(Penang, Tuesday): Yesterday, I proposed that all Cabinet Ministers set the example of willingness to sacrifice for the country to defend the sovereignty, independence and dignity of the country by collectively submitting their resignations to the Prime Minister to empower him to carry out a major reshuffle to establish a National Economic Crisis Cabinet of calibre and integrity as the important first step in the new year to restore confidence.
I said this was the time when Cabinet Ministers must prove their loyalty and patriotism by giving way to a National Economic Crisis Cabinet of calibre and integrity to check the worsening of the economic crisis, chart the economic turnaround of the country and unite and galvanise all Malaysians to respond as one unit to the economic crisis to achieve the twin objectives of ensuring that the crisis would pass in the shortest possible time and that there would be the minimum of avoidable pain, sufferings and hardships in the coming months.
The collective resignation of the Cabinet Ministers to give way to a National Economic Crisis Cabinet would be like a shot of adrenalin to give Malaysians as a whole and investors in particular hope and confidence that the Malaysian government is at last coming to grips with the national economic crisis.
There has been no response from any Cabinet Minister and I do not expect any response. I am therefore calling this media conference today to release an Open Letter to Cabinet Ministers on the 15 measures they should give priority focus at their first 1998 meeting tomorrow to deal with the full-blown economic crisis which has still to reach its climax.
There should be no need to gainsay the increasing gravity and growing severity of the economic crisis. Yesterday and today marked further watersheds for the economic turmoils in Malaysia. Yesterday, the ringgit crashed another psychological barrier, exceeding RM4 to the US dollar, closing at 5 p.m. at the record low to 4.0650 a US dollar from Friday's close of 3.975 a dollar - the ringgit's lowest ever since it was floated in 1973.
Only yesterday, dealers were quick to point out that the situation would not warrant the ringgit beyond the 4.100 level.
When trading began this morning, the 4.100 level was immediately breached, crashing within minutes to the 4.2750 a US dollar level, and went further down to 4.3400 by the first hour of trading.
It is no consolation for Malaysia that the Indonesian rupiah and Thai baht also plunged to record lows yesterday with the Indonesian rupiah tumbled to 6,750 a dollar while the Thai baht fell to 50.70 a dollar at the close of trading; or that the Indonesian rupiah and Thai baht also plumbed new depths at the open of trading today, with the Indonesian rupiah plunging to 7,550 a dollar while the Thai baht fell to 52.58 a dollar.
The erosion in the South-east Asian currencies is the result of fears that China may devalue the yuan to remain competitive against the regionís exports. A devaluation of the yuan, which is not freely traded on world markets, would spur the growth of Chinese exports faced with rising competition from cheaper Southeast Asian goods and would be a major blow to the regionís economic turnaround and revival.
Now that the RM4-a-dollar psychological barrier has been broken, Malaysians worry whether the RM5 could also be broken in the not too distant future.
The Cabinet would be holding its first 1998 meeting tomorrow in the context of a bleaker and gloomier economic landscape.
The Cabinet should not have gone on vacation last Wednesday on Dec. 31 and should have met to show to the country and people its seriousness in grappling with the national economic crisis.
Be that as it may, I would urge the Cabinet to give priority focus tomorrow to the following 15 measures to deal with the full-blown economic crisis which has still to reach its climax.
1. Confidence-Restoration The government has not been able to restore both people and investor confidence although the country is entering the seventh month of the economic crisis. Although the economic crisis was externally-induced, it had been internally-aggravated. The first step to restore confidence is for the government, from the Prime Minister downwards to Cabinet Ministers and government officials, to demonstrate to the country and the world that it has completely shaken out of the "denial syndrome" which had blinded our decision-makers and planners to our own mistakes and weaknesses and the need for far-reaching political, economic and financial reforms.
2. Information Deficit Information-deficit is the major cause of the failure of the government to restore public and investor confidence. The credibility of the local mass media, both printed and electronic, can only be restored with a new policy to allow for greater press freedom and greater access to information without having to depend on the foreign press, the Internet or the rumour-mill which is created by a short-sighted policy to restrict the flow of information in an era of information technology.
