(Petaling Jaya, Monday): For over a month, the worst 15-month economic crisis in the nationís history has been overshadowed by the political turmoils and crisis precipitated by the shocking and unprecedented sacking of Datuk Seri Anwar Ibrahim as Deputy Prime Minister and Finance Minister on Sept. 2, to the extent that there has been a serious loss of public focus on the economic crisis.
The Prime Minister and Finance Minister, Datuk Seri Dr. Mahathir Mohamad, the Minister for Special Functions on economic affairs, Tun Daim Zainuddin, and other top government policy makers like the Bank Negara Malaysiaís new governor Tan Sri Abu Hassan Sulaiman and the director-general of the Economic Planning Unit, Datuk Dr. Samsuddin Hitam are expected to among speakers at the two-day National Congress on Economic Recovery beginning tomorrow.
Mahathir and Daim should use the two-day National Economic Recovery
Congress to answer some the pressing questions on the national ecnomic
situation, including the follows:
Malaysia sank into its first recession in 14 years when gross domestic product shrank 2.8 percent between the first quarters of 1997 and 1998 and by 6.8 percent in the year to the second quarter. Private economists have forecast a negative growth of over 5 per cent for this year.
2. An assessment of the effects of the exchange controls imposed on Sept. 2. The government pegged the ``official'' exchange rate of 3.8 ringgits per U.S. dollar. Three days ago, WEBS Index Fund, Inc. in the United States announced that in computing the net asset value of its Malaysia (Free) WEBS Index Series, values denominated in Malaysian ringgits will be converted into U.S. dollars at an exchange rate of 4.47 Malaysian ringgits per U.S. dollar.
The Fund said that its use of the 4.47 ringgits per dollar rate corresponds with the use of that rate by the Fund's investment adviser, Barclays Global Fund Advisors, for all of their accounts holding Malaysian investments. The 4.47 ringgits per dollar rate is considered by the Fund and Barclays to be a better measure of value than the official Malaysian exchange rate. The Fund said that its use of the 4.47 ringgits per dollar rate would be continued until further notice.
3. Report on the structural reforms to the economy to take advantage of the foreign exchange controls. As economist Paul Krugman wrote in his open letter to the Prime Minister, foreign exchange controls "must serve as an aid to reform, not an alternative" and that "the breathing room given by controls should be used to accelerate, not slow, the pace of financial cleanup".
4. Progress report on the fund-raising exercise by the new government financial adviser Salomon Smith Barney for Danamodal Nasional Bhd.
5. The source of funding of the RM1.1 billion government bail-out of Bank Bumiputra via Khazanah Nasional Bhd., why it was RM350 million more than the RM750 million maximum-figure announced six months earlier and what action have been taken against those responsible for such colossal bank losses in Bank Bumiputra third time in 12 years.