Government should shake out of the "denial syndrome" whether to blame foreigners for causing the economic crisis or to look for a new scapegoat by blaming the private sector and initiate a nation-wide process process involving all sectors of society to formulate and implement a Malaysian Economic Recovery Programme ala-IMF without having to resort to IMF


Media Statement
by Lim Kit Siang

(Petaling Jaya, Friday): In the just concluded 42-day meeting of Parliament, DAP MPs had in speech after speech called for the purging of the "denial syndrome" so prevalent in government and among Barisan Nasional MPs which is hampering a realistic handling of the five-month-long economic crisis as well as undermining public confidence in the credibility and capability of the government to formulate and implement proper policy responses to galvanise all Malaysians in an united endeavour to effect an economic recovery and turnaround in the shortest time possible.

At times, we were accused by the more irrational Barisan Nasional MPs for being anti-national and even disloyal to Malaysia for trying to pinpoint our own policy mistakes and errors which had contributed to and aggravated the national economic crisis, but we persisted, and by the end of the budget meeting, we are glad to see that even the Prime Minister, Datuk Seri Dr. Mahathir Mohamad has moved away from his earlier position putting all the blame of the economic crisis on foreign forces and external elements.

Last Sunday, in his speech to ASEAN business leaders before the ASEAN Summit, Mahathir said Asian governments and businesses were party to blame for the regionís financial crisis and that ruthless surgery was needed.

He said: "There had been many abuses and malpractices, including of course large foreign borrowings and deficits in the balance of payment. These abuses on their own would have resulted in slowing down growth or even reversing it."

Mahathir said: "Asian nations will have to allow unviable businesses to die, and companies will have to retire unnecessary workers as a surgeon would amputate an infected limb. "

"What is not viable must be killed outright so the survivors can be free to consolidate their positions. As a doctor who once practiced surgery, I appreciate the need to amputate gangrenous legs to save the rest of the body.

"What we have to do is surgical. And we will do it. We must reassure the world that we will carry out what we have undertaken to do, at whatever cost. We hope that in the end we will restore confidence and the wealth will flow back."

Unfortunately, these strong statements by Mahathir calling for "strong surgery" to effect a national economic recovery were only to be read in the foreign mass media and were not reported in the local media, whether radio, television or newspapers - giving Malaysians the impression that the government still blames the national economic crisis primarily on external forces and elements like George Soros.

In the past few days, local businessmen have been singled out for causing the national economic crisis.

Government Economic Adviser, Tun Daim Zainuddin said in Sungai Petani two days ago that the economic problems faced by the country have been caused by the private sector which overexpanded and concentrated mainly on the property sector.

"It had also pushed the share prices too high. It becomes a problem when the prices drop," he said.

Daim said that the private sector had neglected its responsibilities to the country and forgot to be cautious by preparing for "lean times".

I do not think the government can restore confidence if it is seen to be interested only in picking on the private sector as the new scapegoat for the national economic crisis, refusing to admit to the government's own mistakes whether in policy or practices, as it is the government which is finally responsible for the tens of billions of ringgit of mega-projects which had to be postponed, as well as dubious mega-loans in the banking sector for which there has still to be proper transparency and accountability.

Yesterday the Prime Minister seemed to be taking up this theme when he told local businessmen that loyalty to the nation and confidence in the ringgit can help speed up recovery from the current economic problems.

He said that if businessmen were to put their interests above everything else and show their lack of confidence in the ringgit by taking measures to this effect, then the currency will fall further. He appealed to the business community to exercise great discipline and to set aside short-term interests so that economic recovery could take place on a continuous basis.

The appeal of the Prime Minister to the business community to set aside short-term interests for the sake of economic recovery is right and proper - except that it is not just the business community which must set aside short-term interests, but all sectors of the Malaysian society must do so, and it is imperative that the political leadership in government should set the example of setting aside one's interests for the larger national interest.

Although Ministers and Deputy Ministers and Members of Parliament have set an example in voluntary 10 per cent cut of salaries and three per cent cut of allowance, society expects the political leadership to provide a stronger example in areas which really matter.

I have suggested in Parliament, for instance, that there should be a major Cabinet reshuffle so that a National Economic Crisis Cabinet could be formed, where the deadwoods in the Cabinet would be removed, replaced by an infusion of new blood, tapping experts and technocrats both in the private and public sector who have the expertise and knowledge to deal with the national economic crisis, and most important of all, who can command public confidence in their integrity, competence and dedication.

Are Cabinet Ministers prepared to set aside their self-interests for the sake of the larger national interests to ensure a successful national economic recovery and turnaround in the shortest time possible, by voluntarily giving way to allow a National Economic Crisis Cabinet of technocrats to be formed?

Mahathir warned that if Malaysians were not willing to sacrifice now, then the country would be forced to ask for foreign assistance and warned that an IMF bail-out would come with conditions that would lead to many local companies suffering losses and going bankrupt.

The question is whether the government can come out with a Malaysian Economic Recovery Programme ala-IMF of its own, without having to resort to IMF - in other words, for Malaysia to self-prescribe some of the necessary but bitter IMF medicine to restore the health of the Malaysian economy without having to ask for S.O.S. from IMF. The government should shake out of the "denial syndrome" whether to blame foreigners for causing the economic crisis or to look for a new scapego at by blaming local businessmen and initiate a nation-wide process involving all sectors of society to formulate and implement a Malaysian Economic Recovery Programme ala-IMF without having to resort to IMF.

(19/12/97)


*Lim Kit Siang - Malaysian Parliamentary Opposition Leader, Democratic Action Party Secretary-General & Member of Parliament for Tanjong