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If the financial crisis is moving 200km per hour from the United States to Asia, our speed of financial crisis management may not be one-tenth of it. Why do I say so?
When will the RM7 billion stimulus package announced by the Finance Minister on 4 Nov be implemented? The Ministry of Finance hopes to start at the first quarter of next year, which means from Jan to March next year. A few months are required for the implementation but the economic situation may have changed by that time. It is as good as tortoise speed for the petrol price adjustments. When the government raised 78 sen for petrol price on 5 June, the then international crude oil price was about US$125 per barrel. And now, the price has dropped to below US$60, the current petrol market price is RM1.43 per litre. But the domestic retail price is still RM2.15 per litre. In other words, the people are now "subsidising" the government 72 cents. This has gone too far for an oil-producing country. | "What is our central bank, Bank Negara, waiting for?" |
It is less effective for Domestic Trade and Consumer Affairs Ministry to adjust petrol prices according to monthly average. Singapore is using the floating price mechanism while other countries make weekly adjustments. Slow adjustment result in high rates of inflation and the loss of the consumer's confidence. Besides, Tenaga National Berhad (the national power company) raised electricity tariffs because of the surge of fuel prices but it does not make any adjustment to electricity prices even oil prices have dropped to so low currently. This makes things difficult for the business sector. The adjustment of lending rate is as well too slow. Europe countries, China and Japan have lowered interest rates to stimulus economy. What is our central bank, Bank Negara, waiting for? Meanwhile, efforts to attract foreign investment is not bold enough. For example, it is merely slightly open and not free enough for the government to relax the 30% Bumiputra equity listing rules. Appropriate actions should be taken in critical period for a tangible result. The authorities should study the reason of foreign capital withdrawal and why fewer and fewer companies are listed on Bursa Malaysia? They should as well study why the ringgit value keeps dropping while ministers keep saying that Malaysian economy is strong and stable? The Domestic Trade and Consumer Affairs Ministry has also announced numbers of new stimulating measures, including automatic issuance of manufacturing licences and full import duty-exemption for raw materials and intermediate goods to be used for domestic manufacturing activities. But the key is, how to alleviate the plight of exporters? Slow response, not comprehensive new measures or the lack of execution will bring serious consequences. It is because if we do not implement stimulus measures, alleviate businessmen's plights and boost consumption power now, we would be unable to respond once the financial crisis hits us. (By LIM SUE GOAN/ Translated by SOONG PHUI JEE/ Sin Chew Daily)
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