a) developing countries mainly countries that produce have to maintain a competitive or crudely 'cheap' currency to attract buyers. countries that consume (mostly developed) like the europeans and americans are not concerned about their currency value mainly because a stronger currency is simply good for them because they could buy things cheap.
b) so here is how it works, developed countries buy from developing producers, developing producers keeping currencies at low level to remain competitive and this goes on for a while. developing nations accumulate currencies of the developed world such as USD or EUR. so what do developing producers, mostly asians do with this accumulated foreign currency? that's right they will reinvest in the safest assets of these currencies which would be their government bonds.
c) in a way, asians are funding the luxurious living of the west. for instance, an unemployed spanish earns about 70% of his last drawn salary from unemployment benefits, last year i met a guy from spain who backpacks around asia on an unemployment benefit. why asia? yes, because we are cheap. and who funded this benefit? that is right, the asians. so don't sulk too much if asians are less cultured.
d) singapore produces almost an equivalent amount of GDP (if not more) with 7 times less population than us. singapore does not have commodities, heck they don't even have water. you might argue that it is a small country but i look at it differently, they are just plain productive. if you were to draw parallel, singapore and most developed countries have moved away from being just producers or sellers into service providers by adding values. singapore for example is one of the strongest global financial hub. yes, beat that.
e) as a continuation of the above, singaporean FDIs stood at USD 38 billion compared to a midget USD 9 billion for Malaysia last year. we are thrashed completely, no two way about it. singapore isn't cheap, singapore doesn't even have commodities yet, FDI was 4 times bigger than us. while here in malaysia, we are still promoting cheap labours as one of FDI attractions. on that note, guess who is second in terms of FDI? Indonesia, why? because they are cheaper than us, dirt cheap. in the long run however, being cheap does not work anymore and this has to change.
f) most people who is backing the current government will always fall back to sentiments, e.g. "disuruh bersyukur". looking at the facts above, we have a structural problem, policy errors upon errors. simple observation, how many were fooled into thinking that MSC will be something big and to be part of it studied IT. where is MSC now?
g) in sum, when najib said he wanted to drive malaysia to the next level, to achieve a high income society i can't help but look back at facts, facts not sentiments. we are pretty screwed front and back, upside down. and on that, to him i shall say. "DIAMLAH".