DAP calls for a second RM3 billion economic stimulus package with a K-economy focus by opening wide the doors of university admission to the best and brightest of each generation

- Bukit Mertajam DAP Anniversary dinner
Lim Kit Siang

(Bukit Mertajam, Saturday): There is great nervousness that next week may see the Kuala Lumpur stock market plunge to its lowest level in more than 25 months,  testimony of the deteriorating economic situation in the country.

The Kuala Lumpur Stock Exchange Composite Index (KLCI) fell 13.36 points, or 2.3 percent, this  week to close yesterday  at 557.66 points, which is only 4.32 points higher than the lowest index of KLCI in more than 25 months of 553.34 points registered on 9th April 2001.

Two events next week which will decide whether the KLCI plunge to its lowest point in more than 25 months are:

Malaysia’s stock market should be in a better position than all the other regional markets as the Malaysian economy had been given three “Viagra-type” injections in the past two months, namely the RM3 billion economic stimulus package to counter the US economic recession announced by the Prime Minister on March 27, the Third Outline Perspective Plan 2001-2010 and the Eighth Malaysia Plan 2001-2005.

But in actual facgt, the Malaysian economy and the stock market have fared worse than their regional counterparts which do not benefit from three “Viagra-type” boosts  for their economy, which is evident from a comparison of the performance of the  KL stock market with  other  regional markets, whether Singapore, Bangkok, Seoul, Hong Kong or Tokyo.

The Kuala Lumpur stock exchange has been the worst performer in the Asian league of leading stock markets despite three economic "Viagra" jabs since the announcement of the RM3 billion economic stimulus package,  as shown by the following indices on March 23 (the previous trading day before the announcement of the RM3 billion economic stimulus package) and the close of trading yesterday (18th May 2001):

                 Tokyo       Seoul     HK         Bangkok  Singapore     KL

23.3.01     13214.54    537.97    12583.36   290.25   1715.31       669.27
18.5.01     13877.77    600.54    13459.18   300.64   1662.64       557.66
Change      +663.23     +62.57    +875.82    +10.39   -52.67        -111.61
%change     +5.02%      +11.63%   +6.96%     +3.58    -0.06%        -16.67%

Can the Prime Minister, Datuk Seri Dr. Mahathir Mohamad or the “on-leave” Finance Minister, Tun Daim Zainuddin, explain why despite having three “Viagra-type” injections, the haemorrhage of investor confidence especially foreign investors have reached a new crisis stage as reflected by the 16.67 per cent plunge in the KLCI since March 23, when the stock markets of other economies without the three Viagra-type injections have registered robust growth, with South Korean stock market  registering a 11.63 per cent rise for the same period?

There were in fact two supplementary Viagra-type boosts, the government’s abolishment of the 10% exit levy on profits repatriated within one year and the relaxation of the Foreign Investment Committee (FIC) rule to allow foreign citizens to buy all types of local property costing above RM250,000 without having to form a company with Malaysian equity participation - but both of them were unable produce any positive effect to the listless economy.

Daim is making his second public appearance in Malaysia on Tuesday after going on his bizarre “leave”, as he is scheduled to open the 4th annual meeting of the Asia-Pacific Group on Money Laundering (APG) in Kuala Lumpur and I would suggest that he should give an answer to this conundrum in his opening speech - why the Malaysian economy has become so impotent that there is not only no positive effect but a disastrous slide  to the Kuala Lumpur stock exchange after three Viagra-type injections for the Malaysian economy.

Malaysia is faced with a full-blown confidence crisis and no foreign investor is going to put any money in the country when this confidence criss is not being addressed, but worse, being aggravated as by the following events:

These are among the fundamental reasons why  Malaysia has been losing its competitive edge, as reflected by  the  latest World Competitiveness Yearbook (WCY) 2001 where Malaysia’s global competitiveness  has fallen by four places, slipping to 29th position as compared to the 25th spot last year.

This “bad news” has been  blacked-out by the mainstream media  in the past month and Malaysians cannot read about in the newspapers or learn about it on radio and television - a most ridiculous way for the government to show its commitment to an information society and the IT revolution!

Why have the three Viagra-type injections to the Malaysian economy failed? The reason is very simple. The very deep-rooted problem of confidence which Malaysia suffers from are in the final analysis  not so much economic or financial but political  - and unless the government has the political will to bring about far-reaching political, economic and nation-building reforms, Malaysia is unlikely to resolve the confidence problem  and  the Malaysian economy cannot be restored to its optimum level.

The failure of the Cabinet on Wednesday to open wide the doors of universities to the SPM and STPM top scorers is the latest example why there is no local or international confidence in the Barisan Nasional government.

Despite the promise by the  MCA President and Transport Minister, Datuk Seri Dr. Ling Liong Sik the previous week that the Cabinet was “very, very sympathetic” to high achievers who failed to gain admission to public universities and had directed the Education Ministry to submit a report on how to “accommodate” these students and that “the government  would do everything possible to look into the plight of these students, including increasing intake or opening new universities”, there  was not a single additional university place offered  by the Cabinet to the top achievers.

The Cabinet is now the biggest stumbling block  to Malaysia’s success to become a knowledge-based economy, as Cabinet Ministers do not understand that in all the advanced nations, knowledge is supplanting physical capital as the source of wealth and a nation’s prosperity in the new era will depend on the quality of its higher education.

Human capital in the United States is now estimated to be at least three times more important than physical capital but our Cabinet Ministers still belabour under the old mindset that physical capital is more important than knowledge, skills and resourcefulness of people.

Malaysia needs a second RM3 billion economic stimulus package, which should have a K-economy focus, especially to incorporate a four-point universities admission policy for  this year, not just for the sake of the students but for the future prosperity of the nation, viz:

  1. University admission for all  SPM  and STPM top scorers;
  2. Automatic university admission for SPM students with 6As and above;
  3. First choice of course for SPM students with 10As and above;
  4. Release all science places  from the  7,168 university places not filled by bumiputra science students to eligible Malay, Chinese and Indian science students

*Lim Kit Siang - DAP National Chairman