MASALAH TERBESAR BAGI NEGARA KITA SEKARANG

 The following is based on Ganesh Sahathevan's post today at Realpolitikasia.

 A very strange statement has been made to the Press today as follows:

• The current decline in the value of the ringgit cannot be likened to its fall during the Asian Financial Crisis in 1998 as the country has a more stable economic foundation now
• the ringgit’s drop in 1998 came amid increases in the inflation and unemployment rate

Ganesh Sahathevan (Realpolitikasia) has looked up the charts from the Statistics Department Malaysia which disproves the above statement completely. 

'The graph (below) displaying statistics from Malaysia's Department Of  Statistics, says otherwise. Unemployment was at its lowest and GDP growth at its highest before the Asian Crisis of 97-98'

And here is that graph:

 

 

As you can see in the graph, at the height of the Asian Financial Crisis in 1998, the unemployment rate was at its lowest levels of below 3.2%.

For comparison only unemployment was significantly higher at 4.1% in 1993. I believe the country had a new Finance Minister in charge in 1993.

And from 1998 to 2000 the GDP growth jumped back from minus 7.3% to positive 8.9%, a swing of 16.2% in two years.

MASALAH TERBESAR BAGI NEGARA KITA SEKARANG 

Ok now we come to the real issue. The masalah terbesar bagi negara kita sekarang is that planet earth's greatest reformer since Mandela, Mahatma and Siddharta does not seem to have a basic grasp of economic principles. 

Just a few months back the suggested cure for the weak Ringgit versus the US Dollar was that Malaysia would have to dedollarise the economy. 

"the country is looking to increase trading in local currency, or de-dollarisation, in order to reduce reliance on the U.S. dollar - Reuters"

These are wild horse statements. Kuda liar statements which have no relationship or interconnection with the weakening Ringgit (or to the price of fish in Somalia). 

Unemployment does not have direct correlation with a weak currency.  The United States has also faced bouts of higher unemployment yet its currency did not depreciate against its trading partners (like Malaysia).

The lack of understanding of basic economic principles is not the biggest problem. 

The bigger problem is the refusal to acknowledge that the economy is facing problems. The refusal to acknowledge that the Ringgit is indeed weak and weakening.

This refusal to acknowledge that problems exist is the bigger danger facing the country.

The denial syndrome. Just deny that there are any problems.

Because when you deny that problems exist then you do not have to take the necessary remedial measures. 

What for? Untuk apa? There are no problems. 

This is the masalah terbesar that we are facing now. 

The Ringgit is weakening? So what?

 

Look! The emperor says he is fully dressed.

 The views expressed are those of the writer and do not necessarily reflect those of MMKtT.