(Petaling Jaya, Friday): The second quarterly returns of the Malaysian economy showing a -6.8 per cent contraction of the Gross Domestic Product (GDP) is the greatest shocker in the past 14 months of the economic crisis, because of the totally unexpected severity of the economic shrinkage.
When the authorities had announced that the Malaysian GDP contracted by -2.8 per cent, it had come as the latest of a series of economic shocks because Malaysians had not expected it to be so bad, although the people did not believe the governmentís effort to paint a rosy picture of the Malaysian economy.
The announcement of the -6.8 per cent economic contraction for the second quarter is an even greater shock than the results of the first quarter, not only in the severity of the economic contraction, but stems from a widespread disappointment that the government had learnt nothing in the past 14 months in not preparing Malaysians for the -6.8 per cent economic contraction.
Although the Special Functions Minister and Executive Director of the National Economic Action Council (NEAC), Tun Daim Zainuddin forecast a 1% positive economic growth for next year, it is a meaningless statement to Malaysians - as the government had failed miserably in the past 14 months to gain public credibility of its statements and forecasts on the Malaysian economy, which is the fundamental reason for the failure to date to restore confidence without which there could be no economic recovery.
Daim said he expects the third quarter to be better than the second quarter but it is significant that he did not venture to say that it would be better than the first quarter.
How far better would the economy in the third quarter as compared to the -6.8 per cent contraction in the second quarter? If we assume that the third quarter would be better than the second quarter but not better than the first quarter, and that the fourth quarter would be comparable to the first quarter economic performance, than we are looking at a GDP contraction of -4 per cent to -5 per cent for 1998, which is the forecast of economists and analysts who have been condemned by the government as biased and having an ulterior agenda to undermine confidence in the Malaysian economy.
With the shocking results of the Malaysian economy for the third quarter, the government should release its latest - the fifth - forecast on the GDP growth for 1998. The government have made four forecasts of the 1998 GDP growth so far, from the original government forecast of 5% to 7% GDP growth for this year, to 4%-5% growth, then 2%-3% growth and lastly to a contraction of -1% to -2% for 1998.
With the -6.8 per cent GDP contraction for the second quarter, the governmentís fourth forecast of -1 per cent to -2 per cent negative growth has become untenable.
The tragedy is I do not know who to direct my call for the release of the governemntís latest forecast of the GDP contraction for this year - whether I should be urging the Finance Minister Datuk Seri Anwar Ibrahim or the Special Functions Minister, Tun Daim Zainuddin. It is such confusing, conflicting and contradictory signals and messages coming from the top economic and financial policy makers which make it difficult and even impossible for confidence to return to the country.
The National Economic Recovery Plan (NERP) had called on the government to release timely economic statistics, data and forecasts to take the people into its confidence in order to successfuly overcome the worst economic crisis in the nationís history, and if this is so, then the government should immediately make public its latest forecast of the GDP contraction for this year, taking into account the shocking second quarterly returns that have just been released.
The DAP calls for the convening of a special meeting of Parliament on the worsening economic crisis, especially at the failure of the government to forcefully and effectively regain confidence, whether of the people, the market or the international community, 14 months after the start of the worst economic crisis in the nationís history.