Anwar: Economic crisis ahead


In August last year, I had warned about an impending financial crisis that would befall Malaysia because of the mismanagement of the nation’s economy.

I said that particularly on account of the massive hidden debt, the BN administration had failed to practice financial prudence, accountability and transparency.

crisisAs usual, even then instead of taking cognisance of our legitimate concerns and rectifying the situation, Prime Minister Dato Seri Najib Razak chose to be the proverbial ostrich in the sand by sweeping financial dirt under the off-balance sheet carpet.

Double whammy

Today, this culture of wastage and opulent and spendthrift ways cloaked under shady procurement processes and opaque privatisation awards has returned to haunt us.

And under these circumstances, we are heading for an economic crisis with a double whammy – declining international crude oil prices coupled with a depreciation of the Ringgit at levels unseen since the Asian Financial crisis of 1997.

The continuous decline of Brent crude price since the middle of the year from the level of USD 110 / bbl to USD 65 / bbl means a reduced income of almost 40% of sales of crude oil.

The additional revenue of RM 25 bn announced in the recent budget is at serious risk of being wiped off and it won’t be an exaggeration to say that the government will struggle to reduce the level of national deficit to 3% of GDP for the year ahead.

Add this to the plunge in the value of the Ringgit against the US dollar to almost 3.5000 (1 USD = 3.50 MYR), the rakyat will be facing a bleak future in terms of higher prices for local food products, especially imported. Since almost 90% of our basic foodstuffs are imported, any withdrawal of food subsidies will exert additional burden on the people, being already saddled with the overall rising cost of living encompassing their daily lives.

The prices of crude palm oil (CPO), rubber and tin have also declined drastically causing further hardship on the people, even before factoring the implementation of GST for 2015.

1MDB and the mother of all scandals

With declining revenues and the accumulated debt, are we going to do another 1MDB? That is already one mother of all scandals too many and the people will have none of that.

As it is, our sovereign rating is at risk of an imminent downgrade. Economic growth will be affected with the reduction in domestic economic activity. Many local businesses will face additionally severe challenges.

What is even more frightening is that our economy is rudderless with the captain of the ship nowhere in sight.

Where’s the leadership in all this? There has not been one statement forthcoming from the Prime Minister cum Finance Minister alluding to the current state of our economy let alone the problems the people are already facing – and the even greater hardship that they will have to endure.

Nothing appears to be done as the UMNO-BN leaders in typical fashion have gone into denial-mode. Surely, it is utterly reckless and irresponsible of the PM and his cabinet to leave the nation in suspense.

Race relations and the ‘maqasid al-Shari’ah’

Meanwhile, there are attempts to rationalise the defence of draconian laws such as the Sedition Act and the purported protection of royalty by resorting to supposed religious reasons.

Race baiting and speeches tending to provoke communal and religious tension are again dominating the UMNO-BN controlled media. They have resorted to citing the ‘maqasid al-Shari’ah’ (the higher objectives of the Shari’ah) in order to legitimize their racism and extremism.

This is a travesty and a grave insult to Islam. In doing so, they have completely distorted and misrepresented the true purport and importance of the maqasid al-Shari’ah.

I must therefore once again stress that the higher objectives of the Shari’ah enjoin on the people and particularly those who hold the reins of power to ensure that justice and rule of law prevail at all times, and that the sanctity of life, equality and all humanitarian concerns and ideals be honoured and preserved. In other words, fundamental human rights must be protected.

Human rights are universally grounded in moral principles. Just as enshrined in all democratic constitutions, they constitute the fundamental liberties of the people and are inalienable.

Persecution and oppression is an affront against human dignity, a dignity that is sanctified and protected in the Quran requiring all to uphold it.

Religion is therefore being exploited to serve the interests and agenda of certain vested groups masquerading behind race and religion. The so-called defenders of the race seem muted on inequality and abject poverty amongst bumiputras.

The so-called champions of the faith continue to live in opulence while flouting Islamic principles, condoning cronyism and endemic corruption. They talk about the maqasid but display arrogance and intolerance and deny freedom of expression and public discourse.

Even when we cite world renowned authorities to support our contention that there is no right for any Muslim or authority to deny the use of the word ‘Allah’ by anyone, we continue to be demonised. The prohibition is not a theological issue and clearly not a prescription in Islam.

This is evident by the fact that the prohibition is confined only to the Peninsula and deemed politically expedient to be allowed for use in Sabah and Sarawak.

The issues of corruption and abuse of power continue to showcase the failure of governance. The lack of transparency in dealings together with utter disregard for accountability will serve only to contribute negatively to the nation’s sovereign rating.

The people need answers. Prime Minister Najib must step up to the plate and explain without any further delay.

Anwar Ibrahim
12th December 2014

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