The short-term economic benefits remain questionable and may not lead to the desired "spin-offs" nor the
jump-start which the economy requires and which can only come from recovery of the stock market and of
the ringgit. The economic recovery action plan unveiled by Daim, recently-appointed Special Functions
Minister made all the impact of a damp squid and failed to impress anyone except the government. This has
frustrated Mahathir, Daim and their cronies and led to their further allegations of a foreign conspiracy against
Malaysia. Perhaps they should also consider the possibility that it might be a "conspiracy" only against them
and their cabal and that the rest of the unfortunate Malaysians have just got caught in the cross-fire in this
high stakes game.

Recent stock market gains have also had more to do with government and government-controlled funds
being forced to ramp up the market than any other factor. Confidence has not really returned, in spite of the
currency and share market restrictions imposed by Mahathir.

Even the government’s efforts to raise funds through the issue of bonds by the Asset Management
Corporation were scuttled by rating agencies’ decisions to downgrade Malaysia’s debt instruments to
almost junk bond status (and since the currency restrictions effectively junk). This has left the government
with no choice other than to tap into the National Oil company, PETRONAS’s cash reserves, currently
estimated at RM30 billion. But it is apparent that even this will not be enough and what will then be left for
the rest of the country?

An article in the Singapore Business Times dated 15th June 1998 stated that "some simple arithmetic
suggests that the AMC, which aims to raise RM25 billion, will not be able to absorb even half of total NPLs
(Non-Performing Loans). So far, the NPL ratio has hit 10.6 per cent against 6.7 per cent in December last
year and less than 4 per cent before the regional financial crisis. The latest ratio translates into an absolute
amount of RM44.3 billion, a massive jump of RM16 billion from RM28.3 billion in December 1997. The
ratio could touch 20 per cent next year, translating into almost RM84 billion of NPLs or a staggering 59 per
cent of real GDP.

It is clear, therefore, that Malaysia will have to come up with more drastic measures to rehabilitate the
economy besides the AMC and the other steps implemented so far."

If other people can see this why can’t the Malaysian government, or is it just refusing to acknowledge the
true damage that the country has suffered and will probably continue to suffer as a result of its mind-numbing
bumbling and fumbling? Malaysia seems to have adopted an official stand of outright denial of any real
damage other than that directly caused by the stock market and currency speculators. There is an almost
complete lack of disclosure of collateral damage. If the damage is not recognized, how is it going to be
repaired? This is another question on the minds of many if not most Malaysians.

The denial syndrome is another real and dangerous factor in the Malaysian Dilemma and part of the disease
which Reformasi needs to cure. The truth behind the Bumiputra Malaysia Finance scandal of the 1980’s, the
currency speculation activities of Malaysia’s Central Bank and the "mismanagement" of PERWAJA, the
National Steel Corporation a few years ago, among many other scandals which the government managed to
cover up, leading to collective losses of almost RM25-30 billion of government funds, among others, has to
this day not become known or been satisfactorily explained in view of denials by the government and their
refusal to conduct proper and independent inquiries.
 

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