(Petaling Jaya, Sunday): I do not know whether to be happy, angry or skeptical at the statement by the Government Economic Adviser and Executive Director of the National Economic Action Council (NEAC) Tun Daim Zainuddin in his interview which appeared in the Singapore Straits Times yesterday that the country’s "greatest challenge is to bring back the confidence of Malaysians first and then, the world economic community".
Happy because my recurring theme in my speeches and statements since the onset of the economic crisis last July that the single most important issue facing the country was the restoration of confidence seems to have received the highest government attention and recognition at long last; angry because it has to take eight long months before there could be such attention and recognition from the highest levels of government.
This was why on 20th October last year, I had opened the debate in Parliament on the 1998 Budget presented by the Finance Minister, Datuk Seri Anwar Ibrahim, three days earlier with the statement that "The acid test of the 1998 Budget is whether it could restore investor confidence to address the twin ringgit and stockmarket crisis".
Despite the sky-high praises given by the other Barisan Nasional leaders to the 1998 Budget as a "confidence boost" and "a necessary prescription", I had in the debate on the 1998 budget called on Anwar and the Treasury officials to "go back to the drawing board to ponder the clear signal of lack of confidence in the 1998 budget", stressing the need for "good and consistent policies" and "transparency".
In fact, ten days later, on 30th October 1997, I openly called for a second 1998 budget as the original 1998 budget "had failed to address the fundamental issue of restoring confidence in the Malaysian economy or to check the twin currency and stock market crisis, as both the Malaysian stock market and ringgit have embarked on a sharp decline from budget day on Oct. 17".
My call for a second 1998 budget was not heeded until seven weeks later when Anwar introduced his package of emergency financial package on December 5, 1997.
In his interview with the Singapore Straits Times yesterday, Daim admitted that "The Malaysian government should have moved much faster to tackle the currency crisis and restore investors' confidence". The Singapore Straits Times yesterday reported:
"Asked if he was happy with the government's response to the crisis, he thought for a while and then replied: ‘The government understood the problem. I wish we had moved much faster.’
"Foreign investors lamented the fact that the country's leaders were doing a lot of talking instead of getting on with the job.
"In the first three or four months after the devaluation of the ringgit, Prime Minister Datuk Seri Dr Mahathir Mohamad and other politicians hit out at currency speculators, accusing them of impoverishing people of this region.
"Tun Daim, who was the former Finance Minister, has an explanation for this behaviour.
"He said that Malaysia had, for too long, championed the rights of the poor and of less developed nations.
"At the onset of the crisis, it felt it had to ‘continue championing these causes’, especially since the weaker nations seemed to have been hit by currency depreciation.
"But that episode should not be taken to mean that Malaysian leaders did not know what to do or were in denial.
He said they had much experience in handling crisis situations, referring to the 1969 race riots, the recession in the mid-80s and the break-up of Umno in 1987.
"’We have leaders who know how to address these issues. We are very calm.’
"So, how are they going to bring about the recovery of the Malaysian economy, which is estimated to grow at between 4 and 5 per cent, a far cry from the years of 8 per cent growth?
"The first step involves getting local businessmen and traders to hold on to the ringgit, he said.
"The minute the exchange rate improves, they sell the local currency to buy US dollars to pay for the imports. This activity undermines the ringgit.
"Once the ringgit stabilises, the recovery will take place very fast, he added.
"He was optimistic because the savings rate of Malaysians was very high and the government's financial position was sound.
"Furthermore, there were sectors like petroleum, palm oil and the shipping industry which earned US dollars.
"’Our political situation is stable. As such, the government is very focused on what it is doing and not distracted,’ he said."
If the Malaysian government had heeded the advice of the DAP right from the very beginning of the economic crisis that the greatest problem and challenge facing the country was restoring confidence of the people and the foreign investors, Malaysia would have been in a better stead today.
I had said that I also do not know whether to be skeptical, because the DAP’s repeated call for the end of the "denial syndrome" and for full recognition of the crisis of confidence during the 42-day Parliamentary debate at the end of last year was completely ignored. Furthermore, in my Open Letter to Cabinet Ministers dated January 6, 1998 before their first 1998 Cabinet meeting on the 15 measures they should give priority focus to deal with the full-blown economic crisis, I had mentioned confidence-restoration as the No. 1 national priority agenda.
It is precisely because confidence-restoration has not been achieved that there is such poor response to the government’s various calls, as urging Malaysians to sell their properties overseas and bring back the proceeds to put in the local banks in Malaysia or to donate their jewelleries to the government to strengthen the country’s foreign reserves.
One way for the NEAC to demonstrate that the challenge of confidence-restoration is being addressed is to make a success of such campaigns.
From July to January, Malaysia’s foreign reserves fell by some RM14 billion because of misguided attempts by the Bank Negara to defend the ringgit against the US dollar.
Let the NEAC organise a proper natonal campaign to get the support of Malaysians to raise RM14 billion to restore the country’s external reserves to the position before the economic turmoils in July last year, with the political leadership and the top 300 corporate bosses in Malaysia setting the lead to raise RM14 billion to recoup the losses suffered by the country’s external reserves during the economic crisis, whether through sale of their overseas properties or conversion of their valuable holdings, whether gold, jewellery and other precious stones and metals.