As ringgit slides, Putrajaya more concerned with power, says Bloomberg columnist
Putrajaya is more interested in holding to power than retooling Malaysia's economy, said a Bloomberg columnist.
Citing the current slide of the ringgit which many had attributed to worsening global outlook, plunging commodity prices and the current political scandal linked to Prime Minister Datuk Seri Najib Razak, William Pesek said the real culprit is the year 1997 when then Tun Dr Mahathir Mohamad pegged the ringgit and introduced capital controls.
He said while the move was initially lauded and enabled Malaysia to avoid the fates of its regional neighbours which suffered economic chaos during the Asian financial crisis, it has now backfired and Malaysia could end up as the "biggest loser in the region".
He said the crisis had caused Malaysia's neighbours to improve its transparency, strengthen their financial systems and limiting collusion between public and private sectors.
In contrast, improvements in Malaysia's corporate governance have been "slow and uneven", the affirmative action policy is still in place, fight against corruption and efforts to make the country less dependent on energy exports have been "tepid", he wrote.
"Today's economic troubles are the product of that complacency. Had the Malaysian government worked harder to strengthen economic fundamentals and win the trust of global investors, Najib's scandal might not be sending the ringgit to its lowest level in 17 years," said Pesek, referring to the US$700 million (RM2.6 billion) money in Najib's personal accounts, which the Malaysian Anti Corruption Commission (MACC) said was from a Middle Eastern donor.
"Had officials in Putrajaya, the country's administrative capital, done more to internationalise Malaysia's business culture, foreign investors wouldn't now be rushing for the door," he wrote, adding that the investors mistrust of Putrajaya stemmed back to policies pursued in the last 18 years.
Pesek said since Dr Mahathir took over as finance minister after sacking Datuk Seri Anwar Ibrahim in 1998, Malaysia's "awkward centralisation of power" has continued until today.
He said it also enabled Najib to come up with his brainchild, the troubled state fund 1Malaysia Development Berhad (1MDB), which has accumulated debts of RM42 billlion and is currently being investigated for financial irregularities.
Coupled that the recent sacking of Najib's deputy Tan Sri Muhyiddin Yassin, Pesek described it as history repeating itself.
"Just as in 1997 and 1998, the government is more concerned with closing ranks than retooling the economy," he said.
He said while other nations also faced troubles, Malaysia's increased capital flight is "particularly worrisome" and the weakening ringgit has seen some quarters, including Dr Mahathir, proposing that the currency peg be reintroduced.
"But the mere mention of another peg suggests Malaysia's political establishment is still more concerned with the symptoms of the country's problems than the underlying causes.
"The ringgit isn't sliding because speculators like George Soros (who Mahathir blamed in 1997) are attacking it. Malaysian assets are suffering because the government failed to do basic economic maintenance -- in part because it avoided the worst of 1997 and 1998, in ways Bangkok, Jakarta and Seoul couldn't," he said.
Pesek said Malaysia's economy is not about to collapse, but stressed that the plunge of the ringgit does reflect its underlying fundamentals, which can be traced back to 1997. – August 11, 2015.
- See more at: http://www.themalaysianinsider.com/malaysia/article/as-ringgit-slides-putrajaya-more-concerned-with-power-says-bloomberg-column
DESIDERATA: I WON't do my usual COMMENTARY During my FICTIONAL WRITING LEAVE: just CUT&PAStry for the RECORD, OK!? DId I hear murmurs of PROTESt? TAKe to the streets whey! YL,DESi
Najib’s talk of people power smacks of hypocrisy, says former Perak MB
Former Perak menteri besar Datuk Seri Mohammad Nizar Jamaluddin today tells Datuk Seri Najib Razak to stop preaching about people's power when the prime minister was himself involved in "orchestrating" the demise of the opposition-led state government in 2009. Nizar, who was ousted from power in 2009, said Najib's speech last night about “people's power” to choose the government and that it could only be applied during elections, was smacked with hypocrisy.
If that was the case, he asked Najib why was the democratically elected state government was ousted through the "back door" even without a vote of no-confidence taken in the legislative assembly.
Nizar said there was no doubt that Najib was now speaking with forked tongue as his action did not match his words. "Najib's speech last night smacks of hypocrisy. He is asking the people or the MPs not to do what he did in Perak in 2009," Nizar told The Malaysian Insider.
The Changkat Jering assemblyman, said this in response Najib's speech in Pasir Salak where the prime minister said that the people had the right to judge or prosecute whom they liked or hated during the polls held once in five years.
"Elections are the time when we leave it to the people to choose the government. Judge us, prosecute us as the government of the day whether it is good or not, the people can determine it.
"In between elections, we cannot do anything that contravenes our country's constitution and laws."
Nizar said it was Najib and his now deputy Datuk Seri Ahmad Zahid Hamidi who worked behind the scenes to cause defections that resulted the then Perak government to fall.
At the time, Pakatan Rakyat (DAP, PKR and PAS) had 31 seats while Barisan Nasional had 28 but three assemblymen suddenly became BN-friendly.
Najib, then deputy prime minister, was the Perak Umno chief while Zahid was his deputy.
"Najib and Zahid went to the palace to negotiate with the late Sultan Azlan Shah," said Nizar.
At this meeting, he said Najib presented letters of support from the 28 BN assemblymen and the three BN-friendly representatives.
The letter said that they will support whoever Najib names as menteri besar.
The sultan later appointed Datuk Seri Zambry Abdul Kadir as the new menteri besar on the following day after he was convinced that Nizar no longer had the support of the majority.
Nizar, who failed to convince the ruler to dissolve the assembly, then filed a judicial review to challenge the appointment.
Constitutional lawyers said the Federal Court had in 2010 pronounced that it was constitutional to remove the chief executive of a state without having to take a vote of no-confidence in the legislature.
They said instead, statutory declarations (SD) from majority elected representatives to remove the government was constitutional.
Lawyer Edmund Bon said a five-man Federal Court bench led by current Chief Justice Tun Arifin Zakaria had approved this procedure in the Perak case of Nizar versus Zambry.
Bon, who was in the legal team that appeared for Nizar, however, said that most constitutional lawyers and academics was still of the opinion that the better option was to take a vote of no-confidence in the legislature.
The Federal Court ruling established the principle that the appointing authority (Yang di-Pertuan Agong, the Malay rulers and the governors) could look into extraneous factors to determine whether an incumbent head of government has lost the confidence of the majority of elected representatives.
Once this has been determined, the head of government must resign together with his cabinet or exco members.
The ruling also implied that the head of government was deemed to have been dismissed from office if he refused to resign after losing the confidence vote.
This paves the way for the appointment of a new head of government or dissolution of the House.
BN has 134 seats in the Dewan Rakyat, the opposition (DAP, PKR and PAS) 87 and one independent (Tan Sri Abdul Khalid Ibrahim – Bandar Tun Razak).
Any change of prime minster is only possible if more than 112 MPs expressed lack of confidence in Najib. – September 5, 2015.