Malaysia seeks lifeline amid storm of scandal and plunging stocks

The 1MDB scandal, without doubt, needs clear answers and a conclusion. The investigators have not come up with anything. Neither have they revealed what they have discovered to date.

The Public Accounts Committee, meanwhile, has put its own probe into the issue on hold after key members were promoted to deputy ministers, making them ineligible to sit on the committee.

But even as this national drama continues to draw public scrutiny, we must not lose sight of another important front – our economy.

Malaysia is being hurt by the collapse of crude oil prices, the flow of funds, plunge of the stock market, devaluation of the yuan, strengthening of the US dollar and the shrinking ringgit. And it doesn’t help that investors now see Malaysia as politically unstable.

At meetings with foreigners overseas, Malaysian businessmen can tell you that they are asked point blank about the 1MDB issue and, most of the time, they can’t really tell much beyond what’s reported in the media.

And because we want to keep the Malaysian flag flying, we have to speak well of this country. But we must remember that investors have plenty of other options for where to put their money. We need to end this political controversy soon and move on.

Yes, we maintained the 2015 economic growth target of 4.5 per cent to 5.5 per cent despite potential external shocks.

Bank Negara governor Zeti Akhtar Aziz has pointed out that economic growth will be anchored by domestic demand and continued expansion across all economic sectors while the external sector is expected to remain resilient.

Domestic demand, which is projected to maintain 6 per cent growth, will continue to drive economic growth, supported by robust private investment and spending.

On the trade side, she said an expected narrowed current account surplus of 2 to 3 per cent of gross national income (GNI) is in line with global rebalancing and structural transformation in the local economy.

But she also spoke of a lower projected current account balance of 21.4 billion ringgit due to low oil prices.

It is obvious now that we have to look at other sources of revenue as crude oil prices continue to drop.

The tourism sector is crucial. The weaker ringgit will help make Malaysia into a cheaper tourist destination.

Even though 2015 was Visit Malaysia Year, we can still put in more resources to ensure its reputation as the ultimate tourist destination for 2016.

For a start, we need to tone down the negative impressions caused by our overzealous theologians and lurid crime cases, which make headline news overseas.

When the Malaysian Philharmonic Orchestra played a concert of rock band Queen’s hits recently, the American singer asked if Malaysians were allowed to sing and dance along. The conservative extremes of Malaysian culture have become a butt of jokes among foreigners, and our neighbours have been quick to capitalise on such perceptions.

Malay authorities need to realise concerts bring in tourism money and are not about promoting “free sex” and gender mixing.

 

Power up the tourist magnet

Tourism Board chairman Wee Choo Keong said “there is no doubt that Malaysia is being outshone in terms of advertising”.

“You only have to turn on the TV to see the campaigns such as ‘Amazing Thailand’ or ‘It’s More Fun in the Philippines’,” he said.

It is thus shocking that rather than raising the tourism-promotion budget, we are actually slashing it by 50 million ringgit, or 25 per cent, this year.

Tourism brings in almost 70 billion ringgit annually, making it Malaysia’s second largest foreign exchange earner and one of the largest contributors to the economy. Some 27.4 million people visited Malaysia last year but the numbers are already dropping.

While neighbours such as Thailand saw a steady flow of visitors from the China, Malaysia recorded a shocking drop of 500,000 Chinese tourists in the first quarter this year, which amounts to a loss in revenues of 1.7-billion ringgit. Yet, unlike our neighbours, we still don’t offer online visa application for the increasingly wealthy and wandering Chinese. 

If the government can draw on the best business brains in Malaysia, not just the academics and bureaucrats, we might find a path through this difficult period. The huge burden cannot be carried by the prime minister and Cabinet alone.

We need to identify key sectors that can drive the economy forward and bring a desperately needed boost to national revenue. Special incentives and stimulus packages need to be announced soon.

Meanwhile, the government can help ordinary Malaysians cope with the cost of living by reducing transport charges, including the price of train tickets. Electricity tariffs should also be cut, in line with the fall in oil prices.

We need our leaders to focus on the economy. Their daily political charade isn’t helping Malaysians put food on the table.