The secret stimulus package
Even in the best of times, it is bad practice to run an economy on a political timetable. In this unprecedented global economic meltdown, it is a disastrous practice.
We have an economic crisis on a scale none of us has ever seen before. Despite being spared the first wave of financial repercussions of this crisis, we are fully exposed to the collapse of the flow of global manufacturing. The value of the retirement savings of America’s Baby Boom generation has been halved. Their demand for Asia’s manufactured goods will be drastically reduced. This disrupts the entire system of global manufacturing whose largest consumer and debtor has been the United States. In nett terms, Asia manufactured and America consumed. Asia lent, America borrowed. That arrangement is over. Asia’s manufacturers will have to rely more on an expanded domestic demand, overwhelmingly from China. A new global economic order will have to emerge from the destruction wrought by this crisis.
What are we doing about this crisis and opportunity?
We need to be prepared to weather this crisis, but more than that we have to be prepared to come out of it equipped for this new landscape, which will be dominated even more than it has been by the growth of the BRICs (Brazil, Russia, India and China).
The last decade has seen us slip from being a model of development and growth to an also-ran economy.
I have argued (see here and here) that we need to get beyond thinking merely about “stimulus packages” in how we attack this problem. It’s not about throwing money at a problem. We need an economic plan, a strategy, a vision for what we want to excel at, how we are to reform and restructure the economy so that we emerge more competitive, instead of having just “survived” passively. And we need to organize ourselves to execute these plans.
In the Great Depression of the 1930’s, the Americans built their national highway system. The Germans built the Autobahn. Eighty years later this infrastructure continues to support economic growth in these countries.
South Korea used the Asian Financial crisis to reinvent itself as the broadband leader of the world.
I have suggested we should develop our petroleum industry to focus on improving energy security for the region. This involves developing oil and gas and petrochemical industries and oil and gas trading and financing capabilities. It involves building storage and transport facilities that tap our ancient geographical advantage as the maritime crossroads between China and India, East Asia and the West.
I have also suggested a national housing programme.
The point is to have an idea, and to be absolutely serious about the execution of that idea.
How we cope with the present crisis will determine whether we come out with a chance at being once more in the leading pack, or seal our irrelevance even in our own backyard.
So far, all we have seen are an RM5 billion plan to prop up the stock market and a RM7 billion stimulus package. There appears to be no clear economic thinking behind either measure, and nobody seems to know what has and has not been implemented. So far the government has not revised its official growth estimate of 3.5%. This means we have essentially failed to respond to a problem that in any case we don’t officially acknowledge exists.
And so far all details of the Second Stimulus package are a secret. The Prime Minister has dropped the hint that “it will be bigger than the first”. All we know about the thinking behind this package is that “with enough money, growth is still possible.”
Estimates of the duration, proportion and depth of the crisis are still being worked out by world markets. So there’s no need to stand by outdated projections as if they were magic numbers. We are past the era of central planning. Economic plans should be transparent and discussed openly so that the public and the business community can respond to them.
The US stimulus package was debated heavily before it was passed. The world knows what the US, UK, China, Singapore, Australia and South Korea will do in response to this crisis, but not what Malaysia or North Korea will do. We need greater clarity, and quick, transparent decisionmaking. There is no need to politicize growth estimates or to time stimulus announcements as if they were political goodies.
This is a rescue we are talking about, and our future is at stake.
My dear Tengku.
I have been following the countless times you generously share your wisdom and fears of the imminent collapse of not only global economy,but the world order.
My only hope is that somewhere within the Government and powers of the day ,they take heed of your recommendations and go beyond damage control and as you mentioned, prepare to position Malaysia and Malaysians and armed them to heal and rapidly recover when the opportunity arises.
We should gear ourselves with tools of economic growth by building infrastructures in the country to be ahead of at least our neighbors.
We are ‘blessed’ that we did not have an efficient and effective government that would have gone global boosting an egoistic image thus rendering us less, exposed for the moment to the collapse of global economic systems.
What we shall face are “in your favorite words” the contagion effects of the collapse.
It is about time that we reconciliate and work together to help ourselves rather than create more fires to fight.
If it is destined that Najib becomes PM,I hope that you would be able to help him to provide the remedies to heal. I hope there will be a position of Senior Economics Minister that would be for you to effectively provide the solutions and implementation of the economy.
Let us put aside all our differences and save this blessed country of ours.
I sincerely apologise if my suggestions above offended you but I believe you and only you commands the respect and credibility of those that can join hands to make it happen.You can convince them that it is no longer about power.Let us all stand up and be counted.
Dear Tengku, you are one of the few… sorry, the only one I respect of all umno members. You have vision, and ideas that would help us push through this trying times. I pray that you will come out a winner in the upcoming umno election even if you think that ur chances are slim. It’s still a chance. You will not live forever. If now it’s not the time for you to stamp you foot and fight for what you believe is correct. Then sad to say Tengku, it will never be your time. But if you really try and still fail, then I guess you have tired your best and only God will know who to embrace when the time comes. God bless you Tengku. Thank you for the shared wisdom.
