(Kampar, Sunday): We are in the fifth month of a national economic and financial crisis, where the country has suffered colossal losses as a result of the twin currency and stock market crisis.
The value of the ringgit has fallen as low as US$1=RM3.6800, which is a drop of over 47 per cent in the ringgit's value – and once reaching the all-time low of 3.8650 against the US dollar. The Prime Minister, Datuk Seri Dr. Mahathir Mohamed has used a formula in various international conferences to compute the actual losses suffered by Malaysians as a result of the ringgit depreciation. On the basis of a per capita income of US$5,000 in Malaysia, a 47% depreciation would mean a loss of US2,350 per Malaysian. Multiplied by the country's 20 million population, the loss to the country due to the depreciation of the ringgit would be US$47 billion or RM172.96 billion by current exchange rate.
The Kuala Lumpur stock exchange has suffered even greater losses in the stock market crisis, as the KLSE Composite Index had fallen by 60 per cent. In his Ministerial statement in Parliament last week, Deputy Prime Minister and Finance Minister, Datuk Seri Anwar Ibrahim said that the market capitalisation of the Kuala Lumpur stock exchange had been reduced by RM414 billion, i.e. from RM806.8 billion at the end of 1996 to RM392.8 billion as at Dec. 4, 1997.
In the context of RM172.96 billion loss as a result of the currency crisis and the RM414 billion loss as a result of the stock market crisis, totalling RM586.96 billion, the RM2 million savings from the ten per cent salary cut of Ministers, Deputy Ministers, Mentri-Mentri Besar, Chief Ministers and three per cent allowance cut of MPs and Assemblymen are quite insignificant.
In fact, this figure of RM2 million is not even enough for the renovation of the Selangor Mentri Besar's residence, which required RM5 million!
What is shocking however is that there are many Malaysians who still think that the economic and financial crisis would have minimal impact on everyday life on the ground that the the country's fundamentals are strong, national savings rate is high, exports are rising and the current accounts deficits are coming down.
These are Malaysians who fully trust in the Government and have therefore become the victims of the "denial syndrome" which had been the major thrust of government propaganda. This is a great tragedy, for the government, the country and the people have spent five months denying that there is a national economic crisis instead of using these precious months to begin to tighten belts, identity our policy mistakes and weaknesses and work out a national economic recovery strategy.
The state of denial of the country that there is a national economic crisis and the failure generally to acknowlege that it would cause great pain, hardships and sufferings on the people must be regarded as the greatest obstacle to the success of any national economic recovery programme.
Only last month, newspaper editors were directed not to use the word "economic crisis" so as not to cause unnecessary alarm and panic among the people.
There must be a new information strategy of frankness with the people, and the mass media, both printed and electronic, must be told to tell the plain unvarnished truth to let the people know that Malaysia is going through a great econonomic crisis, which would get worse before it could get better. The people must be told that there is no way to avoid the economic crisis and that the only question is how long the economic crisis would last. The Government must be more democratic, accountable and transparent as the basis to develop confidence-building measures to rally Malaysians to tide through the economic crisis in the shortest time possible.
The Government must get out of its habit of thinking that it knows what is best for the country and people, and its series of policy mistakes and misjudgements in handling the national economic crisis is proof that the government is not the sole repository of wisdom about what is best for the people.