(Petaling Jaya, Monday): The next six months may be the most difficult and painful months for Malaysians in the national economic crisis, when the people from various sectors will feel the bite of the crisis falling hardest on them.
The Government has itself said that prices of goods are going to increase after the Qongxi Raya double festivities at the end of the month, although prices of a whole variety of goods have already increased without waiting for the Qongxi Raya.
Malaysians who have taken out housing loans would have to pay almost 50 per cent increase in their monthly instalments, unless their housing loan agreements are based on fixed interest rate, which I believe involves only a small percentage. Furthermore, as interest rates are expected to increase in the coming months, the monthly housing loan repayments would continue to increase, imposing even greater hardships on those in the middle and lower middle income groups.
The next six months will see the closure of companies which cannot withstand the rigours of the economic hardships with the Deputy Home Minister, Datuk Tajol Rosli, recently estimating about the loss of one million jobs in this year alone.
What analysts worry most of course is the property slump, which would have far-reaching repercussions on the banking, finance and stockmarket sectors.
It is for this reason that I say that the next six months is likely to be the most painful and difficult six months in the current national economic crisis, and the people must be told to prepare for the hard times.
This is why I was very surprised when the Prime Minister, Datuk Seri Dr.Mahathir Mohamad spoke about economic recovery in six months, a theme which was immediately taken up by other Ministers.
Can the Malaysian economy recover n six months? This is not the view of Malaysian economists. The weekly Bahasa Malaysia newsmagazine, Massa in its latest issue 17-23 January 1998, under the article Apa Kata Pakar Ekonomi Kita, canvassed the expert opinions of economists on the question of economic recovery.
The Deputy Director of the Malaysian Institute of Economic Research (MIER), Dr. Mohd. Haflah Piei, said:
"Ketika ini kita masih belum berada pada tahap apa yang dipanggil bottom down tetapi jika ekonomi negara mencecah bottom down pada suku pertama tahun depan dan mula menunjukkan turnaround recover pada pertengahan 1999, itu sudah cukup baik. Begitu juga kalau ekonomi negara boleh turnaround pertengahan atau suku ketiga tahun 1999, ia juga sudah cukup baik. Untuk balik kepada asal, mungkin agak sukar tetapi kalau kita dapat mencapai semula pertumbuhan lapan peratus menjelang 2001 atau 2002, itu merupakan satu lagi keajaiban."
Another economist, Dr. Ghazali Atan, Chief Executive Officer of Metrowangsa Sdn. Bhd., said that at least two years are needed to restore the domestic economy.
The Government should explain what it means by "economic recovery in six months". Under the revised second 1998 budget on Dec. 5, the economic growth targetted for this year is 4-5 per cent. Does "economic recovery in six months" means the Malaysian economy performing better than 4-5 per cent rate of growth for this year?
While the people must be prepared to face even harder times in the next six months, there is no reason for them to be pessimistic about the future economic outlook as I am convinced Malaysians should be able to pull together to tide through the economic crisis to stage an economic recovery and return to good economic growth rates.
Malaysia should have been able to better weather the Asian economic crisis if the Malaysian economicmanagement and banking and financial system had been sound and the government had avoided a series of self-inflicted wounds.
The question is how long is going to be the economic crisis and when there could be an economic recovery - six months, one, two or three years?
What is needed now is for the government to take the people fully into its confidence to bring about a two-way co-operation whereby the government, society and people can respond as one unit to tide the country through the economic crisis in the shortest possible time with the minimum of avoidable pain, hardship and suffering to the people.
(20/1/98)