The Best Place in Kuching, Sarawak

Kuching is the capital and the most populous city in the state of Sarawak in Malaysia. It is also the capital of Kuching Division.

List of the best Place in Kuching, Sarawak.

Shopping Place: 

1. Plaza Merdeka

2. The Spring

3. VivaCity Megamall

4. The Summer Mall

COVID-19

Coronavirus Disease 2019 (COVID-19) - is an infectious diseases caused by severe respiratory syndrome. The disease was first identified in Wuhan, China. 

Common & Worst Symptoms: 

1. fever
2. headache
3. cough
4. shortness of breath
5. sore throat
6. muscle pain
7. diarrhea
8. vomit
9. Multi-organ failure (exp: kidney failure, decrease white blood)
10. pneumonia

How it spread:
1. Person-to-person spread
2. Spread from contact with contaminated surfaces or objects

How to Prevent and Protect Yourself
1. Clean your hands often
2. Avoid close contact
3. Wear a face mask

Take steps to protect others:
1. Stay home if you're sick
2. Cover coughs and sneezes
3. Wear a face-mask if you are sick
4. Clean and disinfect

FINANCIAL CRISIS IN ASIAN

Basic problems or issues:

• A shortage of foreign exchange that has caused the value of currencies and equities in Asian Country to fall dramatically.
• Inadequately developed financial sectors and mechanisms for allocating capital in the troubled Asian economies,
• Effects of the crisis on both the United States and the world
• The role, operations, and replenishment of funds of the International Monetary Fund.
• The first round was a precipitous drop in the value of the Thai baht, Malaysian ringgit, Philippine peso, and Indonesian rupiah. As these currencies stabilized
• The second round began with downward pressures hitting the Taiwan dollar, South Korean won, Brazilian real, Singaporean dollar, and Hong Kong dollar

Chronology of the Asian Financial Crisis:

Early May (1997)	Japan hints that it might raise interest rates to defend the yen. The threat never materializes, but it shifts the perceptions of global investors who begin to sell Southeast Asian currencies and sets off a tumble both in currencies and local stock markets.
July 2	After using $33 billion in foreign exchange, Thailand announces a managed float of the baht. The Philippines intervenes to defend its peso.
July 18	IMF approves an extension of credit to the Philippines of $1.1 billion.
July 24	Asian currencies fall dramatically. Malaysian Prime Minister Mahathir attacks "rogue speculators" and later points to financier George Soros.
Aug 13- Aug 14	The Indonesian rupiah comes under severe pressure. Indonesia abolishes its system of managing its exchange rate through the use of a band.
Aug. 20	IMF announces $17.2 billion support package for Thailand with $3.9 billion from the IMF
Aug. 28	Asian stock markets plunge. Manila is down 9.3%, Jakarta 4.5%.
Sep. 4	The peso, Malaysian ringgit, and rupiah continue to fall
Sep. 20	Mahathir tells delegates to the IMF/World Bank annual conference in Hong Kong that currency trading is immoral and should be stopped
Sep. 21	George Soros says, "Dr Mahathir is a menace to his own country."
Oct. 8	Rupiah hits a low; Indonesia says it will seek IMF assistance.
Oct. 14	Thailand announces a package to strengthen its financial sector
Oct. 20-23	The Hong Kong dollar comes under speculative attack; Hong Kong aggressively defends its currency. The Hong Kong stock market drops, while Wall Street and other stock markets also take severe hits
Oct. 28+	The value of the Korean won drops as investors sell Korean stocks
Nov. 5	The IMF announces a stabilization package of about $40 billion for Indonesia. The United States pledges a standby credit of $3 billion
Nov. 3-24	Japanese brokerage firm (Sanyo Securities), largest securities firm (Yamaichi Securities), and 10* largest bank (Hokkaido Takushoku) collapse
Nov. 21	South Korea announces that it will seek IMF support
Nov 25	At the APEC Summit, leaders of the 18 Asia Pacific economies endorse a framework to cope with financial crises
Dec 5	Malaysia imposes tough reforms to reduce its balance of payments deficit
Dec 3	Korea and IMF agree on $57 billion support package
Dec 18	Koreans elect opposition leader Kim, Dae-jung as new President.
Dec 25	IMF and others provide $10 billion in loans to South Korea
Jan 6	Indonesia unveils new budget that does not appear to meet IMF austerity conditions. Value of rupiah drops
Jan 8	IMF and S. Korea agree to a 90-day rollover of short-term debt
Jan 12	Peregrine Investments Holdings of Hong Kong collapses. Japan discloses that its banks carry about $580 billion in bad or questionable loans
Jan 15	IMF and Indonesia sign an agreement strengthening economic reforms
Jan 29	South Korea and 13 international banks agree to convert $24 billion in short-term debt, due in March 1998, into government-backed loans
Jan 31	South Korea orders 10 of 14 ailing merchant banks to close
Feb 2	The sense of crisis in Asia ebbs. Stock markets continue recovery

