Let’s Spend Less in 2016

The truth is our country is in dire economic situation.

Our most coveted commodity, crude oil fall in price from USD102/bbl down to USD34/bbl in just 18 months – 66% fall. What do you think will happen to PETRONAS profit? Well, it shrunk from RM15.1bill (Q3 2014) vs RM1.4bill (Q3 2015) – thats 91% shrinkage in profit (y-o-y).

As the result of this, National income will decrease as Crude Oil contributed to 23% (2012) of Malaysia export. We’re foreseeing global oil oversupply to continue and further depressing oil price.

As the consequence, companies cut spending on capital and operational cost. As the result, are the observable retrenchment of workers from service companies and fabrication yards.

To make things worst, Palm Oil price declined to RM1863 this year from RM2400. CPO contributed 7% (2012) to total Malaysia export. KLCI fall from 1896 in July 2014 down to low 1519 in Aug 2015. While export counters are performing well, the majority of the counters are showing red.

Our government tried to trim the petrol, sugar and electric subsidy. Then they approved GST to possibly improve cash flow.

However, with continuing weak economic scenario doubled with weakening Ringgit as well as less or non-existent new policy to curb the fall by increasing export (read: to increase income), we’re questioning how long can we continue to sustain with current spending?

Things are changing. Business is not as usual anymore and this unusual scenario will continue for a few more years to come.

As a Country, policy has to be revised to reflect the changing scenario. Malaysia has to be more prudent in spending her money. It has to efficient (read : no more unnecessary fats built into VDP/contractors cost) and find all ways possible to stop value leakage.

We need to create more opportunity to generate income for our country.

Increase downstream business, reduce dependency on foreign workers and create more work opportunity for locals. Companies has to cut cost through innovation and technology (read: as you can reduce manpower; increase efficiency).

During this tough time, who has the cash, is the king. Review activity and budget every 3 months as yearly budgeting. Adapt accordingly fast.

As Rakyat marhean, lets learn to spend less.

Take more prudent approach for our 2016 budget. Probably less/no travel to oversea next year (read : ringgit is weak any way). Probably less eating out and more cook at home ‘events’ (cook at home is more satisfactory). Possibly more work at home. Possibly more giving to charity/NGO. Possibly more LED light bulbs then incandescent light bulbs.

Maybe a few lemon grass, pandan, vege in front of the house / in the pot. Maybe more time with family at home rather than long hours travel on the road. Maybe more prudent use of air-conditioners (set the timer please). Probably be open about 2nd, 3rd, nth income (how ever u do it). Maybe wash our own car at home (rather then paying at car wash). List goes on…

We can’t change the world or the country or the society. But we definitely change whatever within our control. Let’s be the change we want to see.

Isma Member

Armi Faizal Awang

Disclaimer: The views expressed in this article are those of the author and do not necessarily represent the official views of, and should not be attributed to, Isma or Ismaweb.

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