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Come clean on economic prospects, veteran newsman tells Putrajaya

Zahid using cheap politics to defend 1MDB, says veteran newsman

Putrajaya must come clean on the fact that the country’s economy is on a downtrend instead of creating the false impression that everything is well, said Datuk A. Kadir Jasin.

The former group editor-in-chief of the New Straits Times Press (NSTP) said the government should rationally and openly share economic data with the public instead of being evasive.

“Don’t wait till the people are angry. Be forthright with them. Don’t for a minute think that they are ignorant, stupid or unaware,” wrote Kadir in a posting on his blog The Scribe A Kadir Jasin today.

He said the public was now aware of how the economy worked after feeling the effects of inflation due to fuel subsidy cuts and shrinking incomes after a drop in oil palm and rubber prices.

They are also expecting prices to go up when the Goods and Services Tax (GST) comes into force next year, Kadir said.

He said the public was also aware that the ringgit’s shrinking value would adversely affect the economy.

“Is it not better to admit to the present realities and be honest with them now?

“It is better to make them less happy now by telling them the truth instead of making them angry when economic hardship hits them,” Kadir said.

Kadir said many market forecasts have indicated that the country will probably go through challenging times next year as economies in Europe and Australia are set to contract and China’s growth is expected to dampen.

On December 1, the ringgit’s value charted the largest drop in a single day to RM3.342 to US$1. This was the steepest fall since the 1997-87 Asian Financial Crisis.

According to a December 3 report in The Star, only two of the five primary sectors of the economy grew in the third financial quarter (July-September) of this year: the automotive (18.2%) and banking (1.6%) sectors.

However, the services, commodities and oil and gas sectors charted a 58.5%, 37.7% and 29.3% drop respectively.

The services sector contributes 50% to the country’s Gross Domestic Product.

Yesterday, The Star also ran an analysis on the ringgit’s value, stating that its value had dropped compared to many of the currencies of Malaysia’s trading partners.

The ringgit fell 5.61% compared to the US dollar, 5.58% to the Hong Kong dollar, 3.93% to the Thai Baht, 2.93% to the Indian rupee, 2.44% to the Taiwanese dollar and 0.95% to the Singaporean dollar.

The ringgit, however, went up 9.4% compared to the Japanese yen, 5.91% to the euro, 4.32% to the Australian dollar, 2.31% to the British pound and 0.73% to the Indonesia rupiah.

The Star also wrote that sluggish exports would cause Malaysia to experience twin deficits in its current and trading accounts. This was said by AllianceDBS chief economist Manokaran Mottain.

“Whether or not we will experience an economic crisis next year is one thing. This is something that is being forecasted by the federal opposition,” Kadir wrote.

He also cast doubt on recent statements by government ministers, finance chiefs and economists who appeared unworried about Malaysia’s economic prospects.

Kadir said it was confusing when Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz said that it was good if the ringgit’s value was high and also good if it dropped.

He also quoted Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah who was confident that the government would be able to meet the 2014 Budget deficit target of 3.5% of GDP, even if the price of oil continued to fall.

The same sentiment was shared by CIMB chief executive officer Tengku Zafrul Aziz who said Malaysia’s economic fundamentals were strong, while Malaysian Institute of Economic Research head Dr Zakariah Abdul Rashid gave a “mixed forecast” for the economy.

“The question is can we believe that our economic fundamentals are strong when the prices for our primary commodities and the value of our ringgit fall?

“Shares prices and trading volume on the Malaysian Bourse are also going down. There are more public listed companies that are in the red compared to those who are positive.

“The majority can be said to be seeing reduced profits,” Kadir wrote. – December 5, 2014.