Seeking greener pasture amid global turmoil

 

Where IS the grass greener these days? Chief executives of Malaysian companies, from telcos to banks, have said that they have no plans to cut jobs.

THERE is a popular saying, "The grass is always greener (on the other side of the fence)", which means that other people always seem to be in a better situation than oneself, although it may not be so.

Given the dire straits the world's economy is in now - financial giants have gone bust, manufacturers have shut down plants, and millions are out of jobs - one wonders if the saying holds true anymore. Where IS the grass greener these days?

In our pages a couple of days ago, there was an article about Malaysian furniture makers who used to export most of their sofa sets and cupboards but now wanted to sell their products locally.

The furniture industry here has evolved over the last 20 years from traditional cottage-based into one that has made the country the world's tenth largest furniture exporter.

Recording an export value of just RM26 million in the 1980s, our furniture exports to more than 160 countries were worth an estimated RM8.7 billion last year.

Over the last few years, as product quality improved, efforts were made to move into the more lucrative overseas segments. Entering these markets was not easy, especially with various environmental certifications required by the overseas buyers. As a result, Malaysian furniture often commanded a higher premium.

We are told that these furniture makers have reduced their prices for the domestic market, rationalising that a lower margin is better than spending more money on warehousing while waiting for overseas orders.

However, the manufacturers have raised an outcry of unfair competition in the form of "dumping" of imported furniture in the market. While imported glass, fabric and furniture parts are taxed, completed furniture brought in from China are not, they said.

In the context of international trade law, dumping is defined as the act of a manufacturer in one country exporting a product to another country at a price that is either below the price it charges in its home market or below its cost of production.

The domestic players hope the government will consider removing the duties on imported furniture parts to create a more level playing field.

Our story ends there, but their predicament raises some interesting questions.

With our exports declining at an alarming rate (down 18.3 per cent in the last quarter of 2008), can we expect other export-oriented industries to start looking to sell their products domestically as well, if they have not already?

Malaysian-made clothes and shoes, for example, have been sold in developed countries for years and, in some cases, the price difference can be quite significant.

What will happen if these manufacturers choose instead to sell their products domestically? Will they be cheaper or more expensive?

Let's take it another step further: beyond the clothes on our backs, the shoes on our feet, or the plush recliner into which we settle.

More than 750,000 Malaysians are working overseas in Britain, the US, the Middle East, Australia and Singapore. Most of them are in the medical field, such as doctors and nurses, and information technology professionals.

With 50 million people expected to be out of work worldwide this year (according to International Labour Organisation estimates), are we going to see a substantial number of these overseas Malaysians coming back here to work?

Could there be a reversal of the brain drain, with Malaysian professionals who have worked and gained valuable experience and skills overseas coming back to contribute towards the nation's growth and development?

After all, we are told that Malaysia is better off than most countries in weathering the impact of the economic downturn. Balance sheets are strong, the banking system is sound, and we still have a very high savings rate.

Chief executives of local companies, from telcos to banks, have said that they have no plans to cut jobs and will instead adopt other strategies to lower costs during the slowdown.

If that is the case, then for once, the grass is greener on this side ... and it's the "green, green grass of home".