Anwar said the country was losing its competitiveness. — File pic
PETALING JAYA, Feb 19 — Malaysia’s 7.2 per cent economic growth last year was outperformed by its neighbours, Datuk Seri Anwar Ibrahim pointed out today while stressing that the country was losing its competitiveness and public debt was ballooning.
Although the 2010 economic growth had topped government expectations of a 6 per cent gross domestic product (GDP) growth, the opposition leader said the increase should “not be viewed in a vacuum” and noted that Singapore and Indonesia had registered growth of 14.5 per cent and 6.1 per cent respectively.
“Both outperformed Malaysia’s growth by miles especially considering that Indonesia’s 6.1 per cent growth was calculated on a higher base as Indonesia did not face economic contraction in 2009 unlike Malaysia or Singapore,” Anwar said in a statement released today.
“This is yet another proof that our economy is sliding downwards relative to our neighbours. We are losing our competitiveness and our fiscal position is in a lot worse shape compared to the neighbours,” he said, referring to the public debt of RM407 billion, or 53 per cent of GDP.
The Malaysian economy is now roughly the same size as Singapore’s at US$239.96 billion (RM728.62 billion) compared to US$239.33 billion.
The resource-rich nation was largely saved the blushes of being surpassed by the tiny city state in 2010 by the strength of the ringgit versus the US dollar when it appreciated by about 12 per cent over the last 12 months, the most of any Asian currency except for the Japanese yen.
Singapore’s growth has seen it catch up and now threaten to displace Malaysia from its long-held position as the third-most valuable economy in the region behind Indonesia and Thailand.
Anwar said Singapore achieved its double-digit growth on the back of a strong rebound in manufacturing sector which recorded growth of 29.7 per cent while Malaysia only saw an 11.4 per cent increase in manufacturing.
“The reality is our manufacturing products are steadily losing their competitiveness in the global market as we are relegated to the lower rung of the value chain while competitors like Singapore upgrade higher and higher on the value chain,” the former deputy prime minister said.
He also said that Indonesia’s “sterling performance” came after it avoided recession in 2009 whereas Malaysia had experienced a 1.7 per cent dip.
The Permatang Pauh MP added that Indonesia had achieved this despite moderate government spending, with a fiscal deficit of 1.1 per cent in 2010 and public debt standing at 28.3 per cent of GDP.
Malaysia, on the other hand, has seen the federal debt rise to 53.1 per cent of GDP after the budget deficit hit 7 per cent in 2009 and 5.6 per cent last year.
“The stagnation in private investments had caused the government to rely on pump priming to fuel economic growth so much so that fiscal deficit remains one of the biggest economic problems the country is facing,” said the former finance minister, referring to Malaysia’s US$7 billion worth of foreign direct investment in 2010 compared to Singapore’s US$37.4 billion.
Anwar further cited the contractions in the crucial sectors of mining and agricultural of 1.3 and 4.3 per cent in the fourth quarter of 2010, which resulted in an annual growth of just 0.2 and 1.7 per cent respectively as a “symptom of stagnation plaguing the economy.”
He called on Prime Minister Datuk Seri Najib Razak to recognise that “no amount of glossing and public relations campaigns can confuse the public of the urgent need to institute vital economic reforms to reverse the slide.”
He said “economic reforms can only be effective if complimented by an equally strong set of political reforms.”
No comments:
Post a Comment