Finance minister loses touch with reality and becomes insulated in his own world — Chong Sin Woon

SEPTEMBER 20 — Looking at the four major policies outlined by finance minister Lim Guan Eng, namely on fiscal discipline, prudent budget, monetary stability and low inflation to strengthen the economy, I think he totally loses touch with reality. He is in full praises of Malaysia’s economic prospect, and disregards the looming economic crisis in the coming 2019.

Following the escalating trade war between China and the United States, it is impossible that the government can be spared from this crisis. Even economists predict that once the China-US trade war starts, the export markets of both countries will be impacted, with more profound effect on Malaysia. There will be no winners in this trade war. Countries including Malaysia, Taiwan and Korea will be affected the most. However, the finance minister continues to sing praises of himself and claims that the Malaysian ringgit is stabilised.

MCA believes that the Asian currencies are weakened in general, and we are not optimistic about the trade prospect of Asian region in the short term, which includes Malaysia. It is most unfortunate that Lim Guan Eng is still being complacent about the current situation, and believes that the trend of Malaysian ringgit is going upward and the market is not crushed. It is unbelievable that he is blaming the former government’s scandals for the market downturn.

There will be an increase of prices following Sales and Service Tax (SST) implementation. What would the finance minister do to keep the inflation low? The data itself has spoken the truth, as the inflation has begun to accelerate in the third quarter, with economic growth slowed. The finance minister becomes a laughing stock when he thinks that low inflation is a good thing.

In reality, low inflation could raise the risk of a deflation which can threaten a country’s economic prosperity. Ideally the government should maintain a high economic growth and low inflation. The finance minister’s remarks on low inflation is not agreeable to the masses.

I believe the finance minister should clarify a few things pertaining to his proposal:

Firstly, what is the purpose of issuing bonds?

What is government debt? Issuing government bonds must be geared towards encouraging spending, improving economic growth and social infrastructure, as well as increasing competitiveness and productivity. If it is to plug the gap in operating expenditure, especially when the government’s tax revenue is reduced and the government need money to support its administration, then it does not make any sense to the country’s development. This is especially true when the welfare aid for the people is removed, where does the money go?

There is no problem in issuing bonds, this is what the former government does too. The finance minister must now answer, why he finds it problematic for the former government to issue bonds, which is no different from what he does now.

Secondly, converting assets into cash, where is the new government heading?

The government can work with private sector via the Public Private Partnership (PPP) on asset liquidation, which will benefit the government, private sector and economy in the long run. The finance minister’s definition on non-strategic assets is vague. If it is a piece of land in strategic location, should it be categorised as non-strategic asset too? It should be classified as strategic asset as it has high development potential and high value. If one sells it at a loss, then it will only exhaust the government’s resources. On the contrary, capitalising the PPP model will maximise an asset’s value, and consolidate the government’s finance.

I would like to advise the finance minister to talk less and do more. Instead of blaming the former government constantly, why not come out with better achievement. More importantly, the finance minister should learn and read more, and not live in his own world, which put Malaysia’s economy on the losing end.

Datuk Chong Sin Woon

MCA Youth Chairman

MCA Education Consultative Committee Deputy Chairman

* This is the personal opinion of the writer or publication and does not necessarily represent the views of Malay Mail.