The Asian financial crisis was initiated by 2 rounds of currency depreciation:

Governments have countered the weakness in their currencies by selling foreign exchange reserves and raising interest rates, which, in turn, have slowed economic growth and have made interest-bearing securities more attractive than equities. The currency crises also has revealed severe problems in the banking and financial sectors of the troubled Asian economies.

This financial crisis is of interest to the U.S. government for several reasons:

• First, attempts to resolve the problems are led by the IMF with cooperation from the World Bank and Asian Development Bank and pledges of standby credit from the Exchange Stabilization Fund of the United States.
• Second, financial markets are interlinked. What happens in Asian financial markets also affects U.S. markets.
• Third, Americans are major investors in the region, both in the form of subsidiaries of U.S. companies and investments in financial instruments.
• Fourth, the currency turmoil affects U.S. imports and exports as well as capital flows and the value of the U.S. dollar; the U.S. deficit on trade is now rising as these countries import less and export more.
• Fifth, the crisis is causing economic turmoil that is exposing weaknesses in many financial institutions in Asia; some have gone bankrupt. The economic problems of the troubled Asian economies are adversely affecting the United States, Japan, and others.
• Sixth, the crisis may impede the progress of trade and investment liberalization under the World Trade Organization and the Asia Pacific Economic Cooperation (APEC) forum.

The major objectives of the large to promote stability, balanced expansion of trade, and growth, but because of the Asian financial crisis, it has deepened its activities in four directions:

• Strengthening IMF surveillance over member countries' policies,
• Helping to strengthen the operation of financial markets (technical assistance),
• Providing policy advice and financial assistance quickly when crises emerge, and
• Helping to ensure that no member country is marginalized (being left behind in the expansion of world trade and being unable to attract significant amounts of private investment). At the September 1997 annual meeting of the IMF in Hong Kong, the Board of Governors approved moving ahead to develop an amendment of the IMF Articles of Agreement to make the liberalization of international capital flows one of the purposes of the Fund. For the United States, this change would presumably require Congressional approval.

The Asian financial crisis also has raised several questions pertaining to IMF operations:

• The first is whether such crises have increased in scale and whether IMF resources are sufficient to cope with them.
• The second is whether the Fund's willingness to lend in a crisis contributes to moral.
• The third is whether the contagion of financial crises can be stopped effectively.
• The fourth is conditionality-whether the changes in economic policy and performance targets that the IMF requires of the recipient countries are appropriate and effective.
• The fifth is transparency-whether the IMF releases sufficient information to the public, including investors, on its program design and provisions imposed as a condition for borrowing allow for accurate assessment and accountability.
• The sixth is prevention-whether the IMF has sufficient leverage over non-borrowing member countries to prevent financial crises from occurring.

The causes and structural factors contributing to the financial crises include:

• Private-sector debt problems and poor loan quality
• Rising external liabilities for borrowing countries
• The close alignment between the local currency and the U. S. dollar
• Weakening economic performance and balance-of-payments difficulties
• Currency speculation
• Technological changes in financial markets.
• A lack of confidence in the ability of the governments in question to resolve their problems successfully.

