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Malaysia: Isolated and Bankrupt (well, almost....)
by Ahmad Mahboob <ahmad_mahboob@hotmail.com>

Friday: 20 November 1998

“Malaysia is on the brink of bankruptcy. Its central bank will be forced to print money to bail out the country’s financial system. When it does, the Ringgit will be debased. And the regime of Mahathir Mohammad will be deposed” - This is what Independent Strategy, an investment advisory service based in London, is saying to their clients in its latest report
- “Malaysia - The arithmetic of bankruptcy”.

Easy credits and huge overhang of domestic debt would leave our country with a huge resource gap to fill up to the year 2000, as much as RM50bn according to one estimate. And Bank Negara would have no choice but to start the printing presses.

Banks are now caught between the rock and a very hard place: “Mahathir’s regime is now demanding a Soviet-style resurgence of bank lending” Independent Strategy said. However, to the dismay of bankers, these new credits are mainly going to bankrupt creditors and not to productive sectors such as manufacturing and utilities. And judging by the eagerness of our judiciary system to protect these bankrupt creditors, it would take years for the banks and even Danaharta to recover the bad debts- if they were lucky!.

It is now high time for us to acknowledge the severity of our banking problems. The amount of bad debt in the system is actually much higher than what Bank Negara is willing to admit, probably as much as 40% of total loans outstanding!. The recently released NPL figure is grossly misleading. So is the conclusion by Bank Negara that it needs only RM15bn to buy up bad loans. The Bank Negara’s announcement is nothing
but an act of sugar coating a stale donut - if you eat it, you would still end up with a bad diarrhea. Or in this case, the ordinary citizens will be the ones to end up with the stomach cramps from having to subsidize the banks. How many times do we have to bail out
Bank Bumiputera? Enough is enough!

But, lo and behold, it appears that our new Governor is not finished yet. Today (Friday), he reduces the minimum credit card repayment from 15% to just 5% - more money to punt the stock market, right Governor? What else does he have up his sleeves? Well, to be fair to him, perhaps I shouldn’t be asking the puppet and instead go straight to the
Tok Dalang. So, what else do you have in mind, Tun Daim?

“Mahathir’s policy of isolationism, for what used to be Asia’s most internationalized manufacturing economy, represents nothing short of disaster” Independent Strategy said. “It will eventually destroy living standards in a country that has no means of financing a current deficit and so must eliminate it by shrinking domestic purchasing power. And
inflation will debase the Ringgit. Capital will flee despite the government’s control.” Obviously, our “beloved” Trade Minister, Rafidah Aziz, would vehemently disagree with this and pro-Mahathir camp would also argue that so far, no big multinational has pulled out of the country (yet). But then again, the capital controls are only 2 months old...

Is there a happy ending to this so far, doom and gloom predicament? Well, yes and no.... “Luckily, unlike in Indonesia, there is an alternative leadership in the wings, or to be more exact, languishing in jail. Malaysia will rejoin the world under a new, more enlightened
leadership. But sadly, not before Malaysia’s people and the economy suffer terribly”.

As a nation, we have progressed by leaps and bounds since our independence some 40 years ago primarily by opening up our economy and embracing new technology and ideas. For the Malays like myself, we have shed our “katak dibawah tempurung” mentality and adopted the “Malaysia Boleh” attitude with new found pride and confidence. In the age of globalization and the internet, the stupidest thing for us to do now is to isolate ourselves from the rest of the world. LET’S VOTE PROGRESS,

The Silent Majority
by Ahmad Mahboob

Friday: 20 November 1998

For quite sometimes now, Mahathir and his cabinet ministers have been trumpeting the notion that the “silent majority” is solidly behind the government. They even go one step further to put words in the mouth of this so-called “silent majority” by announcing that the majority also denounce the reform movement. For Mahathir and his cronies, the
definition of silent majority is simple. In fact, as simple as Forest Gump’s definition of life - a box of chocolate. According to the ministers, those who don’t participate in the Reformasi demonstrations must be the silent majority. And through illogical deduction, conclude that since the majority of rakyat don’t oppose the government OPENLY,
then they must be 110% behind the government.

Really? I have never been to any of the Reformasi rallies but I totally disagree with the PM on his economic policy and his leadership (or should I say, dictatorship?) in UMNO. Am I part of the silent majority? Or take my dad, for example. He has been an UMNO member for over 30 years and now the treasurer for his division - he believes that the whole Anwar trial is nothing but a conspiracy to silence the ex-TPM. My dad now reads Harakah and contemplating for the first time in his life about the possibility of voting for PAS in the coming general election. Does he fall under the silent majority category? Or how about a few of my friends who have never voted before in their lives but are now eagerly waiting for the next election so that they can vote the opposition. Are they the silent majority?

To hastily generalize that the majority of the rakyat is behind the government is not only a major miscalculation but also a display of extreme arrogance by Barisan Nasional. The general election is probably just a few months away and for the first time since the scandal broke out, the “real” silent majority will be heard.

Recently, MCA conducted survey in Penang (please refer to the latest Far Eastern Economic Review’s intelligence column) and concluded that if the general election were held now, BN would have lost the state to the oppositions. I don’t know how many people were polled for the survey but I can assure you this - they are definitely not part of the government’s “silent majority”.

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