(Petaling Jaya, Friday): The National Economic Action Council (NEAC) National Economic Recovery Plan (NERP) has failed its first test in being unable to stimulate market confidence despite the upbeat release of the Plan by the Minister with Special Functions, Tun Daim Zainuddin, as seen in the lowest Kuala Lumpur Stock Exchange Composite Index yesterday throughout the year-long economic crisis since July last year.
At the close of trading yesterday, the KLSE Composite Index fell 1.54 per cent or 6.51 points as compared to the previous day, ending at 4.15.40 points. The lowest the KLSE CI had fallen during the year-long economic crisis was 421.31 points on July 13, 421.91 points on July 22 and now 415.40 on July 23 - very much worse that the depth plumbed by KLSE CI on January 12, when it fell to 477.57 on January 12 - at around the time when the Prime Minister, Datuk Seri Dr. Mahathir Mohamad was talking about economic recovery between six to twelve months while the MCA President and Transport Minister, Datuk Seri Dr. Ling Liong Sik spoke of an economic recovery in three months, i.e. by April this year!
Can the NEAC NERP prevent the KLSE CI crashing through another psychological barrier to go below the 400-point level, considering the statements made by Daim last year when it was at the 800-point region that the KLSE CI was undervalued and advising Malaysians to go into the shares market to pick up bargains?
The NEAC NERP also had no stimulating effect on the Malaysian ringgit, which ended almost unchanged at 4.1500/1650 to a US dollar against the previous day’s close of 4.1500/1700.
When releasing the NERP yesterday, Daim said the most urgent and critical need was to restore investor confidence in Malaysia’s macro-economic stability.
Such confidence cannot be restored by the release of a plan, entitled "Agenda for Action" with the six-prong strategy of:
How can their repetition by Daim restore market confidence when their repeated declaration by Anwar Ibrahim had failed to achieve that effect?
Daim rightly said that the most urgent and critical need was to restore confidence, which the government had dismally failed in the past one year.
Unfortunately, Daim and the NEAC have undermined confidence-restoration efforts by the contempt they have shown to Parliament and even the Finance Minister in the way the NEAC NERP was released yesterday.
The proper place for Daim to present the NEAC NERP report was to Parliament, especially as Parliament was debating the 1998 Supplementary Supply Bill yesterday, which should be the most important debate in Parliament on the national economic crisis in the past one year, even more important than the parliamentary debate on the 1998 budget in October-December 1997 as the Malaysian economy had worsened with no light at the end of the tunnel.
The NEAC NERP should be the very subject of debate when the 1998 Supplementary Supply Bill is tabled for second reading yesterday, but MPs knew nothing about the details of the NERP.
Even now, I have not received a copy of the NERP when the report should have been tabled in Parliament yesterday so that all MPs could get a copy to study and debate it.
I said the release of the NERP outside Parliament yesterday is not only a contempt of Parliament but of the Finance Minister, as it had reduced the Parliamentary debate into the 1998 Supplementary Supply Bill into an irrelevance!
Is this the way to go about the "most urgent and critical need to restore
investor confidence in Malaysia’s macro-economic stability"?
Going by Malaysian "parliamentary tradition", the six Opposition Private Members’ Bills and the 12 Opposition motions, would be "killed" as no time would be allocated by the government to debate them.
Be that as it may, I call on Daim to give full respect to Parliament by formally tabling the NEAC NERP in Parliament, and to extend the present Parliamentary meeting to the first week of August to devote four full days of debate to a plan which has been described as one which would "steer the country out of the current financial crisis and put it on the road to economic revival". Daim should move the motion on the NEAC NERP in Parliament on August 3 for a four-day debate to justify his confidence that after the -1% to -2% Gross Domestic Product (GDP) contraction this year, there might be a mild growth next year and that after 1999, the country could grow by 5% to 6%, when only two days earlier, the Malaysian Institute of Economic Research (MIER) forecast a GDP contraction of -2.9 per cent, while other economists and analysts are forecasting in gloomier prospects of up to -4% to -5% GDP contraction for this year.
MIER executive director, Dr. Mohamed Arif also said that high growths seen previously of 7% and above would only be achievable again in four to five years - i.e. 2,002 to 2,003, in contrast to Daim’s forecast of GDP growth of 5% to 6% from 2,000 onwards.
Daim should realise that the NEAC must not bypass or belittle Parliament by treating MPs, whether Barisan Nasional or Opposition with contempt; that this is counter-productive to the second prong of the NERP strategy to restore market confidence.
From the parliamentary debate on the 1998 Supplementary Supply Bill yesterday, it is clear that not only ordinary Malaysians and MPs generally know very little about the NEAC, even Ministers and Deputy Ministers are quite in the dark about the operations of the NEAC.
During the debate yesterday, I had lamented the lack of accountability and transparency in the NEAC’s establishment and operations.
As an example, I said that although the NEAC had been established for more than six months, nobody knows the full membership of the NEAC Executive Council.
When I asked whether any Minister or Deputy Minister in the House could stand up to enlighten Parliament as to the full constitution of the NEAC Executive Council, there was silence, until the Deputy Human Resources Minister, Datuk Abdul Kadir bin Haji Sheikh Fadzir stood up to say that the composition of the NEAC Executive Council was generally known by the people as it had been repeatedly announced in the mass media.
I challenged this statement and asked Abdul Kadir to name the members of the NEAC Executive Council. He was unable to do so, claiming that he had forgotten about it, and that they comprised professional people.
I corrected him, pointing out that the professional people he referred to are serving on the NEAC working committees and not the NEAC Executive Council.
In the event, history was made in Parliament yesterday when the Opposition had to inform the government front-bench about the composition of the NEAC Executive Council.
I told Abdul Kadir as well as the Ministers, Deputy Ministers, Parliamentary Secretaries and the Barisan Nasional MPs that the NEAC Executive Council comprised of five members, namely Prime Minister and the Deputy Prime Minister as Chairman and Deputy Chairman respectively and Tun Daim Zainuddin as the executive director. There are two other members appointed by the Prime Minister. I told Parliament that the Chairman of the Institute of Strategic and International Studies (ISIS), Tan Sri Noordin Sopie is the fourth member of the NEAC Executive Council but nobody knows who is the fifth member!
There should not only be a full Parliamentary debate on the NEAC NERP, there should also be a full debate throughout the country.
DAP has set up a three-member committee to study the NEAC NERP, namely DAP National Vice Chairman and MP for Kepong, Dr. Tan Seng Giaw, DAP Deputy Secretary-General and MP for Kota Melaka, Lim Guan Eng and myself, and in the next ten days, we will be daily making public our reactions to the NERP.
(24/7/98)