Bank Borrowing and Lending
The financial difficulties in Asia stemmed primarily from the questionable borrowing and lending practices of banks and finance companies in the troubled Asian economies. Companies in Asia tend to rely more on bank borrowing to raise capital than on issuing bonds or stock. Governments also have preferred developing financial systems with banks as key players. This is the Japanese model for channeling savings and other funds into production rather than consumption. With bank lending, the government is able to exert much more control over who has access to loans when funds are scarce. As part of their industrial policy, governments have directed funds toward favored industries at low rates of interest while consumers have had to pay higher rates (or could not obtain loans) for purchasing products that the government has considered to be undesirable (such as foreign cars). A weakness of this system is that the business culture in Asia relies heavily on personal relationships. The businesses which are well-connected (both with banks and with the government bureaucracy) tend to have the best access to financing. This leads to excess lending to the companies that are well-connected and who may have bought influence with government officials.

Example

Korean banks and large businesses borrow in international markets at sovereign (national) rates and re-lend the funds to domestic businesses. The government bureaucrats often can direct the lending to favored and well-connected companies. The bureaucrats also write laws regulating businesses, receive approval from the parliament, write the implementing regulations, and then enforce those regulations. They have had great authority in the Korean economic system. The politicians receive legal (and sometimes illegal) contributions from businesses. They approve legislation and use their influence with the bureaucrats to direct scarce capital toward favored companies.

International borrowing involves two other types of risk:

• The first is in the maturity distribution of accounts. As for maturity distribution, many banks and businesses in the troubled Asian economies appear to have borrowed short-term for longer-term projects. Many economists blame such loans for the Asian crisis.
• The second is whether the debt is private or sovereign. Some of this debt is to finance trade and is self-extinguishing as the trade transactions are completed. Mostly, however, these short-term loans have fallen due before projects are operational or before they are generating enough profits to enable repayments to be made, particularly if they go into real estate development.
• As long as an economy is growing and not facing particular financial difficulties, rolling over these loans (obtaining new loans as existing ones mature) may not be particularly difficult. Competition among banks is intense. In the Asian case, as U. S. banks began to restrict lending in certain Asian countries in 1996 and 1997, European banks took up much of the slack. When a financial crisis hits, however, loans suddenly become more difficult to procure, and lenders may decline to refinance debts. Private-sector financing virtually evaporates for a time.
• A structural change in the nature of the borrowing by these Asian countries is that the type of borrowing has shifted away from the government and banks borrowing from international financial institutions (such as the World Bank) or receiving development assistance funds through foreign aid programs to borrowing by private corporations.
• A problem with private sector borrowing in developing market economies is that while individual borrowers may have viable projects, when all borrowing is aggregated and demands for foreign exchange and repayment are tallied, the country can face difficulties. It is a type of fallacy of composition. Even if each individual loan is financially viable, the total of all loans may not be so because the nation may be short of the foreign exchange necessary to meet the repayment schedules.

Money

Money

Money is any good that is widely used and accepted in transactions involving the transfer of goods and services from one person to another. Economists differentiate among three different types of money commodity money, fiat money, and bank money.

Commodity money is a good whose value serves as the value of money. Gold coins are an example of commodity money. In most countries, commodity money has been replaced with fiat money.

Fiat money is a good, the value of which is less than the value it represents as money. Dollar bills are an example of fiat money because their value as slips of printed paper is less than their value as money.

Bank money consists of the book credit that banks extend to their depositors. Transactions made using checks drawn on deposits held at banks involve the use of bank money.

Function of Money

Medium of exchange

Money also acts as a medium of exchange or as a medium of payments. This function of money is served by anything that facilitates trade by being generally accepted by people in exchange for goods and services.  For example: pay for school fees, food, daily expenses, and insurance. Money will then reduce the time and energy spent in barter. The person who owned a cow can now simply sell it to the person who offers the most money for it and then buy the bullock cart from another person who offers him the best bargain. All trade may be considered barter, one good or services is traded for another good or service either directly, or indirectly with money acting as the intermediary. However, this function can only be performed properly if the value of money remains constant.

Unit of account

Money also functions as a unit of account, providing a common measure of the value of goods and services being exchanged. Knowing the value or price of a good, in terms of money, enables both the supplier and the purchaser of the good to make decisions about how much of the good to supply and how much of good to purchase.

Store of value

Money as a store of value that refers to money as an asset that holder of money used it to transporting purchasing power from one time period to another. Therefore, it serves as a store of wealth over time when it retains purchasing power and hold value over time. They keep money for investment. This function will be performed well as long as money retains a constant purchasing power.

