(Petaling Jaya, Thursday): Today is a dark day in the long and arduous road to effect an economic turnaround and recovery, with the Malaysian ringgit tumbling to below the RM4=US$1 level this morning, while the Kuala Lumpur Stock Exchange Composite Index continued its precipitate decline, at one time falling by 21.71 points to 562.91 as compared to the previous day, ending at the end of this morning's closing at 568.31.
It was only two days ago that the Deputy Prime Minister and Finance Minister, Datuk Seri Anwar Ibrahim said in Parliament about "signs of recovery", referring to the KLSE index composite closing at 627.43 points on May 4 while the ringgit had "stabilised" on the same day at RM3.6600 to the US dollar.
In a matter of two-and-a-half days, the KLSE CI had plunged by 59.12 points while the ringgit weakend to 4.07 against the US dollar!
Columnist and former top civil servant, Tan Sri Ramon Navaratnam had rightly commented last Saturday that "It is ominous that the claim by our DPM that 'the worst is over for Malaysia's economic troubles' had a cool reception in New York".
As pointed out by Ramon, the chairman of Morgan Stanley Asset Management Barton Biggs, responded that our DPM's assurance was "very interesting", and he commented: "To me his response was deadpan and somewhat dismissive especially when he added that 'he will go back and think about it'!"
In New York, another response was from Richard Price of College Retirement Equities Fund who said: "You are only human. You mess up, you hit a rough spot you pull together and you come out of it."
The relevant questions are whether the Malaysian leaders are prepared to admit that they had "messed up and hit a rough spot" and that they must pull the country together to come out of it.
The recent speeches and statements by the Prime Minister, Datuk Seri Dr. Mahathir Mohamad recirculating his old allegations that the economic crisis in Malaysia was caused by foreign currency speculators and denying any local responsibility whatsoever is an answer in the negative.
I do not know how Anwar could claim in New York that the "worst is over" when the Kuala Lumpur stock market had been on the downward decline after a short three-week rally after the Qongxi-Raya holidays on February 27, when the composite index reached its highest level this year at 745.36 points.
In the month of March, the KLSE CI lost 25.60 points, i.e. from 745.12 on March 2 to 719.52 on March 31. In the month of April, the KLSE CI suffered a precipitate drop of 75.08 on April 1 to 625.97 on April 30.
In the two-and-a-half months from Feb. 27, the kLSE CI had dropped by 177.05 points, indicating that "the worst" is not over.
Clearly, the time has come for a new confidence-restoration strategy to be put in place as the government's present strategy has failed to check the further deterioration of the economic crisis and to start a turnaround and a recovery.
(7/5/98)