(MU, Kuala Lumpur, Wednesday): The topic, "Economic Crisis - Until When?" is a question which the Prime Minister, Datuk Seri Dr. Mahathir Mohamad is trying to answer, as it is undoubtedly the single question which will decide when he will dissolve Parliament and call general elections.
I believe I will win my 10-sen wager with him as to whether general elections would be held this year, for Mahathir will call early general elections unless his assessment is that we have turned the corner in the economic crisis, that the worst is over and there can only be good news in the coming months.
However, if his assessment is that the worst is yet to come, that at present there is no light at the end of the tunnel, then it would be prudent for him to call early general elections.
In early January, Mahathir spoke of economic recovery in six to twelve months, although the MCA President, Datuk Seri Dr. Ling Liong Sik beat him to it, by claiming then that economic recovery could come in three months.
In January, the government was forecasting GDP growth of 2 to 3 per cent this year, but now the government has revised it downwards to a -1 per cent to -2 per cent GDP contraction. Private economists and analysts, however, are not optimistic as they are forecasting a GDP contraction of -4 to -5 per cent this year.
Early this year, economists generally talked about economic recovery in one to two years, but now they are talking about economic recovery in four to five years.
In the 19 days from July 23, when Tun Daim Zainuddin announced the National Economic Recovery Plan (NERP) prepared by the National Economic Action Council (NEAC) to August 11, the Kuala Lumpur Stock Exchange (KLSE) Composite Index (CI) fell by 80 points from the 421.91 benchmark to 334.70 points. The Malaysian ringgit weakened to over RM4.2 against the US dollar.
These are not market votes of confidence in the NERP, which has been dubbed as a plan to save the Malaysian economy.
The NERP suffered another serious setback when the government had to shelve plans for an international roadshow aimed at raising US$2 billion (RM8.4 billion) from bonds. The separate overseas trips by the Deputy Prime Minister and Finance Minister, Datuk Seri Anwar Ibrahim and the Special Functions Minister, Tun Daim Zainuddin, were postponed following a sovereign ratings cut by credit-rating agencies Moody's, Standard & Poor's and Thomson Bankwatch to just above "junk bond" status.
That the biggest problem facing any economic recovery plan is confidence-restoration has been acknowledged by the NERP, which states in its opening chapter:
"Since one reason for the currency crisis is the crisis of confidence, the restoration of confidence would be an important step to tackle the currency crisis. However, restoring confidence is as much a matter of perceptions and social psychology as of realities and economic fundamentals. It is imperative to quickly address the underlying problems - both real and perceived - that had set off the crisis."
It is tragic that 13 months after the worst economic crisis in the nation�s history, the government has to be told of this by the NERP, when DAP Members of Parliament, analysts and economists had been making this very point in the past one year!
One important reason why 13 months after the economic crisis, the prospects for Malaysia looks even more gloomy and bleak is because of the deepening political crisis, the perception of the increasingly acute differences between No. 1 and No. 2 to the extent that there are two Finance Ministers in the country and three captains on the Malaysian ship.
Yesterday, the Deputy Prime Minister and Deputy UMNO President in Penang pledged his loyalty and love for Mahathir and declared that all the 11 Penang UMNO divisions have declared their support for Mahathir and would nominate Mahathir for the presidency in next year�s UMNO polls.
What is significant is Mahathir�s cynical response, where, as reported by the Sun today, Mahathir "hoped that Penang UMNO leaders will not only nominate him as party president but also vote for him".
It is still to be seen as to how long the latest pledge of unity and solidarity between No. 1 and No. 2 could last.
Immediately after the NERP was announced, the Prime Minister said that the Government will implement most of the recommendations of the NEAC in full unless specific objections are raised. The Deputy Prime Minister said the Government will ensure all recommendations of the NEAC are implemented according to schedule and hastened if possible, and that weekly meetings to guage the progress of the six-point plan recommended by the NEAC would be held if necessary.
How many recommendations are there in the NERP and what are the recommendations
in the NERP which the government has accepted for implementation?
If the NERP is to be a People�s Plan motivating and mobilising Malaysians
to respond as one unit to effect the fastest-possible economic turnaround
and recovery, the people should know about the NERP recommendations.
In fact, the Government should list out the number of recommendations
of the NERP it want implemented with a weekly public report of the
progress of their implementation.
It is most regrettable that up to now, MPs have not received copies of the NERP, nor is it available publicly. As the NERP is supposed to be the economic salvation blueprint for Malaysia after 13 months of worst economic crisis, there can be no excuse why the NERP has not been made easily accessible to the public although it is now three weeks since its announcement.
The NERP should be the hottest topic of debate in all the university campuses, not only among academicians but also among university students. In fact, the economic crisis and the NERP should be the most formative influence for the present generation of university students - but this is not the case. There is a total blank and a vacuum - as I am sure no student has seen the NERP at all let alone discussing what should be the remedies and solutions to the worst national economic crisis for Malaysia.
(12/8/98)