How can Rafidah describe Malaysia's economic crisis as a "mild case of cough" when the RM651 billion losses from stockmarket and ringgit depreciation is equal to two-and-a-half times the 1997 Gross National Product (GNP)?


Speech
- meeting of Selangor state & branch leaders
by Lim Kit Siang

( Wisma DAP Selangor, Klang, Monday): It is most unfortunate that government Ministers continue to undermine government credibility with ill-chosen statements about the six-month-long economic and financial crisis which would only hamper efforts to restore public confidence, which is a prerequisite if both the country is to tide through the economic crisis in the shortest time possible with the minimum of avoidable pain, suffering and hardships to the people.

I find it very surprising that the latest Government Minister who is aggravating restoration of confidence by making statements which undermine government credibility should be the Minister of Interntional Trade and Industry, Datuk Seri Rafidah Aziz, who had always been very careful in her words.

Yesterday, when launching the Charity Bazaar organised by the Segambut UMNO division's economic and entrepreneur development bureau, Rafidah who likened Malaysia's economic crisis to a "mild case of cough" and claimed that the government was not in any way responsible for the economic crisis - which has completely nullified her message that the International Monetary Fund's aid to troubled economies in Asia is not a "cure-all".

I agree that Malaysia should not seek aid from IMF, but I find Rafidah's statement yesterday as undermining the case why Malaysia should not follow the example of Thailand, Indonesia and South Korea to seek an IMF bail-out.

As a result, instead of demolishing the arguments that Malaysia should seek aid from the IMF, Rafidah's ill-chosen statements have fortified the beliefs of those who favour the IMF option as the only viable solution for Malaysia's economic crisis.

Rafidah made the valid point that the prescription to pull Malaysia's economy out of its slump should not be assumed to be similar to that applied for other troubled countries in the region, as the "illness" afflicting countries such as Indonesia, Thailand and South Korea are different from Malaysia's.

She said: "For example, one country may be suffering from pneumonia, while another from respiratory diseases such as asthmatic bronchitis.

"Therefore, it is not appropriate to adopt the same measures taken by these countries, for example, seeking a rescue package from the International Monetary Fund (IMF), if Malaysia is just experiencing a mild case of cough".

This is a most shocking and outrageous statement, sending out the signal that the Government and its leaders have not shaken out of the "denial syndrome" which they had cocooned themselves, the corporate world and the people at large in the past six months.

Malaysians must be reminded by the statement by one of the corporate leaders of Malaysia, Tan Sri Tajuddin Ramli, the Chairman of MAS, who said in Langkawi during LIMA '97 that "There is no big economic crisis here except a slight currency depreciation"!

How can a senior economic minister on 28th December 1997 claim that the Malaysian economy is only "experiencing a mild case of cough" when the the Kuala Lumpur Stock Exchange had depreciated by RM443 billion as at Friday (26th December 1997) or 55 per cent from RM807 billion, and the Kuala Lumpur Stock Exchange Composite Index had fallen by another 55 per cent from 1,237.96 to 560.96?

What about the colossal losses suffered by the country as a result of the depreciation of the ringgit? Last Friday (26.12.1997), the value of the ringgit closed at US$1=RM3.8550, which is a drop of 54 per cent in the ringgit's value. 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 54% depreciation would mean a loss of US2,700. Multiplied by the country's 20 million population, the loss to the country due to the depreciation of the ringgit would be US$54 billion or RM208.17 billion at the value of ringgit on Friday’s close of trading.

The stockmarket losses of RM443 billion and the ringgit depreciation losses of RM208 billion comes to an astronomical total of RM651 billion - which is two-and-a-half times Malaysia’s Gross National Product (GNP) for 1997, which is RM262.2 billion.

How can a responsible senior economic minister like Rafidah dismiss the losses suffered by the country amounting to two-and-a-half times the country’s GNP as "a mild case of cough"?

Rafidah should retract and apologise for making such insensitive statement at a period of the national economic crisis, to set an example to all other Ministers and government leaders to be very careful in their statements and speeches so as not to rub salt in the people’s would and further undermine public confidence in the government.

What is equally shocking is Rafidah’s refusal to concede that the government should bear any responsibility for the economic crisis, dismissing the catalogue of self-inflicted wounds in the past six months which have caused market sentiments to plunge from one nadir to another nadir, as reflected from the unprecedented nose-dives of both the KLSE CI and the Malaysian ringgit.

These self-inflicted wounds include the designation of 100 stocks in August, the threat to use the Internal Security Act against journalists and financial analysts for unfavourable reports about the Malaysian economy, the RM60 billion fund to prop up share prices, the arbitrary rulings by the Foreign Investments Committee, the UEM-Renong deal and the announcement by the Prime Minister on Dec. 4 that the government would proceed with the RM10 billion landbridge project linking northern peninsula and southern Thailand.

Yesterday, Rafidah urged Malaysians to show confidence in the Government's efforts to overcome the country's economic woes by taking a common stand that it was for the best. She said this was the time for Malaysians to prove their steadfastness and patriotism as "we did not create these problems. The problems came to us from outside".

Malaysians, including opposition parties, are prepared to take a common stand with the government to work for economic turnaround and recovery, but it cannot be on the basis that the people must accept that the Government was blameless in its management of the finance and the economy of the country.

It is generally agreed that it serves no purpose to point fingers to look for those responsible for the economic crisis, as there is clearly room for debate and dispute as to whether external or internal causes must bear greater responsibility for the economic and financial crisis. For the country and the people at the moment, the most important task is to unite all Malaysians in a common national effort to work for economic recovery.

Far from rallying the people behind the government in a national economic recovery programme, statements and speeches like the one made by Rafidah would have the opposite effect of further undermining public confidence that the government is serious and prepared to lead the people through the hard times ahead.

The Government must be bold and frank enough to admit that it is also prepared to accept responsibility for the national economic crisis, although it would blame the likes of George Soros as the main culprit for the crisis. But up to now, the government is not prepared to make any such admission, as reflected by Rafidah’s speech yesterday.

I call on the Prime Minister, Datuk Seri Dr. Mahathir Mohamad and the Cabinet to send out clear signals which could contribute to confidence-building and Government ministers and leaders should stop doing or saying things which are totally counter-productive in restoring confidence.

(29/12/97)


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