Thursday, 04 December 2008 19:31

A few days ago, our Prime Minister commented that the growth rates achieved by our economy are indicative of clear skies ahead.

 The credibility of a political leader and that of a government is so critical a factor in creating confidence and stability that careful and sound analysis must be provided on any major issues affecting the wellbeing of the country.

 It does not bode well for the ruling government if the Prime Minister says one thing, one day and gives a different perspective another day on the same issue and or his pronouncements are contradicted by his cabinet colleagues and other members of his regime.

 You be the judge.

 Can there be clear skies when the STAR newspaper’s headlines, December 4, 2008 blares out:

 “EPF Income Down. World financial crisis hits investment earnings. The Employment Provident Fund reported an unaudited investment income of RM2.06 bil during the third quarter of this year. It was a 60.4% decline compared with the previous quarter.”

 Can there be clear skies when NST reported on December 4, 2008:

 “PM warns of threat to energy supply.”

 Can there be clear skies when the same NST reported:

 “If projections are accurate, Malaysia could in fact expect a total negative growth of 25 per cent for the next three years…”

 The Deputy Prime Minister was reported to have said that:

 “… declining figures were inevitable as the tourism industry could not be insulated from the impact of the global adversities, including the current economic crisis.”

 Can there be clear skies when the same NST reported:

 “Petroliam Nasional Bhd (Petronas) has cut production at its petrochemical plant at Kertih, Terengganu, indefinitely due to lack of demand as economic slowdown starts to bite.”

 President and CEO, Tan Sri Hassan Merican was quoted as saying:

 “A lot of petrochemical facilities worldwide are being shut down because of lack of demand. Kertih is no different from other facilities in Singapore and worldwide. The first to get hit is always the polymers and resins because these are very much consumer goods-driven.”

 But in recent months, the Governor of Bank Negara and the Ministry of Finance (then under the stalwart-ship of the Prime Minister) arrogantly declared that our economy has de-coupled from the negative effects of the global crisis. Our fundamentals are so strong and resilient that it would be able to weather the storm.

 Najib even made reference to the 1997 crisis and how it affected the tourism industry which in that period recorded growth of 25%.

 If these leaders were not in a state of denial in 2006 / 2007 and took pre-emptive measures, we could have easily addressed these issues.  But we are now resolving issues and problems as and when they crop up.

 I am glad to read in the NST that the Executive Director of the Malaysian Institute of Economic Research has finally agreed that:

 "We are about to experience the worst economic disaster the world has witnessed since the end of World War 2. All indications suggest that a perfect storm is in the making with all its manifestations, including painful credit crunch, huge job losses, plummeting prices and currency turmoil.

 “The United States, European Union, Japan, Taiwan, Singapore and New Zealand are in recession, and many more economies are on the verge of recession.

 “Attempts by some to downplay it as an ‘international’ rather than ‘global’ recession, on the premise that not all countries will succumb to it, are naïve.”

 Unfortunately, such a realisation is too late to do any much good for Malaysia. The signs and symptoms were all there in 2006 / 2007, specifically the 3rd quarter of 2007, but like the Badawi regime, MIER was out of sync with reality until now.

 Notwithstanding MIER’s conclusions, I would not be surprised when political leaders from both sides of the divide continue to mouth such rubbish as “clear skies”, “we will not have a recession in Malaysia”, etc.

 I am prepared for the crunch time. Are you?

 Listen more to fairy tales and be wiped out for good!