The Cabinet should approve the setting up of a high-powered National Commission, which should comprise members from the Opposition, to undertake a liberalisation of the mass media in Malaysia so as to resolve the grave problem of information deficit.
3. Abandon NEAC The Cabinet should take the courageous decision to abandon plans to establish the proposed National Economic Action Council (NEAC). It is about seven weeks since the announcement by the Prime Minister, Datuk Seri Dr. Mahathir Mohamad after an emergency UMNO Supreme Council meeting on 20th November that the government would set up NEAC to deal with the economic crisis and put the Malaysian economy back on track in the wake of the fall in the value of the ringgit and the stock exchange. Mahathir had then announced that the council, which would be chaired by the Prime Minister, would have emergency powers although a state of emergency had not been declared. The emergency nature and justification of the NEAC has all been lost if it could be deferred by seven long weeks.
The establishment of a NEAC which supersedes or is co-equal with the Cabinet in the important areas of economic policy seriously undermines the principles of Cabinet responsibility and parliamentary democracy. The Prime Minister should carry out a major cabinet reshuffle to remove the deadwoods in the Cabinet, and to form National Economic Crisis Cabinet with technocrats and experts as members of the Cabinet with 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.
4. Establish NECCC Establish a National Economic Crisis Consultative Council (NECCC) comprising representatives from all political parties, both government and opposition, academicians, industry, commerce, trade unions, professional bodies, NGOs, so that it could be a nationally unifying force to unite and mobilise all Malaysians behind a national economic recovery programme to tide the country through the economic crisis in the shortest time possible. To ensure that the NECCC would enjoy public confidence, it should
5. Daimís appointment as NEAC Executive Director If the Cabinet insists on proceeding with the formation of the NEAC, it should reconsider the appointment of the Economic Adviser to the Government, Tun Daim Zainuddin as NEAC executive director so that there would be no two Finance Ministers in the country. The Cabinet should take serious heed of the advice by former Deputy Prime Minister, Tan Sri Musa Hitam that it was right time to put into practice the oft-cited "Asian value" of promoting community interests over that of an individual. He said:"If there are really bad individuals that need to be sacrificed, let it be so. The solutions should be for community interests and the better good of the country." As Daim has been perceived as being part of the problem of the national economic crisis, how could his appointment as the new Supremo in the national economic crisis carry conviction that he could become part of the solution?
6. Make Senate an Elective Chamber Make the Senate an Elective Chamber so that it cease to be a burdensome national irrelevance as a "rubbish-bin for political has-beens, rejects and deadwoods". I have officially written to the Dewan Negara asking Senators to set a good example for the first time in 40 years by showing that they could shake off the "denial syndrome", by stop denying that it has become a "rubbish-bin for political has-beens, rejects and deadwoods", a rubber stamp to the rubber stamp of the Dewan Rakyat, a national irrelevance and a burden to the taxpayersí money.
7. Third 1998 Budget As both the first 1998 Budget of Oct. 17 and the second 1998 Budget of Dec. 5 have failed to restore confidence or to institute far-reaching political, economic and financial reforms needed to tide the country through the national economic crisis in the shortest time possible with the minimum of avoidable pain, sufferings and hardships to the people, there should be an emergency meeting of Parliament this month for a third 1998 Budget to be presented and adopted to better prepare the country and people for the crisis.
8. Implement Vision 2020 concept of Bangsa Malaysia Implement the Vision 2020 concept of Bangsa Malaysia during the national economic crisis as a unifying force for all Malaysians. All economic recovery strategies, plans and measures such as the RM1 billion SMIs fund, the RM100 million National Higher Education Fund, the additional RM100 million allocation for Fund For Food, should be implemented without any discrimination, whether race, personal connection or political affiliation.
9. Good Government The Cabinet must resolve to adhere to the highest principles of good government during the national economic crisis and set an example of austerity, transparency and integrity. It should support the formation of a peopleís movement like the Government Austerity Audit (GAA) in Perak to check on the government at all levels to ensure that all avoidable waste, extravagance, inefficiency, red-tape, abuse of power, malpractices and corruption are exposed and rooted out so that Malaysia will have a lean, dynamic and productive public service. The Cabinet should welcome the establishment of the GAA throughout the country so that it could be the eyes, ears and the voice of the people to monitor and audit the governmentís economic recovery measures to ensure that every government decision, action and measure complies with the highest standards of austerity, efficiency and accountability.
