(Petaling Jaya, Tuesday): The Prime Minister, Datuk Seri Dr. Mahathir Mohamad said that he would now concentrate more on UMNO’s affairs than the Government as part of the transition process of the national leadership. Therefore he might not take part in some government functions and would leave the tasks to his deputy, Datuk Seri Abdullah Ahmad Badawi.
It would appear that Mahathir would now be more engrossed in politicking than in statesmanship, spearheading the UMNO campaign of hate and vendetta against the Opposition and dissent, as illustrated by his outrageous 43rd Merdeka Day message and the highly-politicised decision on the part of the Federal Government to unilaterally abrogate the Petronas agreement with Terengganu and hijack the 5 per cent oil royalty from the state government.
May be the better option is for Mahathir to emulate the example of Malaysia’s first premier, Tunku Abdul Rahman and take leave as Prime Minister for a year to give full-time attention to his duties as UMNO President - as in this manner, national interests would not be be held to ransom by UMNO party interests.
However, the question is whether Abdullah can step into the vacuum created by Mahathir’s greater focus on politicking by acting in a more statesmanlike manner to be the leader of all Malaysians, and not just Malays who support UMNO, and guide the government towards more rational and productive nation-building polcies, whether in political, economic, educational, social or cultural spheres.
For a start, the Cabinet meeting tomorrow should withdraw whatever directive the government had issued that had led to the six-day blackout by the mainstream mass media, both printed and electronic, of the World Economic Forum (WEF) 2000 global competitiveness ranking which showed Malaysia’s disastrous fall from the world’s top ten in 1997 to a lowly 25th position.
Malaysia’s 2000 global competitiveness ranking fell by nine places as compared to last year and 16 places as compared to 1997 when Malaysia was ranked No. 9 in international competitiveness in the world.
Malaysia's competitiveness ranking slid from 16th to 25th this year among the 59 economies under the survey largely because of its capital controls imposed in September 1998. Its entry into the banking industry is ranked in last place of 59th, compared with 57th place for its interest-rate controls, 57th for competition in domestic banking and 55th for access to external finance.
The Cabinet should issue a post-Cabinet statement on the WEF 2000 global competitiveness ranking and welcome a nation-wide public debate as to how Malaysia could improve on her competitiveness.
The Cabinet should face up to the danger of the marginalisation of the Malaysian economy as a result of the lack of investor confidence and draught of foreign investments, which could derail not only Malaysia’s economic recovery but leave the country behind as its nearest competitors move ahead to reinforce their positions in the New Economy.
Since Mahathir’s outrageous 43rd Merdeka Day message, for instance, the Malaysian stock market had been the worst performer in the region, suffering the most precipitous fall of 8.63% from August 30 to Sept. 11 when compared to Singapore’s fall of 2.11 per cent or Indonesia’s 1.39 per cent fall.
The following indices on the performance of the stock markets of Kuala Lumpur, Singapore, Bangkok, Manila and Indonesia are self-explanatory:
August 30 Sept. 11 difference percent
KLCI (KL) 795.84 727.15 68.69 -8.63
SES (Singapore) 2165.34 2119.61 45.73 -2.11
SET (Bangkok) 309.67 290.34 19.33 -6.24
PSE (Manila) 1525.19 1501.48 23.71 -1.55
Jakarta 469.061 462.538 6.523 -1.39
Even former Bank Negara deputy governor, Tan Sri Lin See-Yan, is now calling for review of capital control measures.
In a recent speech at the Asian Institute of Management (AIM) in Manila, Lin admitted that it is the economy’s "negatives" which are increasingly being highlighted, "including the softening of actual FDI inflows, recent outflows of foreign portfolio capital, the lackadaisical KLSE, softening retail sales, rising oil prices and the overhang of unsold houses and buildings".
Lin said that it is "now timely" to review existing capital control measures with a view to (a) liberalising them to be consistent with policy objectives; and (b) in cases where they are no longer needed, removed if necessary in stages, and that these measures "will go a long way to improve market sentiment".
The Cabinet cannot tarry any further to grapple with the problem of restoring both investor confidence and foreign direct investment, especially after the release of WEF’s 2000 global competiveness ranking placing the Malaysian economy in the lowly 25th position as compared to the ninth ranking in 1997.
I urge the Cabinet tomorrow to immediately boost investor confidence by sending out a clear signal that the government will liberalise and even remove capital control measures latest by next year’s budget presentation on Oct. 27.