpoint rate 4.375% until credible inflation data emerges from the tariff spasms of Trump's multiple trade war. Net-net, Wall Street obsesses over a softer labor market when the real battle is a structural shortage of workers to pick citrus in the orchards of the San Joaquin Valley in central California or code software in the Bay Area. ADVERTISEMENT Economics 101 argues that even taco Trumponomics will mean higher US wages and higher cost of imports, taking inflation rate closer to 3%. In a world where the bond vigilantes can precipitate a mini gilt/sterling prices at the very sight of Chancellor Reeves in tears at the PMQ in Westminster, a 3% US inflation rate is certain to trigger the mother of all Treasury bond meltdowns. Economic 101 argues that Trump's tariffs, immigration crackdowns and even tax cuts mean debt securities will be gutted by the cancer of inflation even as economic growth slows, consumer credit risk goes ballistic and the $80 trillion housing market collapses under the weight of 8 or even 9% mortgage rates. The post Lehman golden age of low inflation/low interest rates will end not with a whimper but with bang that will resonate all over the world sometime before Santa Claus fills up my Christmas stocking with a new list of shorts delivered by Rudolph the red nosed reindeer (camel?) direct from the North Pole. This is why I believe the current speculative mania is destined to end in tears as the macro stars are aligned for another 2008 scale endgame. Wage push inflation has a seismic impact on inflation expectations and will usher a protracted period of Fed monetary tightening. This shift in inflation expectations will be the final nail in the coffin of easy money and go-go property speculation, as it was in the autumn of 2008. The laws of economics, let alone gravity, have not been repealed in Umm Suqeim. The big beautiful bill's tax cuts and the trillion dollar arms race with China mean a $2 trillion budget deficit and record Uncle Sam borrowing in the debt markets means a higher term premium in interest rates that is simply not priced into current Wall Street valuation models. The global economy is poised to enter the twilight zone of zero/minimal growth and structurally higher inflation. My call, fasten your seatbelts and brace for a painful hard landing. Also published on Medium. Notice an issue? Arabian Post strives to deliver the most accurate and reliable information to its readers. If you believe you have identified an error or inconsistency in this article, please don't hesitate to contact our editorial team at editor[at]thearabianpost[dot]com. We are committed to promptly addressing any concerns and ensuring the highest level of journalistic integrity.
Mint
01-07-2025
- Business
- Mint
Mayoral mystery: Why should New York City run a chain of grocery stores?
Gift this article Zohran Mamdani brings a lot of guts, charisma and hustle to his campaign for New York City mayor, along with a laudable desire to offer the public a break with a dysfunctional status quo. Unfortunately, the break he's offering largely consists of bad ideas. Zohran Mamdani brings a lot of guts, charisma and hustle to his campaign for New York City mayor, along with a laudable desire to offer the public a break with a dysfunctional status quo. Unfortunately, the break he's offering largely consists of bad ideas. On that list, the idea of government-run grocery stores isn't the most pernicious, but it is the most grimly fascinating, in part because nobody seems to be asking for it. The demand to 'freeze the rent" on the slightly less than half of the city's rental stock that is subject to rent stabilization rules is misguided for lots of Economics 101 reasons. But it's also true that, for many of those same reasons, it will serve the short-term interests of rent-stabilized tenants. I think it's a bad idea and regrettable that so many New York voters seem excited by it. But I do understand what they're thinking. The popularity of city-run supermarkets, by contrast, is kind of mystifying. The idea keeps popping up on the left, though nobody demands it and nobody can decide what problem it's supposed to solve. When this proposal came up in Chicago, it was supposed to tackle 'food deserts.' The idea was that some neighbourhoods, especially on Chicago's poor and depopulating South Side, were suffering because residents lacked easy access to a grocery store. Once upon a time, I myself lived in a supermarketless urban part of Washington and can confirm it was annoying. Eventually, an influx of more affluent newcomers brought in their wake a Trader Joe's. Which suggests that food deserts are not really much of a problem. If you improve public safety, transport infrastructure and public education in a given neighbourhood, then more people will want to live there—and stores will open to serve them. Trying to address a cycle of neighbourhood decline by opening publicly run supermarket doesn't make sense. It's hard enough to execute core public-sector functions like policing, schools and transit, so why take on the assignment of running grocery stores? Chicago, at any rate, ended up abandoning the idea. None of this has stopped advocates from heralding the concept as 'a bold solution for food insecurity." FoodTank, a self-styled think-tank, claims that city-owned stores already exist in St. Paul, Kansas City and Atlanta. But the market in Atlanta has privately-owned grocery stores leasing city-owned retail space. Another example the group cites, a proposal in Madison, Wisconsin, is actually a plan for the city to develop a parcel to include 150 units of affordable housing, a parking structure and a grocery store. One can debate its merits, but it's not what Mamdani is proposing. Mamdani is pitching the government-run stores not as a solution to food deserts but as a cure for high grocery prices. He says the new stores will be 'focused on keeping prices low, not making a profit" because 'without having to pay rent or property taxes, they will reduce overhead and pass on savings to shoppers." This presupposes that there is a large number of supermarket-shaped buildings that the city either already owns or else could obtain for free. More to the point, if grocery prices are too high because of property taxes, the city could always offer grocery stores a tax break. To be fair, Mamdani himself seems to be losing faith in this idea. He did not particularly emphasize it during the primary campaign, and when pressed in interviews, he tends to describe it as a pilot programme that he'll happily abandon if it doesn't work out. So I don't think New Yorkers need to live in fear that he will extinguish grocery market freedom. But