Politicians must stop painting rosy picture of Malaysia’s economic health

ON a day when the ringgit has slid to RM4.40 against the greenback – the lowest level since March 2020 – or to a ‘water-face-dropping’ RM3.17 against the Singapore dollar, there is a clarion call for ministers, pro-government MPs and state assemblymen to be realistic when offering assurances about Malaysia’s economic health.

This is because their over-zealousness in wanting to score brownie points from their electorate – especially so in non-urban locales – can send the wrong signal about the actual state of Malaysia’s economic/financial health.

As the entire world is grappling with soaring inflation rates that has prompted the US Federal Reserve to reaffirm its hawkish stance by already raising its benchmark interest rate on a back-to-back basis, offering false hope to citizens is surely an unpardonable moral misconduct.

The worst ‘sin’ imaginable is for a leader with shallow economic/financial knowledge to leverage his unrefined wits to convince rural folks that “everything is fine with the Malaysian economy” or that “Malaysia is still a favourite foreign direct investment (FDI) destination” when such claims are so far-fetched and out of touch from today’s reality.

At the current juncture when both volatility and fragility prevail in the Malaysian economy, leaders must refrain from feeding their oblivious audience (especially rural folks) with pure political statements (false hope) to remain elected.

Even if they need to, rhetoric should not be allowed to overshadow the truth – they must put in effort to strike a balance, ie. by encouraging rural folks to be prudent with their spending or to always save for rainy days, or to justify why the Government cannot continuously dole out subsidies (which instead of helping the B40 group, has actually enriched the T20 group as in the case of fuel subsidy).

Tengku Datuk Seri Zafrul Abdul Aziz (Pic credit: Reuters)

Recall how Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz has during his ministry’s Hari Raya open house on May 17 brushed aside doomsayers’ forecast of a global recession as “premature and unwarranted” while assuring that Malaysia is on track to meet the economic growth target of between 5.3% and 6.3% this year.

Even if such projection sounded bullish considering the global economy is currently shrouded in uncertainties, he did substantiate that Malaysia’s economic growth would be supported by the Government’s expansionary fiscal policy as well as accommodative monetary policy. And there are some conditions that need to be fulfilled.

“However, we remain wary of potential downside. There is a potential risk (due to) the war in Ukraine, high commodity prices and global monetary policy tightening. As a result, the Government will need to ensure adequate fiscal flexibility in the future to manage such a risk,” he justified.

“This is why we intend to gradually reduce the fiscal deficit from 6.4% in 2021 to 6% in 2022 and also rationalise the subsidies to be more targeted.”

Considering that many of today’s rural folks are more aware of their surroundings now, plain/cheap political talk or empty promises would no longer be able to land a vote.

Obviously, they know that many politicians are gifted with ‘forked tongues’ and would only share what they wish others to know while unpleasant information will usually be swept under the rug.

Recall how former prime minister and Bersatu president Tan Sri Muhyiddin Yassin claimed during the official launch of the Perikatan Nasional (PN) election machinery ahead of last March’s Johor state election to have received a report from Tengku Zafrul indicating that Malaysia’s economic edge is dulling and would soon be overtaken by its ASEAN neighbours, namely Indonesia and Vietnam.

“Yesterday (Feb 17), I asked Finance Minister Datuk Seri Tengku Zafrul Tengku Abdul Aziz to deliver a report… I will leak (bocor) it in time … (about) the position of our national finance,” the Pagoh MP shared.

“How long can we last? How long will our annual revenue be able to pay salaries and support our national development? Will we have enough money to support our huge pension payment?

“That is as much as I will say (for now). The country’s situation is not as rosy as being let on. This is the biggest challenge at the national level.” – May 19, 2022

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