(Petaling Jaya, Thursday): The first seven days of the new year has proved to be worse than the six months of the economic crisis last year raising the spectre as to where is the rock bottom for the worst of the Malaysian economic crisis, whether the Kuala Lumpur bourse, the Malaysian ringgit or the other economic sectors and indices, such the property sector, unemployment, economic growth rate, etc.
When 1997 ended, Malaysians had hoped that they could wish goodbye to a horrible year and that there would be over a month's breather until after the Qongxi Raya before they face an inflationary spiral with increase in the prices of commodities, goods and services.
What Malaysians never expected was that there was going to be no respite whatsoever and that both the Malaysian ringgit and the Kuala Lumpur stockmarket would suffer terrible bashing in the first seven days of the new year.
The new year started ominously when the first working day, January 2, closed with the KLSE Composite Index dropping 22.48 points to 571.96 from 594.44 and the ringgit fell to 3.94 against the US dollar as compared to 3.8700 at the close on 31st December 1977.
Since Monday, Jan. 5, the Malaysian ringgit continued its downward plunge for three consecutive days, breaching the pscyhological barrier of 4.00 level against the US dollar on Monday and threatening to breach the 5.00 level yesterday. The KLSE fell to a new low of 521 points yesterday.
Two days ago, when the RM4-a-dollar psychological barrier was broken, I said that Malaysians worry whether the RM5 level could also be broken in the not too distant future. I regard it as a great tragedy that two days later, a new question has to be posed, as to whether the RM6 level could be broken in the not too distant future.
As at the close of trading yesterday, Malaysia has suffered astronomical losses as a result of the bloodbaths suffered by both the Kuala Lumpur stockmarket and Malaysian currency as compared to the end of 1996.
At the close of the KLSE CI at 521.00 yesterday, the KLSE had depreciated by 57.9 per cent from 1,237 and the KLSE capitalisation depreciated by 58.5 per cent or RM472.3 billion to reach RM334.7 billion yesterday.
When the ringgit fell to 4.8825 against the US dollar, the ringgit had depreciated by a walloping 93 per cent. With the ringgit closing at 4.59 against the US dollar as a result of Bank Negara intervention, the ringgit would have depreciated by 83.6 per cent.
Using the famous formula of the Prime Minister, Datuk Seri Dr. Mahathir Mohamed at 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 83.6 depreciation would mean a loss of RM209 billion.
The total losses from the double depreciation of the Kuala Lumpur stockmarket and the ringgit totals the astronomical figure of over RM681.3 billion - which is two-and-a-half times Malaysiaís Gross National Product (GNP) for 1997, which is RM262.2 billion!
The regional economic hurricanes of the first week of the new year caused by external factors like fears that China may devalue the yuan to remain competitive against the regionís exports and doubts about the efficacy of the massive bailouts led by the International Monetary Fund to troubled economies of Thailand, Indonesia and South Korea, and yesterday, by investor dismay at the Indonesian budget underlined two important lessons for Malaysia:
Firstly, that in the world of increasing globalisation Malaysia cannot insulate herself from being adversely affected from regional and international economic forces and developments.
Secondly, the urgency of making confidence-restoration the single national preoccupation in Malaysian economic management so as to strengthen the resilience of the economy to better weather the stormier economic crisis in the coming months when Malaysia is buffetted by the regional hurricanes like those of the past week.
Today, I received an email from a Malaysian in Auckland, New Zealand, who made the following proposal:
"Perhaps it's time to call on the government to adopt a bi-partisan approach in tackling the current economic crisis. Mahathir has still failed to realise that, to instil public and investors' confidence, Malaysia must be seen to be adopting a united front, and everyone, Barisan or opposition alike, is serious about confronting the problem. It's just like war now. And in war, the country comes first. Politics come last. "Another option could be to declare a 'ceasefire' on playing politics for the duration of the crisis, so that all effort could be concentrated on the issue.
"The DAP could also suggest that ALL government spending exceeding $250,000 must be approved by the PM or the Emergency Committee. And all state spending of $50,000 must be approved by a special state committee consisting assemblymen from all elected parties represented in that chamber."
DAP fully agrees with this concerned Malaysian from New Zealand and this is why I had proposed the establishment of an Opposition-headed National Economic Crisis Consultative Council which should comprise of representatives from all political parties, both government and opposition, academicians, industry, commerce, trade unions, professional bodies, NGOs, to 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.
I know when I made the proposal that the NECCC should be headed by the Opposition, it was regarded as outrageous by many and there were even members inside the DAP who thought such a proposal would make the NECCC suggestion completely unacceptable as it was unthinkable that Mahathir could agree to an Opposition-headed NECCC.
I agree that this is an "unthinkable" proposal. But we are facing a completely unthinkable economic scenario. Who would have found it thinkable six months ago that the Malaysian ringgit would plunge to 4.882 against the US dollar, the Kuala Lumpur stock market waiting for the 500-point barrier to be broken, the government talking about the loss of one million jobs this year?
These were all unthinkable six months ago, but they have all come about. It is time that everyone in Malaysia must be prepared to think the unthinkable, like an Opposition-headed NECCC, in the face of the national economic crisis which has not reached it worst impact. By making this proposal, the DAP is making a commitment to make a national contribution to help in resolving the national economic crisis, as although we are not part of the problem we are prepared to be part of the solution.
I would therefore commend the proposal of the Malaysian from New Zealand that the time has come for a "bi-partisan" approach to address the national economic crisis to the serious consideration of the Prime Minister, the Cabinet and the nation.