14Ogos2020

Agenda Daily

ONLY THE BEST WILL DO

After a rather lengthy pause, the chairman of the National Economic Advisory Council has been named. The choice of candidate — a former minister — has drawn criticism, giving the impression that the government is slow in tackling the complex issue of reviving the economy. Why are we stuck in a rut when it comes to appointing sound choices for critical posts?

 

DESPITE THE BEST OF EFFORTS BY THE government — if such a description is appropriate - the economy continues to shrink at a rate higher than expected.

The Star newspaper on May 28 reported that the economy contracted by 6.2% during the first three months of the year compared to the same period last year.

Economists had expected the contraction to be only 3.5%. For the year, the International Monetary Fund (IMF) expects our economy to shrink by 3.5% while the consensus is minus 2.2%.

Bank Negara Malaysia (BNM) Governor Tan Sri Dr Zeti Akhtar Aziz told a Press conference in Kuala Lumpur that the financial crisis, which peaked last September and led to a general slowdown in economic activity, had taken longer than expected to be resolved.

She said the deterioration was greater than expected and that the export outlook remained weak, adding that the outlook for April to June would depend largely on external factors.

This is understandable. The Malaysian economy is export-dependent. Exports account for 89.6% of our Gross Domestic Product (GDP).

In what appears to be an attempt to build confidence, Zeti said she expected the second half of the year to see improved economic performance.

BNM statistics show large inventory drawdowns, particularly in the manufacturing and commodity sectors, which contributed to the growth contraction.

All sectors, except construction, recordedcontractions year-on-year. The manufacturing sector declined significantly by 17.6%, led by a 23.1% contraction in export-oriented industries.

The electrical and electronics sub-sector declined by a whopping 41.4%. With lower local demand, the domestic-oriented industries declined 15.9%.

The bright spark is the fact that trade surplus remained large at RM32.7 billion, as the contraction in imports was larger than in exports due to the lower import of intermediate and capital goods.

While we cannot blame Zeti for trying to project a positive outlook, the fact remains that our economy is likely to continue to be weak until demand from the major export markets pick up.

Former Singapore Prime Minister Lee Kuan Yew, writing in the June 8 issue of the Asian edition of Forbes magazine, noted that the impact of President Obama's economic policies on the US economy would only be felt between the end of this year and 2010.

Lee's sense of pessimism is understandable. The island republic that prides itself on clockwork economic management is heading towards a severe recession.

The IMF has forecast a negative io% growth for the current year against China's positive 6.5% growth, India's 4.5% and Indonesia's 3%-4%.

Enter the NEC

INCIDENTALLY, the release of the BNM figures coincided with the announcement of the appointment of ex-minister Tan Sri Amirsham Abdul Aziz as chairman of the National Economic Advisory Council (NEC).

Prime Minister Datuk Seri Mohd Najib Abdul Razak, in making the announcement, said the appointment of between eight and 12 council members, comprising mainly economists and one or two sociologists, would follow.

`It is not quantity but quality we are looking for. The council members will be those who have high ability and experience in this field,' the Prime Minister said.

Mohd Najib had on April 9 announced the setting up of the council to be headed by a chairman with ministerial status. The NEC members would comprise local and foreign economic experts.

The principal task of the NEC would be to advise the government on a new national economic model aimed at boosting the nation's income from a middle to high-income level and towards achieving the status of developed nation by 2020.

The appointment has, however, received mixed response. As I have stated in my blog posting dated

June 2, the people had waited anxiously and expected an exceptional and very special person to occupy the post.

After all, the economy is facing a very serious crisis globally, although initially the Ministry of Finance predicted that we were immune and there would be growth.

Given the negative performance of the economy and its less-than-rosy outlook, the people had every right to expect the NEC to be formed immediately and to come out with suggestions and proposals to overcome the problems.

Unfortunately, for some reason only known to the Prime Minister, it has taken him something like a month-and-a-half just to name the council's chairman.

At the point of writing, the rest of the team had yet to be named. And why choose a minister that he himself had dropped from the Cabinet to head the council?

Lapse in judgement?

NO malice intended but if Amirsham was deemed unsuitable to continue heading the Economic Planning Unit (EPU) and was thus dropped from the Cabinet, how is he now qualified to head the NEC?

Amirsham is a nice person and a friend. But as a public figure and one who is entrusted with chartingthe future course of our economy, he cannot escape scrutiny.

Politically, he came out of nowhere when former Prime Minister Tun Abdullah Ahmad Badawi brought him out of retirement and made him a minister.

When he was the Chief Executive Officer of Maybank Bhd, he did a good job as a diligent conservative banker until just before his retirement when the bank belatedly ventured into Pakistan, Vietnam and Indonesia.

It is public knowledge that all these purchases were overpriced and now Maybank is beginning to suffer huge losses due to the non-performing loans of these overseas subsidiaries.

Sadly, while the bank's officers may claim that all these deals were done transparently and above board, the ultimate losers are the unit holders of Permodalan Nasional Bhd (PNB).

