By Parliamentary Opposition Leader, DAP Secretary-General and MP for Kota Melaka, Lim Kit Siang, in Malacca on Wednesday, 29th January 1986:
Malaysia’s economic growth rate this year may be only half or even less than that predicted by Finance Minister in his 1986 Budget
Deputy Finance Minister, Datuk Sabarudin CiK, said yesterday that the government may have to revise Malaysia’s projected growth rate target for this year. The Finance Minister, Daim Zainuddin, in his 1986 Budget presented to Dewan Rakyat on Oct. 25 forecast Malaysia’s economic growth rats in 1986 to be 6 per cent.
In fact, even government or government-controlled institutions do not believe in the 6% economic growth rate for 1986 as feasible. On the day the Finance Minister presented his budget and made his forecast of 6% economic growth rate, the London Tin Market had just collapsed, and remain closed today after over three long months.
In November Malayan Banking, whose previous chairman was tapped by the Government to become Bank Negara Governor, itself forecast a 5 per cent growth for next year.
But world and local economicsts were generally skeptical about the government’s 5 per cent growth rate forecast, and expect the rate to be from 3 to 4 per cent. The events in the past three months since the 1986 Budget have borne out the skepticism of the critics of the 6% growth rate forecast, for the economic situation had deepened into greater gloom.
The government had wanted to rely on increased oil production to boast the country’s income and growth rate, disregarding the government’s earlier against reckless depletion of our petroleum resources. But this is unlikely to be of much, as the government’s forecast of the price of oil at US$26 had already been proved over-optimistic before the first month of 1986 was over.
There is now a growing fear that the world oil price may not only fall below US$20 per barrel, but of it crashing down to US$15 or even $10 per barrel!
Together with the poor prices for other commodities, the stock market and financial crisis, Malaysia’s economic this year may be only half of the 6% growth rate forecast by the government, or even less, i.e. 3 per cent of less.
At this critical moment of our economic crisis, it is vital that the government give priority to regaining the confidence of the people, and not to pursue policies or implement measures which further undermine public confidence in the government. For instance, the rufusal of the government to honour its pledge to make public the BMF final report would bring the ‘crisis of confidence’ in the government to a new climax. Similarly, the reckless implementation of the NEP policy of quotas and percentages, as in the stocks and shares issue raising the 30% bumiputera quota to 51% and 70% and higher can do the campaign to regain public confidence in government no good whatsoever.