(Petaling Jaya, Wednesday): The National Economic Recovery Plan (NERP) which has been adopted by the government as the national economic salvation plan has recommended "more frequent release of economic data to allow analyses and to increase transparency" as an important step to restore confidence.
Malaysians are still waiting, for instance, for the government to release the third quarterly GDP data - as the people are anxious to know how the Malaysian economy had performed in the third quarter after the -1.8 per cent GDP contraction in the first quarter and -6.8 per cent GDP contraction in the second quarter of the year.
In view of the fact that the NERP of the National Economic Action Council (NEAC) has been elevated to be the most important national plan to rescue the country from the worst economic crisis ever faced by Malaysia, its recommendation for "more frequent release of economic data" to restore confidence should have been acted with desptach, with the third quarterly economic data being released even earlier than the first and second quarterly data.
Last Thursday, the Singapore Government announced that its economy shrank by 1.5 per cent in the third quarter of this year - the first contraction since the last recession in 1985 following a 1.6 per cent growth in the second quarter and 6.1 per cent growth in the first quarter.
The question Malaysians want to ask is why the Malaysian government is unable to announce the third quarterly GDP performance for the Malaysian economy, in view of the NERP’s high-profile recommendation for more frequent release of economic data to restore confidence - when this can be done by the Singapore government.
The NEAC has a forthnightly review as to whether its recommendations are being implemented by the various government agencies and it should focus on the issue as to whether its proposals to strengthen public and corporate governance and enhance transparency and accountability is being taken seriously by the government.
If so, why the silence on the Employees’ Provident Fund’s RM6 billion acquisition of new government bonds, RM3 billion in new 15-year bonds with a coupon rate of 8 per cent in a private placement from Bank Negara, and another RM3 billion of 20-year bonds with a coupon rate of 8 per cent.
This RM6 billion government bond issue to EPF is the biggest use of public money since the imposition of capital controls on September 1.
The eight million EPF contributors are entitled to know the full purpose of the use of RM6 billion of EPF monies for the new government bond issue, especially as there are legitimate fears that the government will be using public funds to bail out the politically well-connected few rather than to benefit all Malaysians.
In this connection, the government should pay special note to the views by several internationally-renowned economists that Malaysia’s recent capital control measures are unnecessary and could be redundant.
Professor Jeoffrey Sachs of the Harvard Institute of International Development, for instance, said: "The capital control measures may prove to be unnecessary. Other countries in Asia such as Thailand and South Korea are already recovering and they are doing so without these measures. The measures come at a time when they are no longer needed, and these kinds of crises have an end of their own."
The government should announce whether it is seriously considering the proposal by Columbia University Professor Jagdish Bhagwati that the Malaysian government should set a date when it will remove the capital control measures, suggesting a time-frame of from six months to a year.
(4/11/98)