(Petaling Jaya, Wednesday): There has been an avalanche of bad news and adverse reports about the Malaysian economy which is proof that the National Economic Action Council (NEAC) has failed in its first fundamental task to restore confidence as the NEAC Executive Director, Tun Daim Zainuddin said in February that the country’s "greatest challenge is to bring back the confidence of Malaysians first and then, the world economic community".
Confidence has become such a scarce commodity that repeated assurances by the Deputy Prime Minister, Datuk Seri Anwar Ibrahim that the Asset Management Corporation is not a bailout agency and that the government will not let it be one lacks credibility after a series of bail-outs which the government has refused to admit as bailouts, such as those involving the UEM, KUB and Konsortium Perkapalan Bhd.
The Hong Kong-based Political and Economic Risk Consultancy Ltd, for
instance, in its latest update on its Malaysia Country Risk Report, commented:
The Fortune magazine, in its May 11, 1998 issue, carries a series of articles entitled "The Great Emerging Markets Rip-Off", focussing on Malaysia and in particular on the UEM-Renong case, describing it as "a symbol in the international investing community for all that was wrong with the country, and with Asia in general", quoting one American mutual fund manager as saying: "Malaysia went past a turning point where it became very obvious to global investors that the government was going to save itself first at the expense of the foreigners, and that no rule is safe, no law is safe."
Time magazine of May 18, 1998, in its report on "Asia’s Bad
News", started with the following passage:
Yesterday, Singapore Business Times reported a United Kingdom research house forecasting that Malaysia’s economy next year would contract by 1.4 per cent this year in contrast to the government’s latest forecast of 2 to 3 per cent growth this year.
Today, the Singapore Business Times reported that private economists are forecasting that Malaysia's Q1 growth will come in at between minus one per cent and plus 2 per cent.
Even those whose Q1 predictions lie in positive territory agree that Malaysia is entering the first throes of recession.
The gloomy economic picture is very different from the one that government leaders had been painting that the worst of the economic crisis is over, when it is clear that the worst is yet to come - and the continued refusal of the government to be frank and truthful about the economic situation is a basic cause as to why it has failed to bring back confidence of the people and the world economic community.