TALK of overwhelming debt does not only surface in Malaysia.
A study by Goldman Sachs indicates that the
world is sinking under too much debt and an ageing global population is
not helping the situation either, said The Telegraph.
'There is too much debt and this represents a
risk to economies. Consequently, there is a clear need to generate
growth to work that debt off but, as demographics change, new ways of
thinking at a policy level are required to do this,' Andrew Wilson, head
of Europe, Middle East and Africa, was quoted as saying.
'With life expectancy increasing rapidly, we
no longer have the young, working populations required to sustain a
debt-driven economic model in the same way as we've managed to do in the
past,' added Wilson.
Japan, where gross government debt has
climbed above 200% of GDP, is an example where the ageing population
could work against it.
The Organisation of Economic Co-operation
and Development (OECD) has warned that Japan's gross government debt was
on course to balloon to more than 400% by 2040 if the government did
not carry out reforms, said The Telegraph.
'Japan's future prospects depend on ensuring
fiscal sustainability over the long term. With a budget deficit of
around 8% of GDP, the debt ratio is set to rise further into uncharted
territory,' Angel Guria, OECD secretary-general, was quoted as saying.
More creative policies, including
immigration and workforce expansion, were needed in order to find ways
to pay down the debt, said The Telegraph, quoting Guria.
In Britain, housing charity Shelter had
warned that at the rate house prices were rising, only 20% or one in
five, of 25- to 34-year-olds would be on the property ladder in 2020
compared with 60% recorded 10 years ago, said the Guardian.
In recent years, soaring house prices and
problems with getting mortgages have pushed more young households in
Britain into the private rented sector.
In 2004, just over 675,000 people aged 25-34 were tenants. However, by 2014, the number was 1.6 million, said the Guardian.
As home ownership becomes increasingly difficult, Shelter said the number of renters could rise to 2.3 million by 2020.
There is also a 'clipped-wing generation' of young adults living with their parents.
The concern over young home ownership has
spilled over to many cities including Sydney where soaring prices have
led to issues on home affordability.
In Malaysia, Johor has called upon Bank
Negara to relax its regulations on banks in approving loans for eligible
house buyers especially first timers in the state, said The Star.
House buyers have also called on the Government not to limit the building of affordable houses for bumiputra buyers only.
While affordability is an issue for the
young generation, increasing risk for property investors is a warning
sounded by the Reserve Bank of Australia's deputy governor Philip Lowe.
'Household debt is high, property prices are
very high, household income growth is slow, the unemployment rate has
drifted up '“ all those things would suggest there has been an increase
in the level of risk, particularly as people have bought property for
investment purposes,'' Lowe was quoted as saying by the Sydney Morning
Herald.
Meanwhile, a US Federal Reserve's survey has
revealed that many Americans are not financially prepared for
retirement, with almost a third of working adults without savings or a
pension.
About 38% of the more than 5,800 respondents
have either no intention to retire or plan to keep working for as long
as possible, said Reuters, quoting the Fed's 2014 Survey of Household
Economics and Decision-making.
Only 53% of the respondents said they could
cover a hypothetical emergency expense costing US$400 without selling
something or borrowing money, said Reuters.
'Thirty-one percent of respondents report
going without some form of medical care in the past year because they
could not afford it,' the Fed was quoted as saying.
High indebtedness, housing affordability,
retirement and poverty etc are all social issues that remain unresolved
despite the glowing reports of wealth and success.
They remain as major challenges to developed
and developing economies as young and old are involved with different
sets of problems.
Are we just going to focus on the upper
strata of society and neglect those at the lower end, or are we just
going to give them a bite of our attention while we move onto to 'bigger
things of our own interest?''
Columnist Yap Leng Kuen reckons that 'not all that glitters is gold.'
