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28-01-2009: All is not well in the Land of the Hornbills
Commentary by Thomas Soon
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IN spite of stern warnings from none other than the Inspector-General of Police (IGP) himself, firecrackers boomed and lit the CNY night sky in Kuching, ushering in the Year of the Ox.

Given the "war zone" atmosphere in the housing estates of the capital city and most likely other towns of the Borneo state, one could not be blamed for inadvertently thinking that Sarawak is perhaps immune to the crippling effects of the global economic crisis.

Looks can be very deceiving, indeed.

A give-away was perhaps the duration of the crackling and deafening sounds of the explosive devices - what usually took half an hour lasted 10 to 15 minutes shorter.

All is not well in the Land of the Hornbill. Apart from those holding on to secure government jobs, many are cautious, afraid and wondering even if they will have a job to return to after the CNY celebrations.

"This could be worse than the 1985-1986 economic crisis," a local businessman in the timber industry simultaneously laments and warns.

The closure of the Western Digital facility in Kuching is well publicised, but little is said about the fast-diminishing external demand for the state's precious timber. Some industry players said the industry is barely afloat.

Before this, a sizeable portion - with some estimating it to be more than half - of Sarawak's logs were shipped to the Middle East to support the construction boom there. That is no more. Orders have stopped abruptly.

Other prime markets such as Vietnam and Thailand are also seeing significant economic slowdown.

With inventory piling up, most timber camps have closed down, and many are unsure when business can resume.

Also, with crude palm oil now trading well below RM2,000 per tonne, most of the state's oil palm estates, if not all, have been left idle since as early as last November.

Due to the terrain and transportation issues, smallholders and large operators alike find it uneconomical to continue harvesting the fruit.

The operation cost is just too high - much higher than in Peninsular Malaysia.

It is said that the breakeven point is between RM1,800 and RM2,000 per tonne, versus RM1,200-RM1,500 per tonne in the peninsula.

Figures are hard to come by but some accounts have it that hundreds of workers at Sarawak's oil palm estates and timber camps are already out of job.

Many bought cars when CPO prices were above RM3,000 per tonne and will now find it hard to keep them.

Another factor hampering Sarawak CPO producers is the fact that they cannot export their produce directly, but only through Peninsular Malaysia - adding to the cost.

With the virtual collapse of the timber and CPO trade, the shipping players too have been hard hit.

"Businesses are digging into their reserves. The state government must not be in denial. The federal government needs to step in to pump-prime the state economy," says another local businessman.

People on the street believe that the state may already be in a recession. The authorities must do the right thing by being forthcoming with the real situation. Transparency must be the order of the day.

The authorities have to tell people the real situation, so that they can be better prepared and better planned financially.

The impact of job losses goes beyond the loss of income and declining consumption. Job losses mean the sacrificing of college education as parents will not have the means to support their children's higher studies.

This could mean the loss of opportunities for many of the state's human resources.

This is the time for big and still well-to-do businesses to chip in, to undertake their corporate social responsibility (CSR) activities, to make sure those who should rightfully be studying, either enter or stay in college.

Politicians need to stop telling people to work harder than they used to. They need to start creating jobs so that people can have work. If there is no job, people can only pray harder than they used to.

Like the Ox, people too need the land to work on.

Confidence is sagging. People are not spending as much as they used to and are cutting down spending on big-ticket items, which include houses and cars. The slowdown will be felt in virtually all sectors.

The world, Malaysia included, is hoping the Republicans wake up to the reality of the global economic situation and as expediently as possible approve the passage of President Obama's proposed US$825 billion fiscal stimulus package.

Before external demand can be expected to recover, the Malaysian government too has to act.

People in the Land of the Hornbills certainly expect a significant portion of the impending second stimulus package to be channelled to the state, and to be spent transparently with maximum impact.

Having warded off evil, the Chinese community is keeping the worries of impending hardships at bay for now and is focused on celebrating the New Year with family and friends.

People will spend if they have good reasons to do so, just like the Chinese community in Sarawak - in buying from the black market a good amount of supercharged fireworks to usher in the Year of the Ox.

For years now, the ban on firecrackers has not worked.

It is high time for the state politicians to lift the ban, allow the letting off of fireworks for a half-hour period every year, and earn extra revenue from the sale of these products. And perhaps even make the "war zone" experience a tourist attraction - that could have brought some relief to the pain.

And then perhaps the IGP will have a better chance of being heard and his words adhered to.

[This Sarawak-born writer, of Chinese-Melanau descent, is spending the CNY break in his home state.]

What will happen to Sarawak based listed companies>?

me too...always on the wrong side..when I bought the particlar stock it will drop...whereas some people will just smile when they bought at the rite price and the chart goes north..

Bought resorts gamuda///last week waiting to dispose ...looking at genting also...seems that this forum is all out nfor kinstel...will it go up this week bcos the price is dipping as at today...

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Added on February 3, 2009, 5:52 pmI am praying for Kinstel to move up...need to let go cos still holding to this stock...any fvurther tips on Kinstel

This post has been edited by dilla: Feb 3 2009, 05:52 PM

Ho..ho..ho..have been eyeing Genting lately...if that is the case will rest for a while on genting

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Added on February 6, 2009, 6:08 pmBought Gamuda last week at 1.91...hopefully able to make by next week

This post has been edited by dilla: Feb 6 2009, 06:08 PM

me too cost too high to dispose...the price need to recover few fold before can manage to recover the cost...only way is to keep

SCOMI KINSTEL MKLAND

THKS FOR YR ADVISE....LOOKING AT THE POSSIBILITY TO SELL THIS FEW DAYS IF PRICE GUD FOR KINSTEL MKLAND AND SCOMI

Sori fren...any poss that Resorts will go to 2.31 this afternun have q to sell.

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Added on February 11, 2009, 12:25 pmScomi Kinstel and MKland..bought at peak price..

This post has been edited by dilla: Feb 11 2009, 12:25 PM

Hopefully ..

Haya...q to sell at 2.31 for Resorts in the morning..and didn't monitor the movement in the afternun...when I returned home noticed price shot up for Resorts..anyway as along as there is money to make happy

DONE

wowww... Gamuda up...I q to sell at 2.09 this afternun hopefully will get it...have been patience since last week when I bought it at 1.91 after you guys said that govt will inject fund for Valuecap..so one of the stock in Valuecap is Gamuda..