Did Najib and Anwar Miss the Opportunity?

A kadir Jasin

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THE GOVERNMENT’S RM7-billion economic stimulus package presented to the Parliament on Nov. 4 could work. To put it more bluntly, it has to work for the sake of all of us.

The “could work” rating came from a former Finance Minister and the rest came from me. At last the government came to its senses and acknowledged that its earlier bravado, claiming the economy was strong, amounted to falsehood when the entire world economy is, literally, hanging in the balance.

In spite of the additional RM7-billion “expenditure”, Mohd Najib had to pare the economic growth down to a mere 3.5 per cent next year against the current year’s projection of five per cent and the inflation rate of 4-5 per cent. The latter can only be a crude measure as the real inflation is reckoned to be very much higher. But there’s a good chance that inflation will moderate when demands fall.

Mohd Najib has to be congratulated for his maiden effort although he clearly overlooked a few fundamental points that require further explanations before he could hope to fully convince those who hold the key to the commerce and investment that he is on the ball.

The objection of the opposition MPs, which led to their temporary boycott of the session, was not baseless. It would appear that Finance Minister had presented a “budget-within-the budget” instead of merely rounding-up and winding-up the original budget proposals presented by Abdullah Ahmad Badawi in August.

He could have been wrongly advised or was running for time. The reasonable thing to do, according to some independent sources, was to allow for Abdullah’s original budget to be debated and voted upon. Only then Mohd Najib should come in to present a supplementary budget that specifically addressed the global economic and financial crises.

Maybe Mohd Najib had deliberately not wanted to present a separate supplementary budget for fear that it would offend Abdullah. But by not doing so, he could have “breached” the rules and rendered the 2009 Budget “questionable” from the procedural point of view.

But more importantly, he could have missed the opportunity to put his seal on the stimulus package. Maybe he’s not in a hurry to do that or he’s still afraid that Abdullah and his boys could still pull the rug from under his feet despite having won the Umno President post uncontested.

But Mohd Najib was not alone in not seizing the moment. The Opposition Leader, Anwar Ibrahim, too appeared to have allowed a golden opportunity to slip by.

Instead of staging a walkout, he could have used the debate to force a no-confidence motion against the government and settle once and for all his claim that he has enough support to topple the government.

Since the government does not seem to be in the mood to listen to his advice, he should just push ahead with his takeover plan. After all there is a motion to that effect in the House.

Mohd Najib and his advisers should bear in mind that what really matters is not the ringgit and sen but the confidence of the producers and consumers. Putting back the money in the consumers’ hand by way of lower EPF contributions will only help to generate demand if they have the confidence to spend and if the higher purchasing power is not eaten away by inflation.

The workers are given the option to reduce their monthly contributions by three per cent for two years beginning next January. If every single EPF contributor takes advantage of the reduction, there will be extra an extra RM4.8-billion purchasing power for the economy.

The move will also ease the burden of the EPF. The national pension fund has been plagued with overflowing coffers but insufficient investment opportunities. Given the gravity of the matter, another more suitable occasion should be set aside to discuss the EPF investments. With lower growth forecast, the problem of excess funds and lower return will continue bother the EPF.

I urge Mohd Najib to be mindful when dealing with the property market. Our property market has become too speculative that it forces the genuine house buyers and traders out.

It’s good to promote the construction and ownership of low- and medium-cost housing units because of the positive spillover effects. The problem in the last few years was speculation that forced prices of these units beyond the financial capability of many genuine buyers and, therefore, many were left unsold.

The government should consider some tough fiscal measures to curb speculation, bring down prices and make it easier for genuine buyers to borrow. More capital, labour and materials should be allocated to public works and amenities as were the case during the 1997/98 crises.

Mohd Najib and his team will have to watch closely the effects of China’s stimulus package introduced last month and the US President-Elect Barack Obama’s package after his Jan. 20 inauguration.

The Chinese government had rolled out a string of policy stimulus last month after the latest data shows a continued slowdown of economic growth which included a sweeping export tax rebate hike and a new state infrastructure plan that were designed to prop up export and investment growth.

During the election campaign, Obama had called for about $175 billion in new stimulus spending, including money for roads, bridges and aid to hard-pressed states. He wants a rebate of $500 for individuals, $1,000 for families and a new $3,000 tax credit for businesses for each new job created.

But Mohd Najib must acknowledge that money and programmes alone will not guarantee success of this crisis management. The failure of so many public policies and projects in recent decades is due to poor supervision and monitoring. The ICU-type supervision and monitoring should not only be brought back but strengthened.

By this I mean Mohd Najib himself has to monitor the implementation of the package if he wants it to succeed. Unless he is absolutely on the ball, time and bureaucratic impediments will work against him.

Last but not least, Mohd Najib must start to identify his economic management team and gives up the finance portfolio at the earliest possible date once he assumes the post of Prime Minister, God-willing, in Mac. I had said this with Abdullah and I am saving it again with Mohd Najib. The PM should not hold the finance post.

Eurocopter: How Not To Handle Controversy

1. Hanky panky was suspected (alleged) in the award of contract for the purchase of 12 Cougar EC725 helicopters for RM2.3 billion from Eurocopter for the Air Force;

2. Doubt was cast on the tender process of the Defence Ministry. Mohd Najib was one of the targets;

3. Abdullah became the Defence Minister and postponed the purchase on the pretext of economic downturn;

4. The multi-party Public Account Committee of the Parliament found no wrongdoings in the award of the contract;

5. Why is it so difficult for the Government to reveal the identity of the agents involved in the procurement?;

6. Is it Kamaluddin Abdullah and/or Scomi, Khairy Jamaluddin or a member of the Perlis royal household as was widely rumored? If they are not involved, clear their names;

7. Do we wait for an Altantuya-type trial before the identity of a commission agent is made public?;

8. If the identities of the recipients of privatised projects during the so-called “closed” Mahathir era were revealed and published by the government on the Internet, why should the identities of the beneficiaries of the Eurocopter deal be kept a secret?;

9. Is the privacy of commission agents more important than the credibility and integrity of the government?;

10. Is the privacy of the commission agents more important than the lives and limbs of the RMAF personnel?; and

11. I think Mohd Najib and his handlers should start managing information more professionally – minus the spins that spun the otherwise simple Abdullah into an unrecognisable entity. Stop being defensive and apologetic.