Over 90% of Malaysians are ‘bankrupt’
 By:
Francis Nantha
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COMMENT As the ringgit has resumed its weakening against the US dollar, pessimists here are repeating the old litany that the slump in the Malaysian currency is due to the country going bankrupt.
While there have been many others who try to explain that it’s actually due to the US dollar strengthening against all global currencies, including the ringgit, local pessimists aren’t quite wrong – many of us in Malaysia are technically ‘bankrupt’, and hence the country as a whole maybe.
This shocking truth should come as no surprise because by all economic measures, most of us are living far beyond our means.
As a clear example, let’s look at the illustration of someone who earns RM1,000 a month but is yet able to own a car and a house – financed by bank loans.
Since the cost of the car and house combined is many, many times higher than the monthly salary – this person is ‘bankrupt’.
And it doesn’t matter if someone is earning RM10,000 or more monthly – many of these Malaysians are also technically ‘bankrupt’ because they too have car loans and mortgages.
Blunt honest statistics will show that over 90% of Malaysians do have some form of loans due – and these can include study loans, credit card debt and so on – and are therefore ‘bankrupt’.
Does this also mean every one of us in this indebted majority can’t sustain a livelihood?
The answer lies in another economic term which many of us aren’t familiar with, even though we practise the concept daily – it’s something known as cash flow.
As long as we can pay off monthly instalments on loans, meet recurring expense like phone and utility bills, with some left over for food and other essentials, we’d clearly be making ends meet – somehow.
At no point during this daily or monthly financial struggle would any consider ourselves to be ‘bankrupt’ or even entertain such a notion. Even when there are some unexpected major expenses – like hospitalisation or repairs to the house – we simply tighten our belts and cope somehow.
And yet, many of us immediately bash the ‘bankruptcy’ charge against others and our own country – simply because the ringgit value is falling against the greenback.
For those of us lucky enough to be debt-free, it is usually due to the hard work put in by our forefathers or own self – and such people tend to be largely grateful for their good fortunes.
The rest of us keep toiling on with our eyes fixed towards the day when we too will be debt-free. Is it too much to ask then for each of us to also see how Malaysia as a whole has somehow managed to sustain itself during these trying times, despite the ringgit’s fall in value?
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Post time 9-11-2015 04:35 PM
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Post time 9-11-2015 08:24 PM
