KUALA LUMPUR, Feb 26 — Datuk Seri Anwar Ibrahim (picture) said today that prime minister Datuk Seri Najib Razak is “premature” in declaring the worst is over after the economy grew by 4.5 per cent for the fourth quarter of 2009.
The Opposition Leader and former Finance Minister said that the announcement is “irresponsible” because the growth is largely a result of pump priming and the government’s stimulus package spending.
“The latest declaration by the Prime Minister that the worst is over when the country’s GDP grew at 4.5 per cent in the last quarter of 2009 is not only premature but irresponsible.
“It is clear that the supposedly stronger growth was due to the massive pump priming by the government over the last year. Propping up the sagging economy is at best a stop gap measure. Pump priming by definition cannot be permanent. I am deeply concerned that the continuous reliance on massive spending will take us down the road to economic serfdom. And that may not be too distant in the future.
“Since 1998, the Barisan Nasional government has implemented only one economic policy ie increasing public expenditure (most of the time unnecessarily through massive projects that were subjected to leakages and inflated costs) to make up for the dramatic decrease in private spending.,” he said in a press statement.
Najib had acknowledged that the positive growth in Q4 was helped largely by the government’s push to pump some RM1 billion a month into the economy which resulted in the country’s economic performance faring better than expected.
“Over 113,000 projects under the two stimulus packages have and are being implemented, involving a total value of RM17 billion. Out of that, the government has made a payment of RM13.9 billion. Therefore on average, the government has pumped approximately RM1 billion per month into the market from January 2009,” said Najib last week when announcing the country economic performance for 2009.
Najib had set a target for his administration of growing the economy this year by five per cent which he said could be achieved barring unforeseen circumstances.
However Anwar said today that the five per cent growth prediction is “disingenuous” as the country is still lagging behind in the region.
“Trumpeting a 5 per cent growth for 2010 is disingenuous at best. What the Prime Minister does not say to the people is that even if our economy grows by 5 per cent, Malaysia will continue to fall behind Korea, Singapore, Taiwan, Indonesia, Thailand, Philippines and even Vietnam in 2010.
“The latest economic forecast by IMF published in October 2009 shows that in 2010, Malaysia is expected to perform the worst among all these countries even as the world economy shows signs of recovery. Vietnam is expected to double our growth rate while the rest will outpace Malaysia by an average of 50 per cent,” he said.
Anwar also stressed that private investment had dropped significantly in the past decade to contribute only 28 per cent of the country’s GDP.
“The data on private investment trending since 1991 should serve as a reminder of the path to economic damnation that BN has dragged us into. While private investments grew at the compound annual growth rate of 16.2 per cent between 1991 and 1997, this has dropped severely to a marginal growth of 1 per cent between 1998 and 2008.
“Translating this into private investments in real terms, between 2005 and 2008, private investments into our economy stagnated at RM20.3 billion each year. This is even lower than the private investments figure in 1991, nearly 20 years ago.
“While Barisan Nasional remains clueless about rejuvenating the economy for the long term, private investments have plunged from the pre-1997 days when it constituted 40 per cent of the gross domestic products (in real terms), to an average of 28 per cent in the last decade,” he said.
Anwar said that the current economic stagnation is due to Barisan Nasional’s “mismanagement and corruption.”
“The Barisan Nasional government must own up to the fact that our economy is the way it is because of the years of mismanagement and corruption perpetrated by the powers that be.
“The future wealth of our country can only be guaranteed by a government that is accountable to the people where transparency and good governance are absolutely essential. That is why Pakatan Rakyat will remain relentless in the pursuit to offer the people an efficiently managed economy that will sustain the livelihood of future generations,” he said.
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