You saw it coming, you get an idea on how to solve it, you can forecast the disastrous future if nothing’s done, and you show you really want to save the nation.
You have everything Malaysian need as a PM, but too bad, you are not in power. Too sad, the readers that you hope to read your article are ignoring you.
Why are you still putting hope for the leaders to do something sensible these days?
Why not you make the extra effort to try to be in power again to execute your plans?
Dear Tengku, I know you had tried to nominate yourself as President of UMNO, and you failed to gather enough nominations. But don’t give up, the road to PM is different from the road to UMNO president. UMNO president is just a way to become PM, there are other ways for you to be the PM.
Unless, in your heart, you only feel responsible for saving UMNO but not Malaysia…….which I hope is not true.
Tengku
I am no longer a Malaysian citizen but like the others who have posted, you are the only UMNO politician that still commands any respect from the people. I believe it is time that you rise to the occasion and make a difference. Our ex Prime Minister, John Howard, was also defeated many times before he finally became one. It was rumoured that it was prophesized that he would become Prime Minister but his time was not right in the early days. I believe you are in the same boat.
You started the Semangat 46 and you can do it again. Bring with you good UMNO politicians and join forces with PR and make that change. With you as PM and Anwar as DPM or vice versa will be a refreshing start for a new dawn in Malaysia. After you have sorted out the Election Commission, go back to the people and get the real mandate to spring clean everything.
Good men are needed and they owe it to the long suffering people of Malaysia. Do this and history will remember you as heroes.
Dear H.H. Tengku Razaleigh
I agreed with your economic views and had learned that law number 1 in economy is that the businessmen are the people who determined business success and economic growth within economic factors and not the role of the politicians. It is a law of demand and supply and nothing much to do with political intervention. At this situations why politicians are still talking nonsence about economic development, growth, stimulus and et-cetera instead of serving the people and businessmen who are the actual players and obviously are tax payers.
Most of economic packages initiated by malaysian politicians and authorities concerned are of old fashioned, ad-hoc and bulldozed without strategically planned. Most of it not survive the 5th anniversary. I would like to compare even a poor County in Communist China had changed into business centres and their people are long ago allowed to be rich in their own way in contrast with our nation which went reverse and in wrong direction.
Dear All,
The secret will be exposed in the parliament this coming March 10. Be that as it may, we can safely say that debating economic package in the open is not the practise adopted by the Barisan Nasional regime for as long as one can remember, not even during the time when Tengku Razaleigh was the Finance Minister. Everything will be presented during the Budget day and whatever decided therein would be deeemed as good as sufficient in the interests of the Rakyat. The debate would only be at the parliament and due to the fact that Barisan Nasional had always commanded the two third majority, everything were and are passed without a hitch. This has gone into the sub-concious of the BN leadership and they were unable to settle well into the current newly found environment where they (BN) has lost the two third majority in the parliament. However, they have yet to learn from this lesson and continue to behave as it is their God-gift rights in whatever policy that they do. For example, the NEP should have already been long consigned to the muzeum as it was grossly abused by politically well connected businessman for their own selfish interests. Many have raised their concerns including Nazir Razak over this policy and demanded it to be replaced and in exchange for a more liberal policy that fits the current economic world order. However, if one were to listen to the demands from Khir Toyo, Mukhriz, Ali Rustam and many other UMNO leaders and warlords, they would have reconciled with the fact that UMNO will never compromise on NEP as it is a sacred cow to them. Killing this sacred cow is as good as asking them to throw away their instant pasport to richess.
Similarly, the comment by Tengku Razaleigh is something has been voiced long time ago but were brushed aside by the power-that-be. It is no rocket science that one should collectively decide and debate on government policy before implementation but the fact is that we have not been given the chance.
Dear All,
Leaders in UMNO have plenty of trouble learning from the lessons of history. Maybe it is because they feel like businessman who are supposed to be looking forward or feel themselves too intelligent to learn from history and the mistakes of the past. Such arrogance has also been the Achilles heel for our country to move forard fast and high enough to compete with other competing nations like Singapore, Hong Kong, Taiwan, Eastern Europe, Latin America and even a few African nations. For example, the GLC companies and its leaders. These leaders are hand-picked by political leaders from UMNO for reasons best known to them. We have heard that a corporate leader who was recently elected as CEO of the year despite causing the GLC he led a loss of RM950 million. One may ask and question as to how such a leader be elected as CEO of the year, but then again were your questions entertained by the government? Can someone write to the Prime Minister or the Deputy Prime Minister and question him as to the basis of the selection? Perhaps you can write but I don’t think he will give you an answer or he will to the parliament. In other words, what has been selected or decided is final and no question asked, please.
This is the real Malaysia that we are living in today. A Malaysia which talk openly about transparency but not the will to practise what it preaches. A First Class Infrastructure but Third World mentality best described what we are today.