it says something unflattering about the progressive policy world that it supports the concept of public supermarkets as a cure for food deserts despite study after study showing that their presence has no public health benefits. Instead of reacting to this data by abandoning this idea, advocates repurposed government-owned stores as an inflation cure. To be clear, there's no basis for the belief that a paucity of government-run supermarkets is responsible for high grocery prices. By resorting to this rationale, America's self-proclaimed 'democratic socialist' movement calls into question one of its favourite conceits. America's democratic socialists are fond of saying that they are not opposed to capitalism—they are just in favour of a more generous Nordic-style welfare state. If so, it's hard to see how government-owned grocery stores fit into this model. After all, that's not how things work in Sweden, Denmark, Finland or any other successful economy. Support for government-run supermarkets is a kind of desperate grasp to try connecting a real public concern—inflation—with what really seems to animate this movement: fetishistic anti-capitalism. ©Bloomberg The author is a columnist for Bloomberg Opinion. Topics You May Be Interested In
Mint
29-06-2025
- Business
- Mint
Government-Owned Grocery Stores Aren't the Solution
(Bloomberg Opinion) -- Zohran Mamdani brings a lot of guts, charisma and hustle to his campaign for New York City mayor, along with a laudable desire to offer the public a break with a dysfunctional status quo. Unfortunately, the break he's offering largely consists of bad ideas. On that list, the idea of government-run grocery stores is far from the most pernicious — but it is the most grimly fascinating, in part because nobody seems to be asking for it. The demand to 'freeze the rent' on the slightly less than half of the city's rental stock that is subject to rent stabilization regulations is misguided for lots of boring Economics 101 reasons. But it's also true that, for many of those same reasons, it will serve the short-term interests of rent-stabilized tenants. I think it's a bad idea, I wish he weren't running on it, and it's regrettable that so many New York voters seem excited by it. But I do understand what they're thinking. The popularity of city-run supermarkets, by contrast, is just kind of mystifying. The idea keeps popping up on the left even though nobody is demanding it and nobody can decide what problem it's supposed to solve. When the proposal came up in Chicago, it was supposed to be a solution to the problem of 'food deserts.' The idea was that some neighborhoods, especially on Chicago's poor and depopulating South Side, were suffering because residents lacked convenient access to a grocery store. Once upon a time, I myself lived in a supermarketless urban neighborhood in Washington, and can confirm it was annoying. Eventually, an influx of more affluent newcomers brought in their wake a Trader Joe's. Which to me suggests that food deserts are not really much of a freestanding problem. If you improve the public safety, transportation infrastructure and public education in a given neighborhood, then more people will want to live there — and stores will open to serve them. Trying to address a cycle of neighborhood decline by opening a supermarket doesn't really make sense. It's hard enough to execute well on core public-sector functions like policing, schools and transit — why take on the assignment of running a grocery store? Chicago, at any rate, ended up abandoning the idea. None of this has not stopped advocates from heralding the concept as 'a bold solution for food insecurity.' FoodTank, a self-styled think tank for food, claims that city-owned stores already exist in St. Paul, Kansas City and Atlanta. But the market in Atlanta is a privately owned grocery store leasing space in city-owned property. Another example the group cites, a proposal in Madison, Wisc., is actually a plan for the city to develop a parcel to include 150 units of affordable housing, a parking structure and a grocery store. One could debate the merits of this, but it's not what Mamdani is proposing. Mamdani is pitching the government-run stores not as a solution to food deserts but as a cure for high grocery prices. He says the new stores will be 'focused on keeping prices low, not making a profit' because 'without having to pay rent or property taxes, they will reduce overhead and pass on savings to shoppers.' This presupposes that there is a large number of supermarket-shaped buildings that the city either already owns or else could obtain for free. More to the point, if grocery prices are too high because of property taxes, the city could always offer grocery stores a tax break. To be fair, Mamdani himself seems to be losing faith in this idea. He did not particularly emphasize it during the primary campaign, and when pressed in interviews he tends to describe it as a pilot program he'll happily abandon if it doesn't work out. So I don't think New Yorkers need to live in fear that he will extinguish grocery freedom. But it says something unflattering about the progressive policy world that it supports the concept of public supermarkets as a cure for food deserts despite study after study after study showing that their presence has no public health benefits. Instead of reacting to this data by abandoning this idea, advocates repurposed government-owned stores as an inflation cure. To be clear, there's no basis for the belief that a paucity of government-run supermarkets is responsible for high grocery prices. By resorting to this rationale, America's self-proclaimed democratic socialist movement calls into question one of its favorite conceits. America's democratic socialists are fond of saying that they are not opposed to capitalism — they are just in favor of a more generous, Nordic-style welfare state. If so, it's hard to see how government-owned grocery stores fit into this model. After all, that's not how things work in Sweden, Denmark, Finland or any other successful economy. Support of government-run supermarkets is a kind of desperate grasping to try to connect a real public concern — inflation — with what really animates the movement: fetishistic anti-capitalism. Elsewhere in Bloomberg Opinion: For more, subscribe to our newsletter. This column reflects the personal views of the author and does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners. Matthew Yglesias is a columnist for Bloomberg Opinion. A co-founder of and former columnist for Vox, he writes the Slow Boring blog and newsletter. He is author of 'One Billion Americans.' More stories like this are available on
