EAC must not fail

  • The Bowerbird Writes
  • Monday, 18 Feb 2019

THE Economic Action Council (EAC) was set up out of necessity, and not because the ministers are incompetent. On this matter, Prime Minister Tun Dr Mahathir Mohamad had to publicly counter the views of his no-nonsense media and communication adviser Datuk A. Kadir Jasin.

Kadir dropped a bombshell in his blog when he argued that the move to set up the EAC could be due to the Cabinet’s inability to handle issues pertaining to the economy.

Many people agree with Kadir though. And the debate will rage on at least for a while. Kadir’s points in the blog post are taken seriously by some while others have labelled it as nothing more than a veteran journalist venting his frustration.

But under current circumstances, when ministers are being scrutinised as never before for their actions (and inaction), even the setting up of a necessary outfit such as EAC is hotly debated.

When the National Economic Action Council (NEAC) was esta­blished in January 1998 – definitely out of necessity – there was no discussion about the incompetence of ministers.

It was a timely and audacious move to manage the worst economic crisis in the country’s history.

There was an economic meltdown in the region. The Malaysian economy was heading towards inflation. Companies were going bankrupt and were defaulting on their bank loans.

Indonesia, South Korea and Thailand were in turmoil. The Asian Contagion, as it was called, affected almost all countries. Only the seve­rity differed. The social fabric of some countries were torn apart. In the case of Indonesia, the people rose to oust its strong man, Suharto.

Malaysia simply couldn’t swallow whole the International Monetary Fund’s formula or even the World Bank’s medicine. We did it our way, the Tun Mahathir Way. It was a different approach in many ways against the wisdom of well-schooled economists and financial gurus at the time.

The setting up of NEAC was the right move. It was bitter medicine for us, but it worked.

Perhaps the world can learn a thing or two from how we managed an economic catastrophe. It ought to be part of case studies on how not to listen to old wisdom when tackling economic crises.

And there is indeed wisdom of the crowd, as proven in a council where many heads are better than one, with a contrarian leading the way.

Now, it is Act II. The EAC is created in a different era. Things are different now than they were 21 years ago. However, the principle is the same – to drive the economy forward.

We are not in such a dire situation as we were two decades ago. But the economic management needs rethinking. It can’t be business as usual.

This time, we are not facing the threat of currency tra­ders or the nefarious intent of speculators on the global market. This time, the issues are of our own ma­king.

Last year, the people decided to oust the previous regime. For better or worse, we have to make adjustments. But the people expect miracles, which is understandable. The Pakatan Harapan government pro­mised a lot and the people are holding the coalition to those promises.

It is about bread-and-butter issues that matter most – cost of li­ving, unemployment and home ownership. To put it bluntly, it is the economy, stupid! And the welfare of the people.

The key is to get the economy back on track. Businesses need assurance. The government must lead. The habit of finding fault with the previous government has to end. People have had enough of that. It is time to move on.

And the government must set an example. It must lead and the private sector will follow. It is also about signalling the confidence the government has in dealing with the current situation.

Government spending is key to the revival of any economy. We have seen that happen before. Mega infrastructure projects helped usher the country out of recession in the 1980s. In short, we need government spending to boost the economy. That is common sense. You don’t need to be an economist to know that.

There have been criticism about the composition of the EAC, among others, the fact that there is not much representation from the business community. And also the lack of young faces.

The NEAC was made up of politicians, business leaders, trade unionists and think tank heads. But it was the smaller advisory committee within the council that really did the work, meeting at least three hours a day with the PM.

We can have a council with a bigger composition, representing every segment of society, but eventually someone has to do the real work.

Perhaps the EAC would include others in its working committees. Or it certainly would welcome proposals and ideas along the way.

What is important is for the council to get cracking on ensuring that the people’s decision in May 2018 was the right one. And to prove, in part, that Kadir is wrong!

Johan Jaaffar was a journalist, editor and for some years, chairman of a media company, and is passionate about all things literature and the arts. The views expressed here are entirely his own.

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