FINANCE Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz has been criticised for saying the Government would not be “too fixated” on the performance of the ringgit, which fell to a historic 24-year low last week.
On Wednesday (Sept 8), the ringgit dropped to 4.5010/5035 against the greenback, its lowest performance against the US dollar since the 1997 Asian financial crisis.
In response, Tengku Zafrul said the Government will continue to focus on the mid-to-long term performance of the economy instead, which could be accommodative with very large fiscal support.
“You have to understand the inflation rate in the US,” he added yesterday (Sept 12). “The monetary tools that are available in Malaysia or other markets depend on the economic scenario of the particular country.”
PKR communications director Lee Chean Chung said Tengku Zafrul’s remarks were worrying and “factually lame”, adding that the ringgit has been falling for over 20 years now.
“Today, the ringgit has fallen as much as 32% compared to the Singapore dollar, 30% against the Chinese Renminbi and Thai baht, 21% against the euro and 15% against the US dollar,” he said in a statement.
“Therefore, it can be concluded that the fall of the ringgit’s value is a continuous, long-term trend.
“The question is: why is this happening?”
The Semambu assemblyman said one such reason is the decline in foreign direct investments (FDI) entering Malaysia.
“Only attracted 8% of FDIs”
He noted that from 2000 to 2020, Malaysia only managed to attract 8% of the FDIs that came to ASEAN, compared to the 24% that came to the country before 1997.
“Now, Singapore has emerged as the biggest FDI attractor by taking 55% of the total FDI coming to the region,” Lee lamented.
Besides that, Malaysia’s export structure has not been upgraded and its industrialisation policy has “failed” to trigger the export of high-value goods, instead relying on cheap electricity and low-paid foreign workers.
This has resulted in the economy being more dependent only on commodities like palm oil, oil and gas, he said.
“And we are aware that this unrenewed sector is not capable of bringing Malaysia to a better level in the next 20 years,” he added.
The cause of all this, Lee said, is poor governance, a business environment that is not stimulating and “full of corruption” as well as incompetent leadership.
He further said that he was perplexed why a minister like Tengku Zafrul could not understand this seeing as a “normal assemblyman” like him could.
When the ringgit declines, Lee explained, people will be forced to cough up more to buy essential goods that need to be imported, such as milk, beef, cocoa, potatoes and others.
“I am saddened that Tengku Zafrul, as a senior minister, is not aware that the decline of the ringgit is a continuous trend and a structural problem that needs to be addressed by the Government.
“He also does not care at all about the hardship and suffering faced by the people now due to the increase in the price of goods caused by the fall in the value of the ringgit currency,” Lee alleged.
He further warned that if Tengku Zafrul “does not care” about the issue of the fall of the ringgit as well, then the price of goods will continue to rise. – Sept 13, 2022
Main photo credit: Malay Mail
