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THE STAR BUSINESS NEWS 4 Jun 2014 KUALA LUMPUR: YTL Corp Bhd is not buying any assets at the moment due to inflationary pressure, says group managing director Tan Sri Dr Francis Yeoh. "The environment is very difficult for YTL to buy assets, because all these assets are inflated," he said. "From 2008 till today there is nothing major that we can acquire," he said at the Global Malaysia Series talk yesterday. He explained that the United States and the European countries had introduced inflation to the world but not in their own economies, by printing money. Warning that the global bubble would burst within two to four years, he said that this would be the first government-led bubble created by the US and European governments. QUELY Dore TAN SRI FRANCIS YEOH MANAGING DIRECTOR YTL CORPORATION Ich TO **If you want high wages to keep up with inflation but without increasing productivity, you're going to have a problem," Yeoh said, adding that sovereign funds in Asia should be investing in infrastructure development to boost productivity. He said Asia had a high savings level but had not used it yet to build the amount of infrastructure needed. Yeoh declined to comment when asked about the direct-tender award by the Energy Commission (EC) to YTL Power International Bhd for the development of 1,000MW-1,400MW power plant in Pasir Gudang, Johor. YTL Power, a wholly-owned subsidiary of YTL Corp, announced yesterday that it had received a letter of award from the EC to develop a combined-cycle power plant.. The proposed combined-cycle gas turbine power plant, which is a fast-track development known as Project 4A, was awarded to SIPP Energy Sdn Bhd, with the participation of YTL Power and Tenaga Nasional Bhd as consortium members. It was reported that SIPP Energy is linked to the Sultan of Johor. The move to offer the conditional offer came about after the EC decided that there was a requirement to fast-track the construction of the plant that was scheduled to be operational in 2018. (excerpt) Business Economics ECO 501 Questions: (05 Marks) 1. YTL did not buy property during inflationary period. Identify the reasons given by Tan Sri Dr. Francis Yeoh for not buying property by YTL during inflationary period 2. Productivity does not increase when wages (salary) increased during inflation, Assess the statement with examples (10 Marks) (15 Marks) 3. Compare and contrast a scenario when the rate of productivity could be increased higher than the rate of increase in wages to the workers (your answer should not be less than 500 words)