Can DPM Lend Credibility to the Economy?

A Kadir Jasin 

بِسْمِ اللهِ الرَّحْمٰنِ الرَّحِيْمِ "In the name of God, the Most Gracious, the Most Merciful".

LATEST, 16 Sept - Body is that of Kevin Morais, confirm police. SUBANG JAYA: The body of deputy public prosecutor Kevin Morais has been found, and seven people have been arrested, including an army medical officer. - The Star Online

SUBANG JAYA: The special CID task force investigating the abduction of DPP Anthony Kevin Morais came upon a major lead early Wednesday.

It is learnt an oil drum filled with cement said to contain a body was found in a swamp area opposite SK Chee Wen in USJ 1 in Subang Jaya. Fire and Rescue Department staff are now trying to cut open the drum.

Sources revealed that the task force has been probing the area since 6am Wednesday. – The Star Online.

ORIGINAL POST

 

Can cheery Abdul Wahid perk up the economy?

I WISH I could have the same measure of enthusiasm, joy and confidence about the economy as is so animatedly shown by economy minister, (Datuk Seri) Abdul Wahid Omar, in the above picture.

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Abdul Wahid who is the chairman of the recently established Special Economic Committee appears to be full of confidence that the economy is better than what we are saying and experiencing.

Abdul Wahid is a good man and was a good business executive before the Prime Minister (Datuk Seri) Mohd Najib Abdul Razak brought him into the cabinet soon after the 2013 general elections.

He could have become a good economic minister had the circumstances been different – like Tun Daim Zainuddin under Tun Dr Mahathir Mohamad and Tunku Razaleigh Hamzah under Tun Hussein Onn.

But he isn’t that lucky. Like other well-meaning people who came forward to serve the present government, Abdul Wahid has been tainted by the 1MDB scandal and the leadership crisis that it spawned.

Today, a lot of people who are involved in the economy or who are informed about it have lost confidence in the way it is being managed or the lack of it. Official assurances have failed to assuage their concern.

As recently as Aug.8, Abdul Wahid was reported as saying that “the weakening of the ringgit does not reflect the country’s current economic fundamentals”, adding that the banking system was sound, economic activities “still” intact and country was on track to achieve a Gross Domestic Product growth of between 4.5% and 5.5%.

He went on to compare the present situation to that of the 1997/98 Asian Financial Crises. Then he said, many factors affected the country’s economic performance including a trade deficit, reserves falling below US$30 billion and a high gearing level among companies, with some exposed to foreign currency borrowings.

He Spoke Too Soon

When Abdul Wahid made that statement, the ringgit was hovering at around RM3.9220 to a dollar. Now it well above the psychological barrier of RM4 and the critical Bank Negara foreign reserves had fallen below US$100 billion – the lowest in five years. The ringgit closed at RM3.290 against the dollar on Friday.

Surely he knows that the famous RM42-billion 1MDB debt could have risen to as much as RM50 billion now due to the depreciation of the ringgit. A larger portion of 1MDB's debt is denominated in US dollar.

It takes more than Abdul Wahid’s animated enthusiasm and the formation of the SEC to fix the economy and bring back confidence.

The 1MDB crisis and Mohd Najib’s multi-billion ringgit private accounts have caused informed people to lose confidence and trust in him.

Consider the following:

1. We are in a dire need of a credible, trustworthy and trusted government. We may have that if Abdul Wahid is the Prime Minister. But sadly he is not.

2. The ringgit is in a state of freefall. It has fallen to as low as RM4.39 to a dollar. Clearly attempts of the past several months to halt its slide via foreign exchange intervention by Bank Negara had not succeeded. The ringgit continues to weaken and Bank Negara’s reserves fell drastically. As a former banker, surely Abdul Wahid knows that the lower the reserves, the weaker the ringgit becomes.

3. Abdul Wahid and his team can burn the midnight candle, but the informed public and the investors are more likely to be looking at lighthouse. Unfortunately the lighthouse is not shinning brightly either and the base is in darkness. In that state, not only our economy is in danger of floundering but also the whole country could sink.

4. I am not being an alarmist and a prophet of doom. I don’t have to. What we fear is already happening. Consumer prices have risen. Consumers confidence is falling. Businesses are cutting costs by closing down branches, letting go of staff and reducing overtime and cutting back on recruitment.

5. The June consumer price index (CPI) rose 2.5% from a year earlier due mainly to costlier food, alcoholic beverages, tobacco and health care. The falling ringgit and the GST were the culprits. On July 2, The Star reported that the Malaysia Retailers Association (MRA) had lowered the projected retail sales growth rate for the current year for the third time from 4.9% to 4.0% as consumers hold back spending due to higher costs of living, a weak ringgit and higher cost of doing business.

What Is Ahmad Zahid’s Role?

This brings me to the question of what really is the role of the newly appointed Deputy Prime Minister, (Datuk Seri) Ahmad Zahid Hamidi.

[I thank him for showing camaraderie during the Sept. 10 Tokoh Wartawan Negara award ceremony in Kuala Lumpur. But he needs more than just goodwill and charm to make his mark as the country’s new Deputy Prime Minister.]

If he was appointed to replace (Tan Sri) Muhyiddin Mohd Yassin in order to strengthen Umno and the government and not merely to prop up Mohd Najib, he must do a couple of things:

1. He must prove that he is capable of bringing back credibility and trustworthiness to the government.

2. He must show that his years as a banker and a successful business executive had earned him the stripes needed to participate in managing the economy.

3. He has to tamper his “political animal” image with a more smoothening temperament of a DPM and national leader.

4. As Home Minister, he must realise that deporting and seeking arrest of foreign journalists who write negative things about the country do not help to convince the world that we are a democratic, civilized and moderate country. It does not help convince visitors and investors that we are a safe place to be.

5. He must admit that whatever political narrative that Mohd Najib uses to justify the 1MDB's existence and his billion ringgit political funds, the company is a good example of bad corporate governance – flouting so many rules, regulations and standards.

6. Investigations by monetary authorities in Singapore, Switzerland and Hong Kong against 1MDB and the freezing of bank accounts associated with the company cast aspersion on our integrity and dependability as an investment destination.

What is Ahmad Zahid Priority?

I would like to assume that Ahmad Zahid acknowledges that saving the economy is as much his priority as showing undivided loyalty to Mohd Najib.

He could very well be holding the key to the survival of not only Umno, but also the entire nation. It may sound like an overstatement, but may not be far from the truth.

Who else after Mohd Najib if not him? Muhyiddin might have blown his chances by being indecisive and Tengku Razaleigh Hamzah might not be going anywhere with the unity government proposal. Mohd Najib might never be toppled in a no-confidence vote in the Dewan Rakyat.

Members of the Umno inner circle, either out of altruism or selfishness, have clearly bought into the story that 1MDB is the party’s goose that lays the golden egg - the new way for Umno to raise funds.

They had been told that their President does not want Umno to depend on Malay, Chinese and Indian tycoons for donations. But it’s still okay to accept RM2.6-billion “sadakah” (donations) from some wealthy Arabs!

But that story does not find credibility with the majority of informed Malaysians and has become a favourite joke around the world.

Thus it hard to sell the story that the economy is being managed well when the principal bearer of the message – the Prime Minister - is suffering from an acute case of trust deficit.

The news has it that he will soon announce a new economic recovery package based on the recommendations of the Abdul Wahid’s committee has largely been discounted. 

FOOTNOTE: Now that Mohd Najib aka the Bugis Warrior is in a war mode, I suggest that he moves from the Bugis pinisi to a Bugis jajab – the Bugis warship.

Walahuaklam.