• Najib’s fictional economic figures come from Idris Jala’s fictional economic figures

    Media Statement by Dr. Ong Kian Ming, DAP Election Strategist, in Kuala Lumpur on 14th March, 2013

    Yesterday, March 13, 2013, Bernama[1] quoted Prime Minister Najib Tun Razak as saying the following: “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.[2]

    Where did our Prime Minister / Finance Minister get these figures from? I suspect that it’s from none other than Idris Jala, the CEO of PEMANDU.

    Here, (http://idrisjala.my/davos-takeaways/), after a trip to Davos in 2012, Idris wrote:

    1.      In just two years, we increased our GNI per capita by 45% 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 to 10. Suddenly, the growth rate suddenly increased from 80% to 150%!!!

    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$ terms, it would be influenced by changes in the exchange rate that reflects little of whether Malaysians have gotten better off or not. If the Ringgit strengthens by 10% against the dollar, it doesn’t mean that Malaysians have experienced a 10% 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 which can be downloaded here  http://www.bnm.gov.my/files/publication/msb/2013/1/xls/3.3.1a.xls), Malaysia’s nominal GNI per capita (or GNI per capita in current prices) was RM23,850 in 2009 and RM29,094 in 2011 respectively. (Screenshot in Appendix 1 below)

    This means that GNI per capita increased by RM5,244 from 2009 to 2011, an increase of only 22.0%, which is less than half of the 45% quoted by Idris Jala and definitely nowhere near the 49% increase which Najib was reported to have said during his TV interview a few days ago.

    Let’s say we want to compare the US$ increase in GNI per capita using the Bank Negara MSB figures, just for argument’s sake. According to the BNM statistics (Jan 2013 MSB exchange rate data which can be downloaded here (http://www.bnm.gov.my/files/publication/msb/2013/1/xls/2.6.xls), the exchange rate was RM3.4245 / US$1 in 2009 and RM3.117 / US$1 in 2011 representing a 10% appreciation of the RM against the US$. Even with the appreciation in the RM / US$ exchange rate, Malaysia’s GNI per capita in US$ increased by only 34% from US$6964 to US$9334. (See Table 1 below)

    Table 1: Comparison of 2009 and 2011 GNI per capita using various sources

    GNI per capita (RM)(According to Bank Negara) RM / US$ Exchange Rate GNI per capita (US$)(Using BNM statistics) Idris Jala’s figures (US$) Najib’s figures (US$)
    2009 23850 RM3.4245/US$1 6964 6700 6670
    2011 29094 RM3.117/US$1 9334 9700 9970
    % Increase 22%   34% 45% 49%

     

    What we have here is PEMANDU’s CEO Idris Jala misrepresenting the GNI figures in US$ in 2009 and 2011 to show a ‘fantastic’ growth rate from 2009 to 2011 and our Finance Minister and Prime Minister, Najib Tun Razak further exaggerating Idris Jala’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 public is sceptical about the supposed benefits that the Economic Transformation Program (ETP) has brought to the people.

    In light of the Bank Negara statistics shown here, PM Najib should clarify the origin of the figures quoted in his TV interview and to apologize for misrepresenting the facts and figures.

    Dr. Ong Kian Ming
    Election Strategist
    Democratic Action Party

    Appendix 1: Screenshot of Idris Jala’s post in Davos

    Appendix 2: Screenshot of BNM Monthly Statistical Bulletin January 2013

    Table 3.3.1a Gross National Income (GNI) by Expenditure Components in Constant (2000=100) and Current Prices


    [2] The Malay Mail also has this quote.

    This press statement was published by DAP Malaysia and also as an article by Malaysiakini.

6 Comments

  1. mmc says: March 17, 2013 at 6:45 pmReply

    is it the same miniser who said there is no crime in his kampung in sarawak?
    his guy surely know whose side to butter. didnt know SHELL produces such characters.

  2. Murhiz Mohd Nor says: March 22, 2013 at 1:41 amReply

    Firstly the link you mentioned in your page regarding GNI redirects users to a totally different table (y? only god knows.) Secondly, your calculation and tabulation are grossly off the mark coz you used Dec exchange rates to convert GNI per capita. Any economist worth his salt knows that the yearly average rate should be used. The average exchange rate for 2009 and 2011 are 3.5233 and 3.0577 respectively.

    Bank Negara website has the latest Malaysia annual report for 2011 (published on 21 March 2011) which shows that the GNI for 2011 is RM29,094 (as per what OKM states) but a footnote in the report says 2011 figures are preliminary, which you conveniently forgot to mention. The report also shows the GNI in USD, ie. USD6767 (2009) and USD9508 (2011), and increase of 40.5% (not to forget that 2011 GNI per capita is preliminary).

    Perhaps Najib has a more recent and accurate 2011 GNI per capita from Bank Negara, hence the claim of 49% increase.

    Wait a minute, Najib did have a more accurate report, coz Bank Negara just release its annual report for 2012 yesterday and guess what? It confirms that the GNI per capita for 2011 was infact US$9794.

    nice try in your effort to mislead the public with incomplete information.

  3. Murhiz Mohd Nor says: March 22, 2013 at 1:53 amReply

    Correction to a typo in my original reply. BNM 2012 annual reports confirm that the GNI per capita for 2011 was infact US$9974.

    • admin says: March 22, 2013 at 9:04 amReply

      I have updated the link to Table 3.3.1a (http://www.bnm.gov.my/files/publication/msb/2013/1/xls/3.3.1a.xls).

      PEMANDU has clarified that the 49% increase in GNI per cap US$ was actually wrong and revised it downwards to 41% – http://www.kinibiz.com/story/economics/10354/pemandu-revises-income-growth-down-on-rule-change.html

      The Kinibiz article also showed that the increase in GNI per cap in RM terms was 24%.

      My position is that it would make more sense to show our GNI per capita increase in RM terms rather than in US$ terms since that is the most accurate reflection of changes in standard of living.

      Thanks for your feedback.

      • Murhiz Mohd Nor says: March 22, 2013 at 11:40 amReply

        As usual, you are trying to change your tune to a different song now. You firstly accused the PM for making up fictional figures, now you are making reference to the ever manipulative KiniBiz? The figures which the PM used were extracted from BNM reports, and not Idris Jala and most importantly are facts.

        If you had read BNM reports, you would know that the GNI are shown in both Ringgit and USDollar. US Dollar is globally used as a standard for comparison purposes.

        • salehoddin abdul hamid says: March 22, 2013 at 7:50 pmReply

          I think someone is trying to pull a fast one here …..

Leave a reply.