Malaysian exports dropping fast... recession looking BAD for Malaysia

http://biz.thestar.com.my/news/story.asp?file=/2008/11/27/business/2654048&sec=business

"Federation of Malaysian Manufacturers (FMM) president Tan Sri Yong Poh Kon said there were factories reporting slower demand, with some saying exports had dropped 20% to 30%."

The focus of the article was about how they've managed to avoid rentrenchment.

But... a 20%-30% drop in exports should be a cause for panic!

Seriously, do you know how much of malaysian income is derived from exports? It's huge...

We'd better hope that the fall of 20% is limited to only certain select sectors. Because... if that 20% is across the board... all other factors taken in, I would have to revise my projection of 12% GDP contraction upwards... it is starting to look like a 15% contraction in GDP. (possibly less, depending on exchange rate of USD to RM)

... Even I feel these numbers are looking rather ridiculously high. I'm quite possibly projecting too high... however, even if I'm wrong, I can say that Malaysia is going to be hit with a far far worse recession than these developed nations.

At the end of the day, Malaysia has ALWAYS relied on Foreign Investment for growth. And we are a net exporter. Basically, whatever the government claims, Malaysia is completely NOT self sufficient. We rely BADLY on foreign trade and cash inflows. VERY badly. We won't even have enough rice for our people if this situation in Thailand continues. We can't afford to continue our decades long fuel subsidy.
When the global recession hits, it will hit Malaysia HARD. And if it continues for more than 3 years, I expect the state of our economy to be TERRIBLE. ... of course, who knows, things might get better by the middle of 2009.

Have any of you given thought to what happens if it DOESN'T get better, though?

Seriously, everyone is, of course, hoping that the economy will turn around relatively soon.

But.

What if.

Just consider... what if... however unlikely you might think it....

What if this turns out to be a 5 year depression?


... I have made back-up emergency plans. Which I hope that I will not have to actually fall back on.
I mean, basically, everyone is hoping Plan A will work, which is "place your trust in the buggers who got us into this mess in the first place"... everyone is hoping Plan A will work. (it isn't working so far, BTW... but they keep saying that they are hopeful it will start working anytime SOON)
But my point is: IF... IF IF IF... if this turns out to be worse than the governments claim it will be...
Everyone should start preparing PLAN B. Just in case Plan A fails. What are you going to do if the governments and banks and insurances and big companies fail to save us?

... In fact, having back-up Plan C isn't a bad idea either.


Summary: Start preparing yourself for a recession. A severe one. Don't panic. Don't do anything silly. But make sure that you have a plan which will keep you safe in the event that things turn out worse than what the governments and corporations have been telling us. Even if things turn out ok, a little precaution never hurt anyone.