Economists: State of emergency causing crisis of confidence

490
- Advertisement - [resads_adspot id="2"]

Perikatan Nasional’s state of emergency has caused a crisis of confidence that has done little to lift the economy, economists have said.

“Although the government has not given any data, (evidence from) previous emergency orders show that investor and consumer confidence drops during a state of emergency,” said renowned economist Prof Jomo Kwame Sundaram during a press conference in Kuala Lumpur today.

Referring to the first emergency, which was declared during British rule in 1948, Jomo said British investors stopped all investments into Malaya.

Behind every past emergency declaration, including the current state of emergency, there have been “ulterior motives” to further the aims of the government, said Jomo.

Looking back at five past emergencies in Malaysia’s history, he said vested interests had been a primary factor behind their declarations, above any reasons stated by the government.

The first emergency declaration in 1948 against the communist insurgency, Jomo said, was declared by the British to retain then Malaya as its prime colony.

Similarly, he said the British also had an interest to protect its territories when an emergency was declared in 1964 during the confrontation with Indonesia.

Two years later, Jomo said the emergency declared in Sarawak was to remove Stephen Kalong Ningkan as then chief minister.

In 1969, he said that a state of emergency post-May 13 racial riots was declared as, among other reasons, the then coalition failed to secure a majority in Parliament but “through their own ways” gained power.

Lastly, he cited the 1978 emergency in Kelantan, arguing that it was done for BN to reclaim the state government at the time.

“So, what is clear, we can see that in all the emergency declarations, there is an ulterior motive.

“It was a necessary move, but there are other interests,” he said during a press conference hosted by the ‘Tolak Darurat’ committee in Kuala Lumpur today.

Evaluating the Perikatan Nasional government’s Covid-19 prevention measures, including the various movement control orders, Jomo said they had damaged the economy more than the direct impact of the pandemic.

“If we see what is happening now, we find that it is undeniable the Covid-19 pandemic started early last year.

“We find that the direct impact (of the pandemic) on the economy is not as great. But the indirect impact from government’s measures – that was what negatively impacted the economy,” he said.

The current emergency, which began on January 11, has not helped improve the economy as seen by high unemployment, said Jomo.

He said that local and foreign investors were deterred by countries that have emergencies, because there would be no checks and balances.

Malaysia’s unemployment rate jumped 48.8% year-on-year when it registered 5% or 778,000 people out of work in April 2020, after the PN government instituted the first movement control order (MCO) in March last year.

Meanwhile, Economist Prof Nungsari Ahmad Radhi said unemployment is three times higher among people under 24.

“If we add on the under-employed people, the rate is as high as 20%,” said Nungsari.

Former Pakatan Harapan economic adviser, Muhammed Abdul Khalid, said that PN has not used the emergency well.

“It is a lot of missed opportunities. Governments usually use bad times reform, but nothing has been done on the social safety net or income tax reforms,” said Muhammed.

He said the pro-Perikatan supporters were also wrong to compare Malaysia’s state of emergency with previous, or those of other countries.

“While it is true that more than 70 countries have had emergencies too, none of them have suspended Parliament. The checks and balances on the government are still there in other countries,” said Muhammed.

In the context of the 1969 emergency, Muhammed said the National Operations Council led by former prime minister Abdul Razak Hussein was more efficient, inclusive and smaller.

“The NOC only had five to six politicians, led by Razak, and the rest were civil service. However, the NOC was more inclusive and consultative, and what came out was the New Economic Policy and the Rukun Negara.

“Yet, PN’s emergency cabinet contains 70 ministers but has fewer achievements.”

The three economists were speaking on the effects of the emergency on Malaysia’s economy. The press conference was organised by Pakatan Harapan’s Jawatankuasa Tamatkan Darurat chairman Khalid Samad.

PH and civil society have repeatedly accused Prime Minister Muhyiddin Yassin of calling a state of emergency to shore up his weak support and to stop Parliament from meeting in the meantime.

Although Yang di-Pertuan Agong Al-Sultan Abdullah Ri’ayatuddin Al-Mustafa Billah Shah said that Parliament can convene despite the emergency, the government has shown no indication that it will abide by this.

Under the emergency, the government has increased the fines for breaking Covid-19 SOPs, allowed the government to take over any private healthcare facilities, and given itself the authority to use government monies without Parliament scrutiny.