Press Statement

by Lim Guan Eng

(Petaling Jaya, Wednesday): Datuk Seri Abdullah Ahmad Badawi is spurring a stockmarket frenzy and buying boom in blue chip counters with the first indication in history by a Malaysian Prime Minister that the KLCI might breach 1,350 points. Abdullah said during the Chinese New Year that after hitting a 10-year high of 1, 262.1 points last week, the KLCI might breach the 1,350 mark – which would be the highest in Malaysia's history.

For a Prime Minister to publicly state such a target, it is clear how high the stockmarket will scale and it would not surprising to see Malaysians investing fully in blue chip counters to earn guaranteed quick profits. For investors, there is no risk to invest in the Bursa Malaysia as Abdullah would not only lose his credibility completely if the KLCI does not break 1,350 points, but investors may even claim losses from the Prime Minister should they lose money by taking his stock advice.

Abdullah had based his confidence that the KLCI would break its record on the rise in foreign reserves, the lower deficit, the record RM 46 billion invested by local and foreign investors, national trade volume of RM1,069 billion last year, up 10.5% from the previous year. However such goods news may be an inspiration to the rich and those with cash to invest but not to the many small businessmen and workers.

These small businessmen and workers face financial hardships from rising inflation and costs caused by the refusal of the government to reduce fuel prices in line with the drop of international oil price to less than US$60 per barrel since the beginning of January 1 2007. How can Malaysian workers have money to invest in the stockmarket when many for the first time did not even receive 2006 annual bonuses? How can Abdullah claim that this is an inspiring achievement when there is no sense of well-being amongst Malaysians that business is booming or that pay is rising?

I have received many complaints from ordinary retail businesses that this year's Chinese New Year is worse than last year and many can not understand how the economy can be performing as well as claimed by the government. For workers it is worse as many from multi-national companies and even listed companies failed to pay annual bonuses for the first time in history. Many believe that talk of good economy is just a propaganda exercise to deceive the public in preparation for the coming general elections.

If the Prime Minister is inspired by the performance of the economy, why is it that many Malaysian small businessmen and workers are not equally inspired? According to the Ninth Malaysian Plan (9MP), the mean monthly household income for a Malaysian family was RM 3,249 in 2004. This is misleading as it is doubtful that a Malaysian family would have even a monthly household income of RM 3,249 now.

With the economy performing at such an "inspiring" level in 2006, the mean monthly household income should even be higher. But does every Malaysian family get to enjoy the fruits of the country's economic success equally with a mean monthly household income of more than RM 3,249?

The answer is in the United Nations Human Development Report which consistently list Malaysians as suffering the worst income inequality between the rich and poor in South-East Asia . The 9MP shows the share of income of the bottom 40% of the population declined from 14.5% in 1990 to 13.5% in 2004 whilst the share of the top 20% of the population increased from 50% in 1990 to 51.2% in 2004.

Malaysians want real inspiration in the form of bonuses and real wage increases, not false inspiration of good economic performance that is not shared by all but enjoyed by only the few.