Standard of deferred payment

Money allows existence of credit, possible for contract be agreed involving payment in the future. Examples of situations where future payments are to be made are pensions, principal and interest on debt and salaries.  As long as money maintains a constant value through time, it will overcome the problems associated with making future payments with specific commodities.

Motive of holding Money

Transaction motives:

The transactions motive for demanding money arises from the fact that most transactions involve an exchange of money. Because it is necessary to have money available for transactions, money will be demanded. The total number of transactions made in an economy tends to increase over time as income rises. Hence, as income or GDP rises, the transactions demand for money also rises. 

Precautionary motives:

People often demand money as a precaution against an uncertain future. Unexpected expenses, such as medical or car repair bills, often require immediate payment. The need to have money available in such situations is referred to as the precautionary motive for demanding money.  We also hold money in case we need to spend it.

Speculative motives:

Money, like other stores of value, is an asset. The demand for an asset depends on both its rate of return and its opportunity cost. Typically, money holdings provide no rate of return and often depreciate in value due to inflation. The speculative motive for demanding money arises in situations where holding money is perceived to be less risky than the alternative of lending the money or investing it in some other asset. The presence of a speculative motive for demanding money is also affected by expectations of future interest rates and inflation. If interest rates are expected to rise, the opportunity cost of holding money will become greater.

Money multiplier

The money multiplier is a measure of the extent to which the creation of money in the banking system causes the growth in the money supply to exceed growth in the monetary base. A money multiplier is one of various closely related ratios of commercial bank money to central bank money under a fractional-reserve banking system. Most often, it measures the maximum amount of commercial bank money that can be created by a given unit of central bank money. That is, in a fractional-reserve banking system, the total amount of loans that commercial banks are allowed to extend is a multiple of reserves; this multiple is the reciprocal of the reserve ratio, and it is an economic multiplier.

Function of Central bank

1.     Supervision of the banking system:

Central bank supervises the banking system of the country. Central may be responsible for banking system. They collect information from commercial bank and take necessary decision by two ways:

a.) bank examine

b.) bank regulation

2.     Advising the government on monetary policy:

The decision on monetary policy may be taken by the central bank. Monetary policy refers to interest rates and money supply. The central bank will corporate with the government on economic policy generally and will produce advice on monetary policy and economic matters, including all the statistics.

3.     Issue of banknotes:

The central bank controls the issue of banknotes and coins. Most payment these days does not involve cash but cheques, standing order, direct debit, credit cards and so on. Nevertheless, cash is important as bank’s cash holdings are a constraint on creation of credit, as we have seen.

4.     Acting as banker to government:

Normally a central bank acts as the government’s banker. It receives revenues for Taxes and other income and pay out money for t6he government’s expenditure. Usually, it will not lend to the government but will help the government to borrow money by the sales of its bill and bonds.

How Central Bank control money supply

Required Reserve ratio

Required reserves are the percentages of deposit bank hold in cash or a deposit of Fed. If the reserve ratio decreases, the money supply increases and if the reserve ratio increase, the money supply decrease.  The Fed can lower required reserve rate which raises the multiplier effect of high powered money.

For example, it the required reserves went from 20% to 10%, the bank would only need to hold $10,000 in reserves for the initial injection of $100,000. The other $90,000 would be loaned out so at each stage in the multiplier chain, the banks would be loaning out more funds and the eventual increase in the money supply would be larger.

Discount Rate

The discount rate is the interest rate at which the Fed lends reserves to other banks. The Fed can lower the discount rate and lower the costs for banks holding low excess reserves which will lower the excess reserve rate. If discount rate increases, the supply of money will decrease and if the discount rate decreases, the supply of money will increase.

Open Market operations

Open market operations refer to the buying and selling of government bonds in order to change the supply of money. If the Fed sells bonds, the money supply decrease and if the Fed purchases bonds in the open market, increase the money supply by the price of the bonds. The Fed can buy or sell government securities.

For example, the Fed will contact its broker and announce it wants to buy $100,000 of government securities. The increase of $100,000 cash into the system will result in an increase in the money supply of $500,000.