Time and again, Najib’s policies have saved Malaysia
The events of 1998 were nothing compared to this great global recession — but Malaysians did not feel it as bad. Why?
Eric See-To, Free Malaysia Today
The funniest news I read yesterday was from Warisan president Shafie Apdal asking for Sabahans to forgive Dr Mahathir Mohamad when he claimed that Mahathir has the knowledge to “Save Malaysia” economically, based on his actions in 1998.
Setting aside the fact that our economy is currently firing on all cylinders, with the World Bank saying we are growing from a position of strength and that we are among the fastest-growing economies among our peers and will reach high-income status in as little as three years, I have come to the conclusion that either Shafie does not know economics or is an outright liar bent on curry favouring with Mahathir.
The 1998 crisis that hit Malaysia was only an Asian economic flu that hit several countries.
If Mahathir was any good, we wouldn’t have needed to be saved in 1998 in the first place.
We also leave aside the fact that those countries similarly affected in 1998 also recovered at the same time as us, with some such as South Korea doing much better as they had implemented the necessary reforms which Mahathir did not want to.
When Najib Razak became prime minister in 2009 (he was made finance minister several months before that), the world was in the grip of the great global recession — which economists say was the worst global recession since the 1930s’ Depression.
The events of 1998 were nothing compared to this great global recession — but Malaysians did not feel it as bad. Why?
Malaysia went into recession in early 2009 but due to several stimulus packages immediately executed by Najib, we quickly recovered and have now enjoyed nine years of continuous growth.
It is also an irony that Najib is also being blamed for the higher government debt incurred by those stimulus packages. Essentially, some Malaysians are blaming Najib for saving Malaysia then!
Unlike Mahathir, in 2009, Najib did not have to peg our currency, did not have to set up Danaharta and Danamodal to bail out our banks, none of our local conglomerates went bust and our stock market did not plunge 80%.
2014: When commodity prices crashed
Najib was again tested in 2014 when global commodity prices crashed. This affected our major exports — petroleum and palm oil.
The last time Malaysia was tested in such a manner was when commodity prices crashed in 1985 under Mahathir. Our country immediately went into a deep recession again.
Unlike in 1985, due to careful policies, including the necessary but much-politicised goods and services tax (GST), implemented by Najib, Malaysia did not go into recession, like other major commodity-exporting countries such as Brazil, Saudi Arabia, Brunei, Bahrain and many others.
Not only did we not register a single quarter of negative growth but we quickly recovered again and have now gone on to achieve five consecutive quarters of increasing growth.
Again, we did not have to peg our currency, did not have to set up Danaharta and Danamodal to bail out our banks, none of our local conglomerates went bust and our stock market did not plunge 80%.
On the contrary, other than the focus on stimulating the domestic economy, using BR1M (1Malaysia People’s Aid) and other measures, not only did Najib decide not to peg the ringgit then but he also recognised that a weaker ringgit would promote exports, tourism and manufacturing growth — thus the focus on these areas in the 2015 and 2016 budgets.
It was a classic example of making lemonade when given lemons.
The results speak for themselves as our exports, tourism and manufacturing sectors are experiencing a mini-boom, our domestic economy continues to remain strong, while our stock market and currency have recovered strongly.
I am sorry but in his effort to fool Sabahans into accepting Mahathir, despite Mahathir being responsible for Project IC and ignoring Sabah and Sarawak for 22 years, Shafie has shown that he simply does not know what he is talking about when it comes to the economy.
Eric See-To is Barisan Nasional strategic communications deputy director.
