(Petaling Jaya, Monday): The DAP is prepared to give full support to the National Economic Recovery Plan (NERP) if an in-depth study shows that it is a plan which could finally restore confidence among the people and investors and chart the country’s economic recovery in the shortest possible time.
Unfortunately, up till now, Members of Parliament whether from the Barisan Nasional or Opposition, have not been given copies of the NERP. I telephoned Parliament this morning to ask whether the NERP would be distributed to all MPs, but I was told that there are no indications that the NERP would be tabled in Parliament at all.
The failure of the NERP to stimulate local market confidence has gone into the third consecutive day, as illustrated by the continued plunge of the Kuala Lumpur Stock Exchange (KLSE) Composite Index (CI), which fell to its lowest level of 415.40 points in the year-long economic crisis despite the release of the NERP by Tun Daim Zainuddin last Thursday, and although it recovered by 3 points to 418.40 on Friday, had slided to an all-time low at the close of this morning’s trading, falling by 7.47 points as compared to Friday and registering the shockingly low level of 410.93 points.
The NEAC NERP also had no strengthening effect on the Malaysian ringgit in the past three days of business, hovering between the 4.12 and 4.155 band to a US dollar on this morning’s trading.
In the series of daily DAP responses and comments on the NERP which I issued in Penang yesterday, I had said that rating agency Moody’s Investors Service Inc three-notch downgrade of Malaysia’s sovereign credit rating above "junk" status, a rating normally reserved for risky corporate ventures, last Friday had come as a great blow to the NERP..
Moody’s cut of Malaysia’s long-term foreign currency ceiling for bonds and notes by three notches from A2 to Baa2 could in fact undermine the country's efforts to recapitalise its banking sector.
The agency also slashed the foreign currency bonds ratings of the government of Malaysia from A2 to Baa2, a mere two notches above speculative grade. It further cut ratings for three banks - Malayan Banking, Bank Bumiputra and Public Bank - and two companies, i.e. Petronas and Tenaga Nasional.
As a result of the adverse downgrading of Malaysia’s credit ratings, both the Finance Minister, Datuk Seri Anwar Ibrahim and the Special Functions Minister, Tun Daim Zainuddin, have postponed indefinitely their fund-raising trips overseas in the government’s latest plan for a RM8 billion sovereign bond issue aimed at reviving the Malaysian economy.
It will be very unfortunate if the NERP starts on a wrong footing in failing to win public confidence because of the oversight of the Special Functions Minister, Tun Daim Zainuddin to present it in Parliament to seek parliamentary approval, and I would urge Daim to give this matter his topmost urgent priority attention.
(27/7/98)