PRIME Minister Najib Razak has blamed Dr Mahathir Mohamad’s controversial ringgit peg in 1998 as the cause of investors’ loss of confidence in the Malaysian economy.
The finance minister said it took a long time for the country to restore confidence and persuade the investors to return.
He said investors were reluctant to do business with Malaysia due to the “artificial” value of the ringgit.
“At the time, there were no stories that Malaysia was going bankrupt.
At the time, the ringgit was 4.80 against the US$1 and the country’s reserve was only US$20 billion.
“While the ringgit was pegged at RM3.80 per dollar for years, investors were losing confidence in Malaysia,” he said during a visit to Sabah.
Dr Mahathir imposed the ringgit peg on September 1, 1998 and a day later, sacked then deputy prime minister and finance minister Anwar Ibrahim on allegations of sodomy.
But in 2003, when Dr Mahathir stepped down as prime minister, the International Monetary Fund (IMF) said Malaysia was right to peg the ringgit to deal with the Asian financial crisis.
“With hindsight, we have to recognise the good performance of the economy. Mahathir was right,” said the fund’s managing director Horst Kohler, referring to Dr Mahathir’s decision in the aftermath of the currency crash.
Najib was the education minister during the financial crisis.
He said the Malaysian economy was recovering and had recently received an A3 and stable outlook rating from Moody’s Investors Services.
“Unlike Italy, Greece and Russia in the B group category in ratings, we’re in the A group. Logically, the B group will go bankrupt before Malaysia does,” said Najib, rubbishing talk that Malaysia was headed for an economic meltdown.
He said the ringgit had also performed very well in the past two months.
Najib said it was unfair of the opposition to blame him for all what went wrong in the country, including potholes or clogged drains, and to ignore the positive developments.
“You must be fair to me, there’s no need to credit the prime minister if you don’t want to, but please credit the government if the country is doing well.
“I don’t want to take the credit myself as we work as a team with the civil servant.
Najib said the Malaysian economy had grown by 5.9% in the previous years and monthly exports were continuing to grow, hitting a record RM83.5 billion in November last year.
“These days many international companies choosing Malaysia as their (centre), with companies like Korean SK Group, with a reported annual revenue US$123 billion a year – larger than the national budget – (choosing Malaysia) as their regional centre for the Middle East, Asia and India.”
“Malaysians will benefit from all of this investments and all the revenue will translate into cash aid and others to help the poor in the country,” said Najib, adding this was why Malaysia sought to be on friendly terms with other countries. – March 2, 2018.
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Comments
Posted 6 years ago by Mohanarajan murugeson · Reply
Anwar objected to ringgit peg initially because he'd rather IMF come in. If that happened, we could have cleaned up the house and be like South Korean economy today. That did not happen but it did stabilise our economy. And surprisingly IMF later applauded the move. Hence, there was difference in opinion between two Malaysian political giants at that time. Where was Najib? Living a glamorous life in Dr M's cabinet, mousing around, not rocking the boat. Agreeing to whatever is done. No backbone.
Now he wants to blame lack of confidence on Tun M? No sense of collective responsibility. All he was was a yesman back then. Then when he became PM, he had lofty ideals to restructure the economy so that those wrong types of Bumi entrepreneurs that surfaced during Mahathir era won't surface again and presumably with that our GLCs will be managed professionally. Yet where are we? The cowboy Malay tycoons are missing, but there's no discernible reduction of financial scandals. If any, they have gotten worse, and have gone global. This is really rich considering what's dragging our currency down remains 1MDB - clearly a confidence issue. And make no mistake our currency is still down. We are way off from the day he took office.
There are investors coming in precisely because this corrupt government is easy to deal with, RM is still weak which makes buying into Malaysia cheaper. But without restructuring our economy, our Ringgit will remain weak, and in the end, there will be a deficit with respect to selling vs buying overseas assets. To what ends will we continue to sell our businesses and assets? We'd end up working for others. Slaves in our own country. Give another 10-20 years of BN. We'd be exporting maids to Indonesia. Is this his vision?
Posted 6 years ago by Quigon Bond · Reply
Posted 6 years ago by Mogan Rao · Reply