Young Malaysians are knowledgeable.
After the revelations made by the Wall Street Journal (WSJ), there was not much room for any
puppeteers to stage the next scene. They went berserk with accusations of falsehood, and of baseless allegations - without knowing the material concerns of the 'public court' in Malaysia.
To be fair, despite so much promotion on the Economic Transformation Program (ETP), many of Malaysia's current generation have failed to witness substantial uplift of their day to day reality.
Sometimes, they are over-aggressive on certain stances that are significant and affects their belief systems.
But one needs no further revelations to know that the fact remains that Malaysia's real economy is taking a hit from its internal unpopular policies.
And it is in a mess.
The subsidy cuts could save Malaysia billions of dollars off its balance sheets. The gradual removal of government-sponsored cuts in the prices of petrol, liquefied petroleum gas and cooking oil could bolster Malaysia's fiscal position.
The Goods and Services Tax (GST) started on April 1 this year, a move to counter the decline in government revenue following the plunge in crude oil prices.
The estimated monthly collection of RM 3 billion was enough to convince Fitch's Rating to upgrade the outlook to 'stable', somehow.
It has been difficult for the ruling government to justify, amid the diminishing of purchasing power among Malaysians, why all these did not impact the lives of the people on the streets?
The consumer price index (CPI) for May 2015 increased by 2.1 per cent to 112.3 compared with 110.0 in the same month last year.
The hardest dent in the government's credibility, so far, is the debt pile-up of 1Malaysia Development Berhad (1MDB).
Its existence and purposes have been questioned due to the potential astronomical liability that is beyond its official borrowings.
WSJ reported the trail of money moved via government agencies and companies closely linked to 1MDB, before allegedly appearing in Prime Minister Najib Razak's personal accounts.
The decision taken recently by the Malaysian task force to freeze six bank accounts linked to the Prime Minister's personal accounts has only exacerbated the issue and furthertarnished investors' confidence.
Since Najib came to power in 2009, this crisis has given rise to questions on his ability to handle the economy.
With broad support among the ruling coalition and backing from some ministers, his popularity with voters has simply but eroded.
Unfortunately, as a result, Malaysia's sound economic fundamental has started to shred into pieces.
The ringgit has depleted by 8.1 per cent on year-to-year basis. In fact, the ringgit is Asia's worst performing exchange rate this year, dropped 23 per cent from a 2011 high.
The unemployment rate in the first quarter of this year increased to 445,000 individuals from 397,000 in the previous quarter.
In the first quarter - the government's current liabilities account also recorded an increase about 2.4 percent to RM 596.793 billion.
In the last five years, debt--to-GDP has risen.
The trade data released by the Department of Statistic showed the total trade in May 2015, decreased 6.7 per cent, RM 4.4 billion, to RM 60.5 billion on a year-on-year (y-o-y) basis. The trade surplus is also declined 2.3 per cent from RM 5.6 billion to RM 5.5 billion, in the same month.
Considerable decreased exports were recorded for palm oil and palm-based products, and electrical and electronic products, the latter of which accounts for 34.9 percent of the total country's exports
Malaysian economics have been resilient, post global financial crisis.
The introduction of capital controls had helped Malaysia to restore certainty in the market and boost the export.
The Fitch's surprise decision may provide a temporary cushion for the government to regroup and re-strategise.
The plans should aim for fiscal consolidation and beef up the current-account surplus.
For example, the offloading of civil servants housing loans could reduce the debts up to RM40 billion ($10.5 billion).
But there are three main reasons why Malaysia economy will be wounded longer. And it is not entirely due to the weakening of the economic fundamentals.
First, current uncertainty in the capital market and political arena is probably damaging and shaking future demand. Foreign funds have been cashing out of Malaysia at the fastest pace in Asia this year.
The market is still waiting for further developments regarding 1MDB, apart from stumbling oil prices.
The damage done by this period of uncertainty and financial drought will be severe.
Secondly, Malaysia is still unfazed with the game of perception. A perceived slowness and lack of substance in the government's public responses have battered investor confidence.
After the recent revelation made by the Wall Street Jorunal, the credibility and integrity of the ruling government was rapidly tarnished.
Whatever Najib's political fate, the Malaysia economy is bound to get much worse than how it fared in the global financial crisis.
Meanwhile , Malaysia's ability to execute the transformation program responsibly becomes more and more questionable.
■
By A.Z., A Concerned Young Malaysian
Original Picture by : https://www.flickr.com/photos/esharkj/
The Week Voice is a column where people share their concerns about the world with our readers. Some feel they do not want to share their real names because they are uncomfortable doing so.
Write to us at theweekvoice@gmail.com with your stories.