PNB is the controlling shareholder of Maybank. And now PNB and its unit trust investors have to live with these bad overseas investments.

Again, we have to ask the question: How did the government and its regulatory agencies like the Finance Ministry, BNM and the S e cur it i e s Commission approve these purchases?

The question on people's minds is: Why choose someone with this kind of track record, and why is the government taking unnecessary risks by making such a decision?

Is there such a dearth of talent in the country that the government has to keep recycling Cabinet and civil service members?

Is there nobody better out there who can be chosen for this very critical job? Don't we have outstanding economists or scholars to choose from?

Let's call a spade a spade. Had Amirsham left Maybank with flying colours, we would have no problems placing our faith in him and the council.

Then, there might also be unhealthy rivalry among the economic and financial agencies that are supposed to assist and collaborate with the NEC. For instance, what role will the EPU now play?

Let's look back at the 1997/98 financial crisis for some pointers. The-then Prime Minister, Tun Dr Mahathir Mohamad, picked Tun Daim Zainuddin to head the National Economic Action Council (NEAC).

Daim brought in top economists, civil servants, businessmen and journalists to help him. Planning, implementation and information dissemination went hand in hand.

As its name itself suggests, the NEAC was an action council. It had to take action because there was a crisis. Dr Mahathir put Daim at the EPU and made the EPU the secretariat of the NEAC so that the two could work in tandem.

There was coordination. Once the NEAC published its action plan, Daim was asked to join the Cabinet to act and deliver on the action plan.

Now we have the EPU on the one hand and the NEC on another. Granted that the NEC is to chart the future course of the economy, the present crisis needs far greater attention.

I sincerely hope I am wrong, terribly wrong. I hope the government has made the right choice. People are asking questions. They are not to be blamed. The impression out there is that the government seems not in a hurry to solve the crisis.

The people are suffering and there is no sign that ministers and top civil servants are worried. There is no gesture on the part of the Cabinet members and top civil servants to reduce their salaries and allowances to show sympathy for the people.

When the rakyat are suffering, it would be nice if ministers, Menteris Besar, Chief Ministers and deputy ministers made some sacrifices.

THE MAS SELAMAT POSER

THE DETENTION of Jemaah Islamiah (JI) suspected militant, Mas Selamat Kastari, under the Internal Security Act (ISA) is worth noting.

The Malaysian Government committed him to ISA detention because he was considered a threat to the national security of Malaysia and Singapore.

Why was he not returned to Singapore? After all, he escaped from `Fortress Singapore' and was accused of plotting terror against Singapore.

Even if we have something to learn from him, could our Special Branch not have extracted the necessary information when he was in their lengthy custody?

I am not saying that we should not be buddy-buddy with Singapore, but keeping Mas Selamat on our soil could pose an additional security threat to us.

A brief lesson in regional geopolitics may be useful in understanding why Singapore is vulnerable to international terrorism.

Post-World War 11, Singapore was a hotbed of radical ideologies, including communism. Now, Singapore is attracting terrorism.

In the days of communism and socialism, Singapore was a place of choice because of its strategic location,intellectual freedom and the diversity of its residents.

Today, Singapore remains a vibrant place although it's no longer as diversified and certainly less tolerant of intellectual freedom. Singapore has degenerated into a democracy that has no viable opposition.

This new political environment and Singapore's position as the Eastern listening post of Israel, have turned the republic into a magnet for regional extremist groups.

The democratisation of Indonesia in the postSuharto era and the collapse of its economy in the aftermath of the 1997/98 regional financial crisis have spawned religious and ethnic radicalism and extremism.

Understandably, the Singapore Government jumps at the opportunity to use the spectre of terrorism to clamp down on civil liberty as a means of keeping Singaporeans glued to the ruling People's Action Party (PAP).

From the geopolitical point of view, we cannot blame Singapore for wanting to keep its population in check. The whole region, minus Burma and Brunei, is enjoying new and wider democratic freedom.

The Singapore rulers are not unaware that unless they keep the lid on their wealthy-but-democratically sterile republic, the island too will be engulfed by this wave of democratisation.

Along came the likes of Mas Selamat and his JI lackeys to give them the justification to continue to clamp down on democratic freedom.

But are we not getting entangled in Singapore's domestic politics by keeping Mas Selamat on our soil?

Would it not be wiser to hand him over to Singapore from where he made his daring escape?

Mas Selamat became our problem only when he escaped from Fortress Singapore where he was the guest' of the Internal Security Department (ISD).

After releasing a handful of local and foreign ISA detainees just weeks ago, why do we have to smear our name by using the law to solve what is essentially a Singaporean problem?

Or, are we embarrassed by the fact that Mas Selamat had not only slipped into our country, but had also merrily lived in our midst for months on end without being detected?

Just a thought, do we get to claim the S$i million (RM2.4 million) bounty on Mas Selamat's head?

Well, RM2.4 million is a handy sum. It can partly be used for Mas Selamat's upkeep while he's in our custody.

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