Malaysia idles for twin festivals<\/p>\n
By Christina Pantin<\/p>\n
KUALA LUMPUR (Reuter): Malaysia's economic boom is grinding to
\nan almost complete halt, but festivals, not fiscal measures, are
\nresponsible for the production pause.<\/p>\n
For the second straight year, the country is observing two
\nmajor holidays back-to-back -- the Chinese Lunar Year and the
\nMoslem Eid al-Fitr. The festivities will shut down most
\nfactories, plantations and businesses for a week.<\/p>\n
Malaysia, with a 21 million multicultural population of Malay,
\nChinese and Indians, already provides a string of public holidays
\nto mark key ethnic and religious celebrations.<\/p>\n
Normally it is only every 30 years or so that two of the
\nbiggest festivals fall one after another. This year, most
\nbusinesses will be closed from Feb. 6 to 11.<\/p>\n
Economists say while month-on-month growth and output may show
\na dramatic drop due to February's double festivals, the impact is
\ndiscounted as an explainable, one-time event.<\/p>\n
Producers make up for the shortfall by speeding up assembly
\nlines before or after the holidays and some high-demand sectors
\nincluding the electronics industry may not even shut down.<\/p>\n
\"To the extent that it's expected, some businesses try to ship
\nout more (product) before the holiday period,\" said Rajeev Malik,
\nsenior economist at Jardine Fleming.<\/p>\n
When dual festivals were observed last year, Malaysia's gross
\nexports dropped 19.3 percent from January. But exports then
\nsurged 39.8 percent in March from February.<\/p>\n
The impact was more muted when the festivals were in separate
\nmonths. In 1995, for instance, Chinese New Year was observed at
\nthe end of January-early February and Eid al-Fitr in March.
\nGross exports slipped 6.2 percent in January from December, fell
\n4.5 percent in February from January and rose seven percent in
\nMarch from February.<\/p>\n
All in all, the festivals will not divert Malaysia from
\nwrapping up a decade of over eight percent growth, analysts said.<\/p>\n
K. Gopalan, industry and trade division manager at the Penang
\nDevelopment Corp, said that with demand for electronics products
\non the upswing since slumping badly last year, some companies may
\nbe prepared to pay overtime this holiday.<\/p>\n
Northern Penang island state is the hub of Malaysia's
\nelectronics and electrical production. Electronics parts are the
\nbiggest export earners for Malaysia, generating about 20 percent
\nof total export income.<\/p>\n
For the electronics manufacturers, having the two holidays
\ntogether may actually be a blessing, an industry analyst said.
\n\"They can shut down once\" instead of twice in two separate
\nmonths, said Bernard Tan, analyst at Merrill Lynch in Singapore.<\/p>\n
Agricultural production, still an important component of
\nMalaysia's economy, will show a contraction this month, industry
\nexperts said.<\/p>\n
Palm oil mills will be closed for about four days, while
\nestates will be shut for a week or longer if most workers are
\nIndonesian. Many workers will spend a long holiday in
\nneighboring Indonesia.<\/p>\n
Output could drop by at least 15 percent in February, an
\nofficial at a major palm oil plantation firm said.<\/p>\n
Some rubber tappers will be idled for seven to 10 days, also
\nreducing crop production. But because stocks are ample, supply
\nshould see minimal impact from the lost work days, dealers said.<\/p>\n
\"Production should drop by between 20 to 30 percent due to the
\nfewer working days this month and coupled with wintering which
\nhas started in the northern region,\" said a plantation source.
\n\"There will be very limited tapping activities for about a week,\"
\nhe said.<\/p>",
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