The Malaysian government has assembled a team of top flight economists and financiers to tackle the economic mess the country has fallen into, following the 1MDB saga, the RM2.6bn donation shocker and the nosediving ringgit.
On his appointment as one of the members of the emergency economic committee, CIMB Group CEO Nazir Razak, in a post on Instagram, said:"Expected a new committee, but not with me in it! Anyway, will speak truth to power, hope it will help Gov't to steer the economy through this turmoil, and lessen the pain".
The aim of the committee is to deal with the ringgit, which has fallen to 17 year lows amid investor flight.
It will consist of 11 members, and will be headed by Economic Planning Minister Wahid Omar, formerly Maybank CEO.
Nazir, who is the Prime Minister of Malaysia's Najib Razak's brother, has been critical of 1MDB, the debt-laden state investment firm.
Najib is the chairman of the 1MDB board, and has resisted calls to sack the entire board by his former deputy PM Muhyiddin Yassin. Yassin was subsequently sacked from his post in July, and has since led a low profile campaign focussed on the 1MDB's debts, the billions in donation in Najib's personal private banking account and the lackluster leadership within Umno.
The Special Economic Committee (JKE), PM Najib said, will develop immediate and medium-term plans to strengthen Malaysia's fundamentals, this after insisting only last week that the country's economic fundamentals were strong.
"This fits the pattern. The government has been in denial of the deteriorating economic situation since the fall of the Crude Oil Prices, and the subsequent fall of the ringgit.
"They insisted the economy was strong, resilient and powerful, giving a false sense of security to the people. And now this," said Cordoba Ali, a political analyst who is also a contributor to The Week Review.
The list of 10 corporate and economic leaders did not get the unanimous support of the regime's critics, with some arguing that the absence of Bank Negara Governor Zeti Aziz in the line up is a mistake, while others pointed out there were no women economists or corporate leaders on board.
"Don't tell me this is an anti-feminine unit, composed of filthy rich men who forms part of the oligarch," said Cordoba.
Others suggested that Rafidah Aziz should have been appointed to the committee. Rafidah was the minister for international trade and industry under the Tun Mahathir Mohammad and Abdullah Badawi regimes.
Known as the 'iron fist' lady during her ministerial days, she would have been a good addition to the otherwise anti-feminine list of capitalists, said Cordoba.
"There are probably limits to what the committee can do, as a large part of the (stocks) sell-off reflects the politics and 1MDB," said Chua Hak Bin, economist at Bank of America Merrill Lynch.
Chua, who spoke to Reuters, said the absence of central bank governor Tan Sri Dr Zeti Akhtar Aziz was "disturbing" and would limit the committee's options in reviewing economic policies.
He added the absence of Bank Negara on the committee would limit its access to policy options.
Nevertheless, Cordoba said some of the members of the committee might just quit if the government did not listen to their advice.
Among those he tipped as potential candidates to leave the emergency committee are Najib's brother Nazir, Andrew Sheng, a Malaysian who is chief advisor to the China Banking Regulatory Commission and Prof Datuk Dr Noor Azlan Ghazali, vice-chancellor of National University of Malaysia.
Rosli Yaakop, a former deputy manager of Bank Negara's economic department, said the formation of the committee was “late”, and issues with the economy had already reached “an advanced stage.” “Forming it now has only proven that the current administration has been in denial syndrome”, Rosli said in an interview published on The Malaysian Reserve yesterday.
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By The Week Editors
