(Petaling Jaya, Sunday): On Friday, the Kuala Lumpur Stock Exchange (KLSE) Composite Index (CI) plunged into uncharted territory when it reached an all-time low of 363.1 level, 11.68 points lower than the previous day's end of trading or a walloping 58.81 points since the announcement of the National Economic Recovery Plan (NERP) on July 23.
Three days ago, the Malaysian economy suffered another blow when a third rating agency, Thomson Bankwatch downgraded Malaysia’s sovereign risk rating to BBB from A-, the third rating agency to do so after Moody’s Investor Service Inc. and Standard & Poor.
The downgrading of Malaysia’s sovereign credit rating had already created a new round of crisis of confidence, causing the shelving of government plans for an international roadshow aimed at raising US$2 billion (RM8.4 billion) from bonds by the Deputy Prime Minister and Finance Minister, Datuk Seri Anwar Ibrahim and the Special Functions Minister, Tun Daim Zainuddin, in their separate fund-raising trips overseas.
Malaysian economists are highly critical of the downgrades by the three international rating agencies, with one saying that the three-notch downgrading at one go "are too much", though a downgrade on Malaysia by one notch might be appropriate.
The National Economic Recovery Plan (NERP) has conceded that one root cause of the 13-month long economic crisis is the crisis of confidence, and that "restoring confidence is as much a matter of perceptions and social psychology as of realities and economic fundamentals".
If the National Economic Action Council (NEAC) which prepared the NERP is serious in its conclusion that confidence-restoration is the perequisite to economic turnaround and recovery, then it should send an expert mission to meet with the rating agencies, whether Moody’s, Standard & Poor or Bankwatch to convince them that they are too pessimistic and not paying adequate attention to the economic fundamentals of Malaysia.
It is most regrettable that although it is coming to the third week since the official publication of the NERP by the Special Functions Minister, Tun Daim Zainuddin, the NERP is still not freely available to the public. In fact, Members of Parliament have not yet been given copies of the NERP.
How can the NERP get the whole-hearted support of all Malaysians to be the basis for effecting the quickest-possible economic turnaround and recovery when the Plan is not free available to the people to study and discuss it?
At the DAP forum "NERP - 13 months of the worst economic crisis" held at the Kuala Lumpur Federal Hotel on Thursday, 6th August 1998, the DAP did a national service by putting up limited copies of the NERP for sale - at RM25 a copy.
Those who wish to get copies of the NERP can contact the various DAP state offices or DAP MPs and State Assembly members to place their orders so that we can produce copies for them.
The NEAC should explain why it is facing such great difficulties in making copies of the NERP freely available to the public, which is not a very favourable publicity about the NERP, in particular the capability of the NEAC and the various government authorities to implement the various proposals and recommendations in the Plan.
(9/8/98)