Every Malaysian has lost RM33,333 in the past six months from the RM700 billion losses suffered from the twin depreciations in the Kuala Lumpur stockmarket and the ringgit

Speech (1)
- DAP Penang ceramah on the national economic crisis
by Lim Kit Siang

(Bagan, Friday): The first eight days of the new year have 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.

The first week of 1998 had been a horrible week. On Monday, Jan. 6, the Malaysian ringgit breached the psychological barrier of 4.00 level against the US dollar and on Wednesday, threatened to breach the 5.00 level against the US dollar. Today, the KLSE Composite Index broke another psychological barrier by crashing through the 500 point-level.

The ringgit ended today at 4.565 to the US dollar while the KLSE CI ended at 491.6 points, after touching about 480 points.

At the close of trading at the KLSE CI at 491.6 points today, the KLSE Composite Index had depreciated by over 60 per cent from 1,237 points and the KLSE capitalisation had depreciated by some RM500 billion from the previous capitalisation of RM807 billion.

When the ringgit fell to 4.8825 against the US dollar on Tuesday, the ringgit had depreciated by a walloping 93 per cent. With the ringgit closing at 4.565 against the US dollar, the ringgit would have depreciated by 82.6 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 82.6 depreciation would mean a loss of RM206.5 billion.

The total losses from the double depreciation of the Kuala Lumpur stockmarket and the ringgit come to the astronomical figure of over RM700 billion - which is over two-and-a-half times Malaysia’s Gross National Product (GNP) for 1997, which is RM262.2 billion!

This works out to a loss of some RM33,333 for every Malaysian, whether man or woman, adult or child, in the past six months just from the twin depreciations of the Kuala Lumpur stockmarket and ringgit.

Just now, as I was coming into Bagan, I passed the new Penas Sayang Megamall, and the whole area was jam-packed with cars and shoppers as if there is no tomorrow.

This reminds me of a reporter who asked me at a media conference in Petaling Jaya two days ago that during the New Year holidays, the supermarkets in the Klang Valley were packed with shoppers - raising the question as to whether there is a national economic crisis.

I would attribute this phenomenon partly to the success of the government information policy of "denial syndrome", firstly denying that there was any economic crisis in the country and later putting the entire blame for the economic crisis on external factors and forces.

Those who still believe in the propaganda that there is no economic crisis in the country are going to suffer a great trauma when the full effects of the crisis hit them sooner or later.

This is why the DAP is organising various forums and ceramahs in the country to try to address this problem of information deficit and to better prepare the people to face the economic crisis which will become worse before it could become better.

At present, many people feel very lost as to why an economy which the government has described as being of world-class standard has suddenly been brought down so low so quickly in so short a time. Furthermore, the people believe that they have not been told the truth, whether by the government or the mass media.

This is the time for all political parties and NGOs to organise public meetings on the national economic crisis, not to finger-point who should be responsible, but to explain to the people the real nature of the national economic crisis, remove the information deficit, restore the people’s confidence and rally and galvanise the government, society and people as one unit to tide through the national economic crisis and effect a national economic turnaround and revival in as short a time as possible.


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