(Petaling Jaya, Sunday): Twenty months into the worst economic crisis facing the country, Malaysia is still suffering from a very serious denial syndrome in the way the government and the local mass media slant or event censor reports unfavourable about the government’s economic recovery efforts.
There were no indication in the local mass media that the government’s "exit tax" on the repatriation of portfolio capital and profits following the introduction of capital controls last Sept. 1 announced by the Finance Minister, Tun Daim Zainuddin, on Thursday had met with cautious, reserved and even negative reactions, both local and international. There were only heaps of praises for the "exit tax" by the Barisan Nasional leaders and the mass media, not realising that this tantamount to a back-handed criticism for the introduction of the capital controls in the first place!
The local press continue to slant its economic reporting which ignores bad or adverse news creating a great contrast with the foreign mass media reports.
For instance, the foreign mass media reported that Friday’s 3.2 per cent plunge of the Kuala Lumpur Stock Exchange Composite Index (KLCI) was caused by the continued skepticism of investors over the government's exit tax despite the earlier good news of a hefty trade surplus last year-the first since 1994.
The local mass media however reported differently, with one typical commentary explaining that the benchmark KLCI lost 18.52 points, or 3.21%, to close at 558.80 points because of "a technical correction after a good run-up on Thursday when news of the repatriation level were announced".
In actual fact, there was no such "good run-up" on Thursday when news of the exit tax was announced by Daim, as the KLCI started to fall from its morning high immediately following the announcement of the exit tax.
Another example of the denial syndrome of the local mass media is on the effect of the exit tax on the reinstatement of Malaysian stocks in the Morgan Stanley Capital International (MSCI) indices.
The local mass media gave prominence to the report that certain stock market players welcomed the graduated levy on portfolio investments as many expect Malaysian stocks to be reinstated in the MSCI indices and no one reported what appeared in the Singapore Straits Times yesterday that Malaysia would not be reinstated into the MSCI indices "until there was enough evidence that Kuala Lumpur's relaxation of capital controls made it truly investable".
Assuming the local mass media had been scooped by the Singapore Straits Times on this story, I checked today’s local mass media and found that they have censored this news which, though adverse, should be important enough for Malaysians to learn about the reaction of the Geneva-based Morgan Stanley Capital (MSC), which edits the benchmark indices.
The editor of the MSCI viewed the exit tax announcement by Malaysia as a positive development and "will analyse the impact of the new measures as further details are provided and the implementation framework clarified" and added:
"A potential change in the status of Malaysia in the MSCI Emerging Markets Free Indices will, however, not be reconsidered before there is sufficient evidence that these measures effectively and permanently warrant a truly investable status from the point of view of international investors in emerging markets."
Whether the Malaysian authorities like or dislike, support or denounce, views of the international financial community, the government and local mass media must not deny the right of Malaysians to full freedom of information by exercising arbitrary information slant or censorship which is the best example of a serious disease of denial syndrome.
It is most shocking that the local mass media should be exercising such selective reporting at a time when Malaysia is proclaiming that it wants the country and people to make the quantum leap into the information age.
Malaysia cannot fully recover from the worst economic crisis in the country’s history unless the government and the local mass media fully shake off the serious denial syndrome afflicting them.