(Petaling Jaya, Monday): The Prime Minister, Datuk Seri Dr. Mahathir Mohamad, announced yesterday that a special body to receive donations and contributions from Malaysians to increase the countryís reserves would be set up soon.
He said the move had been approved by the Cabinet and contributions could be made in any form, including property, goods, jewellery and cash.
Speaking at the launching of the Ehsan Wanita investment campaign by Wanita Barisan Nasional yesterday, Mahathir said the donations would not be used for investment to buy shares but to increase the countryís reserves in helping the governmentís efforts to revive the economy.
The Government should be prepared to act with greater accountability and transparency so that it call for public donations and contributions to save the national economy could be more effective and successful.
For instance, I had repeatedly raised my concerns about Malaysiaís external reserves on three important grounds but I have not been able to elicit any meaningful response from the government.
My first concern is with regard to the nationís international reserves, which had fallen by RM11.5 billion from RM70.6 billion on 30th January 1997 to RM59.1 billion as on 31st December 1997; and which fell by another RM2.5 billion ringgit in the first 15 days of January, falling to RM56.6 billion on 15th January 1998.
The country lost RM2.5 billion in international reserves when Bank Negara had to intervene in the money market in the first week of January to shore up the ringgit, when it breached the psychological RM4 level to the US dollar on 5th January and again when it fell to the historic low of 4.8800 against the US dollar on 7th January 1998. Bank Negara intervened a third time on January 9 to sell dollar at 4.70 until it went down to 4.65, with the local currency quoted at 4.5600 against the greenback at the close of trading as compared to 4.6250 at the previous day's close.
This is the second major loss in the nation's international reserves in the seven-month-long financial crisis as a result of Bank Negara entering the money market to defend the ringgit. The first time was in the first half of July last year when the international reserves lost RM8.8 billion because of Bank Negara's interventions to defend the ringgit.
Bank Negara's international reserves on 30th June 1997 was RM70.7 billion, which fell to RM61.9 billion on 15th July. On 30th June, the value of the ringgit was US$1= RM2.5235, and it was US$1=RM2.5560 after Bank Negara had spent RM8.8 billion to defend the ringgit.
My second concern is whether it was wise and prudent for Bank Negara to lose RM14.1 billion international reserves to defend the ringgit in the past six-and-a-half months?
In retrospect, was it wise and prudent for Bank Negara to spend RM8.8 billion to prop up the Malaysian ringgit in the first half of July, propping up the ringgit at 2.5560 against the US dollar on July 15, when the ringgit continued to depreciate against the US dollar in the subsequent months, to 2.6360 on 31st July, 2.9620 on 29th August, 3.1975 on 30th Sept, 3.4370 on 31st October, 3.5010 on 28th November, 3.8900 on 30th December and 4.5450 on 27th January.
After losing RM8.8 billion in the losing battle to prop up the ringgit in the first half of July last year, was it prudent for Bank Negara to intervene in the first week of January to prop up the ringgit, which proved to be another losing battle costing another RM2.5 billion?
Shouldn't there be more informed national debate as to what the Bank Negara should do when the ringgit comes under attack in such circumstances?
My third concern is whether the international reserves should be strengthened, especially as Malaysia's external debts of US$45.2 billion more than double the external reserves.
In setting up a special fund for Malaysians to make donations and contributions to increase the countryís reserves, is the Government now admitting that the DAPís three concerns about the external reserves are valid and justified, and if so, is the government prepared to act with greater transparency and accountability by allowing an informed national debate on these three issues?
It is a matter of great relief that Mahathir clarified that the donations would not be used for investment to buy shares, for the government has still to send out a clear and unmistakable message that all national resources would be used for a national bail-out, and not for any individual or private bail-outs.
It is a month since I asked for a meeting with the Employees Provident Fund Executive Chairman, Tan Sri Sallehuddin Mohamed to seek assurance that all EPF investment decisions in the financial crisis are in the best interest of the nine million EPF contributors and not to bail out any troubled stocks or companies.
This is because there is growing concern among the workers in Malaysia about their provident fund in view of several highly controversial decisions and developments concerning the EPF, and the lack of accountability and transparency to satisfy the contributors that all EPF investment decisions are in the best interests of the EPF.
For instance, there was a recent report that EPF might have lost RM4 billion in the Kuala Lumpur Stock Exchange last year, which is bound to have a most adverse bearing on the dividend that could be declared on the RM130 billion EPF investments for last year - which fell from the traditional 8 per cent till 1995 to 7.5 per cent in 1996.
If a public servant entrusted with public funds like the EPF Executive Chairman is afraid to meet with DAP Members of Parliament to discuss public concerns about EPF investments, how can the government expect the people to have full trust and confidence or believe that there would be greater accountability and transparency in the stewardship of public funds?
Mahathirís clarification that the donations would not be used to buy shares is particularly important, especially as yesterday, the Information Minister, Datuk Mohamad Rahmat had announced the establishment of a National Loyalty Fund for Information Ministry officials to contribute with the purpose of investments in the share market.
Mohamad Rahmatís announcement was given great publicity over the electronic media, and although he said contributions to the National Loyalty Fund would be voluntary, it is implicit that those who do not contribute to such a fund would be deemed to be quite lacking in "loyalty" to the nation, which must have a bearing on their promotional future in the Ministry and government.
Is it right to equate the issue of "loyalty" with contributions to buy shares, and secondly, is it proper to collect public donations just to buy shares - and what shares?
Efforts to mobilise and galvanise public support to respond as one unit in the face of the national economic crisis must be nationally unifying rather than nationally divisive - and this is why it is important that the government should involve all segments of society in a joint effort to rescue the national economy through a policy of openness, accountability and transparency.