Tuesday, 23 December 2008

Slowdown looms big in crystal ball

A confession. For the best few weeks now, I've been sinking slowly into a state of mild despondency. You'd feel the same if you continue to read all the dire warnings in the newspapers and online sources. However, it's better to read and confront them than to ignore them. The news and predictions are all bad: next year is going to be a very bleak and trying period for Penang. But for all the doomsday predictions, I hope they are not going to be self-fulfilling prophesies.

There is no denying that the electronics industry is undergoing a big slowdown and it's dragging down the supporting industries too. I've been hearing of manufacturers implementing cost-cutting measures: reducing workdays, reducing benefits, lengthening the shutdown at the year-end. There's also the dread R-word: retrenchment. In short, there are just no new orders coming in and it's affecting the local economy.

And the latest forecast from the Human Resource Ministry: nearly 5,000 to be retrenched in the electronics industry within the next three months. Yes, next year is going to be tough.

The Malaysian Insider, in its report on Penang yesterday, says: "Penang's economy is wobbling. One by one, the factories in Penang are extending their year-end shutdown period from one week to two, triggered by the slowdown in sales orders. Salaries have been slashed. Work hours have been halved." If this is not bad news, I don't know what is.

The report went on to say that "Guan Eng himself is leading the pack to woo new investors to open up shop in Penang and create more jobs for locals. Several major players have already signed on."

But have the investments come too late? How soon can their plants be set up? How fast can their products come on-stream? How quick can our people find employment with these new investors? By my estimate, at least one or two years. It's not going to be a magic wand that'll be the instant cure for Penang's economy. It'll still take time and it'll test the resilience of the people to ride out this storm.

UPDATE: I just came off the line with a friend. We agreed that politics aside, the present Federal Government should have started to acknowledge the fallout from the economic downtown at least six months ago. Instead of sitting comfortably on their butts in denial, they should have started the process to recognise and accept that this country is not insulated from the global mess ... and do something about it pro-actively! We need pro-active measures, not political wars to see us through the downturn. Forget about the "ketuanan melayu" bullshit. Why can't the Federal Government think about the people as a whole for once, regardless of creed or colour, race or religion? How can it be "business as usual" when we are going through unusual times? As it stands right now, it may be too late to try and arrest the deterioration in the economy. We have factories closing down - for example, Western Digital in Sarawak - and retrenchments in Singapore which may affect Malaysians working there. Johor claims to have the safety net to absorb any retrenched people into their Iskandar project. I only hope they are right.

3 comments:

Rajan said...

I hold the entire BN government accountable. First Azlina, second Hissamuddin and the rest of the clowns who are saying "Malaysia is sheltered from the recession" Bah..humbug

Anonymous said...

Rajan

I think holding them accountable is one thing. You must write to your MP and ADUN and tell them to stand up and speak their minds.

Jeffrey Chew said...

Write to me if you wish to give your views on the economy and how it should be fixed. It will be shared with the higher up.