(Petaling Jaya, Monday): Yesterday, in commemoration of the 41st National Day, the Prime Minister, Datuk Seri Dr. Mahathir Mohamad led a convoy of 2,713 Proton cars across the 13.4 km Penang Bridge - the longest bridge in Asia.
Edaran Otomobil Nasional Berhad managing director Datuk Adzmi Abdul Wahab, who was a passenger in the car driven by Dr. Mahathir, said this was the longest single brand convoy in the world and his company will apply that this event be listed in the Malaysian Book of Records and the Guinness Book of Records.
Malaysians should suspend all efforts to get listed in the Guinness Book of Records and focus their energies in establishing the important record of the fastest turnaround and recovery after 14 months of the worst economic crisis in the nation’s history.
It is no use establishing world records as having the longest single brand convoy in the world, the tallest building in the world, the longest bridge in the world or the biggest dam in the world, if the Malaysian economy ends up in establishing a world record as taking the longest time of all the Asian economies affected by the recent turmoils to turnaround and recover when the Malaysian economy was not the hardest hit of the Asian economies!
A look at where key Asian stock indices stand as compared to their 1997 highs reveals that the Kuala Lumpur and Bangkok indices are down about 75 per cent, while Singapore, Korea and the Philippines have given up 60 per cent. Jakarta is down about 50 per cent, Taiwan has lost 32 per cent and Japan's Nikkei 28 per cent.
Malaysia’s real gross domestic product (GDP) in the second quarter underwent a contraction of 6.8 per cent, which means that for the first half of the year, the Malaysian economy has contracted by 4.8 per cent.
The Malaysian Government should make public its latest revised forecast for the GDP contraction for 1998 now that Malaysia has formally entered into a recession, as two consecutive quarters of negative growth technically constitute a recession.
When Hong Kong announced last Friday hat its economy had contracted by 5 per cent in the second quarter of the year, plunging the territory formally into recession, the Hong Kong government also announced that its forecast for 1998 gross domestic product (GDP) had been revised to a decline of around 4 per cent.
Why can’t the Malaysian Government immediately announce its revised forecast for 1998 following the 2.8 per cent and 6.8 per cent GDP contraction for the first and second quarters respectively?
In this connection, the reaction of Stanley Morgan Dean Witter Research, which was quoted favourably by Cabinet Ministers as well as the National Economic Action Council (NEAC) when it defended its NERP proposals, to the second quarter economic indices is most noteworthy.
Before the publication of the second quarter GDP of minus 6.8 per cent, Morgan Stanley forecast a -2.7 per cent GDP contraction for the Malaysian economy in 1998. With the sharper-than-anticipated second quarter GDP contraction, which exceeded its forecast of a 4% contraction and the market consensus estimate of a 4.8% drop, Morgan Stanley has immediately changed its our forecast for the Malaysian economy in 1998 to a 3.5% contraction.
Does the government agree with Morgan Stanely’s latest revised forecast of a -3.5 per cent negative growth for the Malaysian GDP this year - which is very much worse than the government’s latest revised forecast of -1 per cent to -2 per cent GDP contraction for the whole year.
The government may now attack Morgan Stanely for being unduly pessimistic, but in the past 14 months of the economic crisis, it is the government which has proved to be unduly optimistic in its forecast of various economic indicators as the final results were invariably worse than the so-called "unduly pessimistic" forecast of private economists and analysts.
(31/8/98)