10. All-Out War Against Corruption The government must declare an all-out war against corruption with the coming into force of the Anti-Corruption Act 1997, so that the campaign against corruption which lasted only two months from May to July last year could resume from where it stopped and a national peopleís campaign initiated to create a new culture of integrity in politics and public life with zero tolerance for corruption.
11. Good and Transparent national and corporate governance If the country and people are to suffer acute pains and hardships with the deepening and worsening economic crisis, then let the people at least have the satisfaction to see all the wrongs in national and corporate governance put right and a firm basis laid for transparency, accountability and integrity for the good of the nation.
The Cabinet should resolve that there should be no repetition of outrageous corporate deals and government decisions like the RM2.34 billion UEM-Renong deal which precipitated the biggest crash in the Kuala Lumpur stock market in the six-month economic crisis, causing the KLSE Composite Index to fall by 19.58 per cent, from 667.29 to 536.62 points in three days in November, wiping out RM70 billion of the investors' funds in the stock exchange or the Sabah State Governmentís acquisition of three million shares of the listed company, North Borneo Timber (NBT) through its investment arm, Warisan Harta, precipitating a loss of over RM81 million to the people of Sabah from Dec. 23 till yesterday.
Furthermore, the Cabinet should also resolve that there should be proper accountability by all the corporate or government players concerned in these outrageous corporate deals, whether the UEM-Renong deal or the Warisan Harta-NBT deal.
12. Accountability and Transparency by Bank Negara and the banking and financial sector The Cabinet should take bold measures to ensure accountability and transparency by Bank Negara and the banking and financial sector as well as to resolve the serious liquidity crisis which has resulted in mounting complaints that banks have since the middle of last month, without notice, imposed a credit squeeze and unfairly withdrawn or reduced credit for productive and export-oriented businesses and industries.
The crisis of confidence in the banking and finance sector had been aggravated in the past few months by the governmentís inability to check the shifting of funds from local banks to foreign banks although at much lower interests.
I understand that some RM23.6 billion of funds have been shifted from local banks to foreign banks in the past three months, which is one reason why banks have to cut off credit facilities for productive activities unrelated to unproductive or speculative projects.
The Cabinet should take imaginative steps to resolve this liquidity crisis as in establishing a National Fund to get the support of foreign banks which are awash with funds to be lent out to local banks to ease the liquidity crunch in the country, and to ensure that no local bank would have to withdraw credit facilities for productive activities which would undermine the entire national economic recovery programme.
13. Full public debate on IMF option The Cabinet should take cognisance of the fact that there is an increasing body of opinion in the country believing that the only solution for Malaysia to resolve the national economic crisis is to seek a bail-out from the International Monetary Fund. The DAP has declared that it does not support the IMF option, but the government must encourage a full public discussion on the IMF option - the pros and the cons - so that Malaysians can fully participate in the decision-making process to resolve the economic crisis. Furthermore, such a public debate would enhance the chances that the IMF option would not be forced on Malaysia, as it would focus national attention on the need for the country to self-prescribe some of the bitter IMF medicine to cure our economic sickness without having to resort to IMF bailout.
14 Mechanism to protect interests of Malaysians as against foreign workers in the loss of million jobs this year The Deputy Home Minister has said that there would be a loss of one million jobs this year as a result of the economic slowdown. The Cabinet must set up a mechanism to protect the interests of Malaysians as against foreign workers to ensure that no single Malaysian would be disadvantaged by foreign workers in the loss of jobs.
15. Green-Book Plan - Land For All on First-Come First-Served Basis To reduce the RM9 billion food import bill, all state governments should introduce an innovative feature in the revived Green-Book Plan, to allow Malaysians, regardless of race, to apply for land under the scheme on a "first-come first-served" basis, on a temporary lease only for the duration of the economic crisis.