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Prepare for economic hardship ahead

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The government must trim unnecessary spending and plug leakages, Mohamed Arshad Raji writes.

The just announced 17.1% year-on-year contraction in the second quarter of 2020 is both shocking and expected.

This massive plunge has so far made Malaysia the worst performing economy in Asean. An official declaration of recession is postponed for now, saved by the narrow 0.7% positive growth in the first quarter, otherwise we would join Singapore, Indonesia and Philippines that are already in recession in this region.

What is equally shocking is that in this impending economic emergency, the ruling Perikatan Nasional portrays incoherence and lacklustre leadership, and lacks a sense of urgency.

The ruling parties seem to be hell-bent on intra-party elections, the coming Sabah state election and possibly even a general election. Winning elections and clinging on to power is an art they have mastered. All else, including the oft-promised pledge to serve the country and help the people is secondary. They are busy travelling the length and breadth, not to galvanise Malaysian solidarity necessary to face the impending hardship, but to campaign to secure votes for their survival.

Members of Parliament debating over whether the good and services tax or the sales and service tax is the better system to increase government coffers is not a priority now. Identifying ways to prevent wastage and leakages should take priority rather than speculating over whether GST or SST is better.

Year after year, the auditor general’s reports have shown ten of millions of ringgit lost through wastage due to poor management and the indifferent attitude of civil servants. These are criminal acts and omissions that are causing wastage.

Raising the nation’s debt-to-gross domestic product (GDP) ratio from the current statutory limit of 55% to 60% seems to be an easy way out when other measures have yet to be taken.

One of the first measures is to cut unnecessary spending, to trim and be lean.

Another is to curtail the ridiculous tens and hundreds of thousands of ringgit in monthly income for those appointed to key posts in government-linked companies.

These and much more need be done before ultimately resorting to borrowing, if necessary. Continuous borrowing and increasing our national debt will result in future fiscal crises, when much of our budget will have to be allocated for debt servicing. It is akin to mortgaging the lives of future generations.

Finance Minister Tengku Zafrul Aziz had the impudence to suggest that appointing politicians to statutory bodies and government-linked companies was necessary to help provide checks and balances and ensure firms operated according to government aspirations.

We all know that the politics of patronage has been commonly used for rewards to secure political servitude. Tengku Zafrul has insulted the intelligence of Malaysians by his suggestion. Political appointees to government-linked company boards are irrelevant. The vast majority add no value other than occupying space.

We are aware that there are no easy answers to solving the economic woes in the current coronavirus pandemic and the deflationary world economy. No one can escape the impending hardship.

Our government is not helping by trying to dissuade feelings of doom and gloom through its suggestion that our economy will recover next year. The least it can do is to prepare our people to braise for hardship, to stay united, be resilient and work hard. It can set an example by not engaging in divisive politicking.

Unity is our best resolve against impending economic hardship.

Retired Brigadier-General Dato Mohamed Arshad Raji is president of the National Patriots Association (Patriot)

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