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Datuk Abdullah Badawi Must Urgently Address 5 Priority Economic Areas To Overcome The Worsening Financial Position Of Malaysians Speech - DAP Johor State Annual Convention by Lim Guan Eng (Johor Bharu, Sunday): DAP urges Prime Minister Datuk Abdullah Badawi to urgently address 5 priority areas in our nation’s economic performance to overcome the worsening financial position of Malaysians, especially the poor. 1. Rising Fuel Prices First the rising oil prices to US$ 55 a barrel has caused grave concern about inflation and its adverse impact on the poor. The recent 5 cents increase in fuel prices has resulted in transport costs and many goods to rise. DAP acknowledges that at present fuel prices the government’s fuel subsidies would rise to more than RM 12 billion and is inefficient and not sustainable in the long run. However as an oil exporter, Malaysia has much to gain from the rise in fuel prices. The public has a right to know the earnings of Petronas. The refusal to reveal how much Petronas earned or how its earnings are utilized has only given rise to suspicions that Petronas earnings are used to bail out multi-billion ringgit financial scandals. Such bail-outs only benefit the few cronies of BN and not the vast majority of 23 million Malaysians. Unless Petronas can prove how its earnings benefits ordinary Malaysians, DAP believes that Malaysians prefer more direct benefits in terms of lower fuel prices which Petronas can afford to do so on behalf of the government. Petronas contributes more than 20% of the 2005 government projected revenue of RM 99.1 billion. For the year 2005, petroleum is expected to contribute RM 24,123 million to the Government’s revenue.
According to the 2004/2005 Economic Report issued by the Ministry of Finance, the projected export earnings from crude oil and gas in 2005 amounts to RM 34,350 million. This RM 34,350 million is only for export earnings and does not include Petronas earnings from its operations within Malaysia.
Petronas can afford the RM 12 billion in fuel subsidies required to maintain our present fuel prices. Better the money spent on 23 million ordinary Malaysians by providing fuel subsidies than spent on bailing out financial scandals. So long as the government refuses to respect accountability and transparency by revealing how much Petronas is earning and how its profits are utilized for the people, DAP strongly opposes any fuel price increase. 2. Ensuring Malaysians Enjoy The Benefits Of 8% Economic Growth Second, the benefits of our country’s economic growth of 8 % for the second quarter must be distributed and spread to ordinary Malaysians. DAP have received many grouses from businessmen and workers that they do not enjoy any of the 8 % economic growth. In fact some businessmen even question how the economy can be growing by 8% when his business has gone down by more than 20%. DAP does not dispute the economic growth figures but wants the government to realize that such growth is limited to industries and sectors that does not impact on ordinary Malaysians. The 2004/2005 Economic Report issued by the Ministry of Finance in September 2004 states that both the manufacturing and services sectors are expected to contribute nearly 90% of this year’s economic growth. As for the construction sector, with its direct and indirect benefits to the local population, the contribution to economic growth is almost nil. The government should try to assist the construction sector by ensuring that government contracts are spread to the many and not the few contractors. Further, the time has come to open up government contracts to non-bumi contractors. Even opening up 50% of government contracts to open tender system where all bumi and non-bumi contractors can bid would go a long way to help the long-suffering construction industry. 3. Making The Performance Of GLCs Like Telekom And Tenaga Accountable Third the performance of GLCs such as Telekom and Tenaga require a complete review and overhaul. Energy, Water and Communications Minister Datuk Dr Lim Keng Yaik had refused to explain the 90 % drop in both Tenaga and Telekom estimated 2004 return of investment to the government. According to the Ministry of Finance Report Of Estimates of Government's Revenue 2005, Tenaga and Telekom was estimated to contribute RM 74.5 million and RM 98.3 million in 2004 before being revised downwards to only RM 7.2 million and RM 8 million. Such low rates of return is just not acceptable when Telekom has the second largest market capitalisation in the KLSE at RM 35.62 billion and Tenaga has the third largest capitalisation in the KLSE at RM 31.5 billion as at 30.8.2004. On 11 September 2004, it was reported in the Malay Mail that CLSA Ltd, the Asian Investment banking arm of France's Credit Agricole SA, recommended investors buy shares in Tenaga Nasional Bhd and Telekom Malaysia Bhd saying "these organisation have been so badly run that any change will go to the bottom line." In other words, Tenaga and Telekom have been so badly run that things just can not get any more worse. The people have a right to know why Tenaga and Telekom have been so badly managed. 4. Losing Battle Against Corruption
Fourth, Transparency International(TI) Corruption Perception Index 2004 has created shock and disappointment when instead of an improvement, Malaysia’s position deteriorated two places from 37th to 39th as compared to 2003. Malaysia barely passed the corruption test garnering only 5 points out of a score of 10. Negative perceptions about corruption can be seen with the numerous failures or non-completion of billions of ringgit of government projects from the closure of the new RM557.8 million Sultan Ismail Hospital in Johor Baru from fungal infection, the closure of MRR2 Kepong flyover or North-South Highway in Gua Tempurung caused by mudslide, delays in the RM 300 million Matrade building scandal and other construction works. Malaysia’s international image has become a joke when Works Minister Datuk Seri Samy Vellu said that the seriousness of the flaws that cause a new hospital to close down were "normal in big projects and that we cannot blacklist the contractor or there will be no more contractors to hire". This gives the impression that shoddy and irresponsible contractors who do not complete their contracts or compromise on safety and quality is the norm in Malaysia. Failure to take action against the contractor would also give rise to speculation and suspicion as to why the Minister and the government is going out of its way to protect the contractor. Action against wrongdoing must not only be done, it must be seen to be done. These negative perceptions of wrongdoing or corruption must be quickly corrected. Otherwise, not only will public projects amounting billions of ringgit be put at risk but will not serve to encourage foreign investment (as shown below). For Malaysia to remain competitive internationally, it is important that Malaysia is seen as winning the battle against corruption and the Malaysia standing must improve from the present 39th position in the TI’s Corruption Perception Index. 5. Reversing The Progressive Decline Of Foreign Direct Investment(FDI) Finally, Datuk Badawi must arrest the progressive decline in Foreign Direct Investment (FDI) into Malaysia is of grave concern. According the United Nations Conference on Trade and Development or UNCTAD’s 2004 World Investment Report, Malaysia’s FDI inflows declined from US$ 3.2 billion in 2002 to only US$ 2.5 billion in 2003. The top 10 recipients of FDI inflows in developing Asia for 2002 and 2003 were as follows:-
During the same period, Singapore’s FDI doubled to RM 11.4 billion whilst Malaysia’s FDI went down by 22%. As a developing country Malaysia needs FDI to assist in sustaining our economic growth to enable us to realize our Vision 2020 of becoming a developed nation. Except for Kazakhstan, every country’s FDI increased. There is a need to study and find the causes of such a decline so that FDI inflows can increase in 2004 and help to provide jobs, income and earnings opportunities for Malaysians. (24/10/2004) * Lim Guan Eng, DAP Secretary-General |