World Bank Presidentís praise should not make Malaysians complacent that we are out of the woods of the economic crisis


Media Statement
by Lim Kit Siang

(Petaling Jaya, Tuesday): The praise of the World Bank President, James Wolfensohn that Malaysia "has got the capacity to deal with the crisis" and that Malaysia was "not one of the countries Iím deeply concerned about now" should not make Malaysians complacent that we are out of the woods of the economic crisis.

A realistic attitude is particularly important especially as the Kuala Lumpur Stock Exchange, together with other Asian markets have "roared" into the Year of the Tiger with substantial gains, with evidence that foreign confidence in the region was returning.

Malaysians must prove that they are capable to taking both good and bad news, not being elated by the good but wanting to hide from the bad.

In this connection, Malaysians must give thought to last weekís report of the Institute of International Finance (IIF), a global assocation of financial institutions with over 280 members based in Zurich, Switzerland, which grouped Malaysia with Indonesia, Philippines, South Korea and Thailand as "the five economies most affected by the Asian crisis".

The IIF Report, entitled Capital Flows to Emerging Markets, stressed that net private capital flows into "the five economies most affected by the Asian crisis" fell from US$93 billion in 1996 to an outflow of US$12 billion in 1997. The IIF forecast that for 1998, there would be a continued private capital outflow from these five countries to the tune of US$9.4 billion.

Bank Negara and the Finance Ministry should issue a statement on the implications of the IIF report for Malaysia.

Other important aspects of the IIF report include:

(3/2/98)


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