SHAH ALAM 29th AUGUST: The 1997-98 Asian Financial Crisis will repeat itself if the Federal Government does not take a more proactive step in addressing the current crisis sooner.
PKR Strategy Director, Rafizi Ramli said that the government should improve the country’s debt payment mechanism that has reached a critical stage.
This alarming situation will lead the country to difficulties when the global economy fails to achieve a robust growth.
“If there’s a disruption in the world’s cash flow and the world economy, the government will lose every option in solving the problem,” he said when contacted by TVSelangor.
According to Rafizi, investors will start bailing out and withdrawing money out of the country when they lose confidence in the government’s economic direction.
“This situation has a lot in common with the 1997 economy crisis,” he said.
He expressed his concerns that the country’s current economy climate is very worrying because Malaysia was badly affected during the global economic downturn, unlike Indonesia.
“The trouble with Malaysia is that the UMNO-BN government is very extravagant. There are a lot of unchecked briberies with projects that involve commissions,” he said.
Rafizi said, the government should not squander away their spending to avoid any loans that could add to the national debt.
“We need to start with an all-out war against corruption so that we can reduce waste,” he said.
Previously, the ringgit had dropped to more than 7.0 percent this year, lower than the past three years compared to 3.3 per dollar. It was the worst record amongst other Asian countries.
Bank Negara has also revised the growth forecast for the rest of 2013 from between 5.0 percent and 6.0 percent to between 4.5 and 5.0 percent.
World credit rating agency, Fitch Ratings, recently placed Malaysia in a negative position. Fitch Ratings also questioned the government’s move that seemed to disregard financial reformations.