Financial Turmoil

My former Prime Minister write : Rapid Permanent


1. The world is going through financial turmoil but most Malaysian politicians especially those in the Government seem blissfully unaware or unconcerned. Already 10 major banks in America have collapsed. The almighty US Dollar has depreciated. Now the huge insurance corporation, the American International Group is on the verge of bankruptcy.

2. In the last three quarters AIG lost US$18.5 billion dollars (68 billion Ringgit). AIG is struggling to raise funds to overcome its difficulties. If it fails it may have to opt for bankruptcy. But AIG is going to lose even more.

3. The failures are all due to playing with money, selling mortgages, selling papers and all kinds of financial dealings which have been invented by the finance houses in order to make huge sums of money out of nothing. Currency trading is one of them.

4. I am not a financial expert but I see trouble coming our way. Our currency should be appreciating against the cheaper US Dollar. But instead it is depreciating. This must be caused by weaknesses in our economy.

5. Despite Government propaganda through the controlled media that we are doing well, the reality is otherwise. The foreign investors, including Arabs came, and the reports claim that hundreds of millions of Ringgit in investment would be coming in, but there is no sign that the investors are actually investing. In fact I hear in the IT sector a proposed 600 million Ringgit investment has been withdrawn.

6. Apart from Arabs buying up new skyscrapers there is no sign that investments are really coming in.

7. I talked to potential investors and they told me they would not be investing and they are pulling out from the Malaysian stock market. The KLSE figures show how much market capital has disappeared. I am told that it is more than 100 billion Ringgit.

8. In the meantime the prices of oil and foodstuff are high and may go higher. But incomes are not increasing. In other words we are experiencing inflation. When the American financial crisis really hits us we may not be able to handle it.

9. Dato Seri Najib Tun Razak's appointment as Minister of Finance has come at a crucial time. I pray and hope he will be able to handle the impending crisis. If he fails then he will have to take the blame. Dato Seri Abdullah is now only involved in social issues, reform (of what?) and Islam Hadari. Appropriately he has taken over the Ministry of Defence.

10. We are in for a very interesting time. The PM should read carefully SAPP President Yong Teck Lee's press statement. But I don't think he would. He is reputed to have told Malaysian diplomats undergoing training that if they are asked critical questions they should "buat bodoh" i.e. pretend to be stupid. I believe that is precisely what Abdullah would do to Yong's statement.

PS

1. I read this morning that the Federal Reserve Bank will loan to AIG US$85 billion to prevent it from going into bankruptcy.

Malay Unity

Partial from My Former Prime Minister

1. Malaysia has a multi-racial population but is quite unique in that the division is not just by race alone but by religion, language, culture and economic situation. Unity in such a diversity is extremely difficult to achieve.

2. If we study other nations where people of different ethnic groups have immigrated, we will find that integration and unity depended on several important factors. Firstly the indigenous people or the people who had set up the country make up at least initially, a very big proportion of the population. Additionally they would be dominant and materially successful. The small numbers of immigrants trickling in found it judicious and beneficial to be identified with the numerically superior and powerful dominant inhabitants. They would willingly forget their original languages and adopt the language of the people of the country as well as their culture; they would intermarry and over time they would be totally absorbed and assimilated and identified with the indigenous people. In such a situation unity is not a problem. The United States is one such country where the original language and basic culture of first settlers are accepted by later immigrants.

3. In the old days before the coming of the Europeans the few Chinese and Indians who settled in Malacca adopted the language and much of the culture of the Malays. Though there was no assimilation nevertheless good relations existed between the immigrant settlers and the Malays. Unfortunately when later the China-born Chinese-speaking immigrants dominated in numbers as well as economic wealth, the Malay speaking Baba and Nyonya deliberately dropped their Malay language and Baba culture and reverted to being Chinese in every way possible.

4. Difficulties in assimilation arise when the late comers are more dynamic and better equipped to progress than the indigenous people. A feeling of superiority towards the indigenous people tended to keep the late-comers apart. As their community grew they established separate enclaves and erect invisible barriers against the indigenous. As their numbers grew the separation became deeper.

5. The British are only partly responsible for the separation of the races in Malaysia, for keeping the Malays in the rural areas, the Chinese in the urban areas and the Indians in the estates. The different races are also responsible. They made no attempt to mix together as a matter of preference.