Idris Jala takes Bloomberg to task over article on Malaysia

Minister in the Prime Minister's Department Datuk Seri Idris Jala has taken Bloomberg to task for a recent article by its columnist, William Pesek.

In an open letter to the business and financial information provider, Idris said Pesek's latest outburst, "Malaysia Gets a Dose of Real Talk", is consistent with series of slanted articles that run down Malaysia and its leadership.

"In the commentary on Bloomberg View, he starts by referring to Malaysia’s underlying economic distress and prolonged slow growth, which he says are caused by race-based policies that strangle innovation, feed cronyism and repel multinational companies.

"The facts, however, are that between 2009 and 2014, Malaysia's Gross National Income grew by 47.7 per cent. Growth last year was six per cent, and over the next four years, the Organisation for Economic Cooperation and Development has predicted that Malaysia would enjoy an annual growth of 5.6 per

cent," he added

Idris said it would be perverse to characterise this as "slow" and by contrast, the Economist reported last month that the European Commission is forecasting growth in 2015 of 1.5 per cent, which would be the eurozone's best outcome since 2011.

"A growth rate nearly four times that of some of the most advanced economies in the world hardly suggests 'distress'," he added.

He also pointed out that Prime Minister Najib Tun Razak launched Malaysia's Economic Transformation Programme in 2010 and highlighted some key achievements, including the fact that in the last five years, annual investment growth had been 2.5 times more than in the preceding years.

"Each year, total investment reached a new record for Malaysia. The bulk of this investment is from the private sector. If the private sector had no confidence in Malaysia as alleged by Pesek, why would they put in record investments year on year under the Najib administration?" he asked.

He went on to say that the country's fiscal reforms are being successfully implemented, cutting Malaysia's fiscal deficit for the past five years, while keeping public debt at only 53 per cent of the gross domestic product.

"This level of public debt is far lower than in many countries, such as the United States,the United Kingdom,France, Japan and Singapore.

"Thirdly, as detailed in the World Bank's Global Economic Prospects Report 2014, Malaysia’s efforts at reducing poverty have been a great success, virtually eliminating absolute poverty to less than one per cent.

"Since 2009, the income of the bottom 40 per cent households has increased by a compound annual growth rate of 12 per cent, even higher than the national average of eight per cent. Inflation has been kept in check at only 2.4 percent and through the implementation of a minimum wage legislation, we have lifted 2.9 million people immediately out of absolute poverty.

"Fourthly, we touched the lives of five million people through rural roads, electricity and water projects. This represents possibly the biggest government expenditure over a five-year period in the history of Malaysia. All these was done in the name of inclusive economic development," he added.

Idris is also Chief Executive Officer of the Performance Management and Delivery Unit (Pemandu).

He went on to give a point for point rebuttal of some of what he termed as the suspiciously negative picture that Pesek had painted.

On the declaration that the ringgit's fluctuations are a decent summary of the country's wayward course in recent years, Idris suggested that the columnist discuss this with Tan Sri Zeti Akhtar Aziz, one of the most

admired central bank governors in the world.

He said she had repeatedly said that the ringgit is undervalued and that when oil prices plummeted, the wrong perception of the degree of dependence of the Malaysian economy on the oil and gas sector, led markets to think that Malaysia would be more affected than others.

"Of course the ringgit is undervalued. It doesn’t reflect our underlying values, which are solid and strong," Idris quoted her as saying recently.

On another point Pesek made that Najib had "deepened the economy's reliance on oil and gas production", he said the International Monetary Fund believed otherwise.

"The headline on its Economic Health Check report this March was, 'Favorable Prospects for Malaysia’s Diversified Economy'," he added.

According to Idris, Pesek’s opinions do not seem to have a strong connection to the facts.

"He gives away his true agenda when writes that Asia-based journalists have missed former prime minister Tun Dr Mahathir Mohamad since he left office in 2003 and suggests a return to old political leadership is urgent.

"It may be that nostalgia for the past and his distance from Malaysia have clouded his judgment, and led him to write an unsubstantiated hatchet job on the current prime minister in order to please Mahathir.

"He certainly seems to have changed his mind about the former prime minister. Only last year, he wrote that the insular and jury-rigged system of affirmative action, national champions and fat subsidies over which Mahathir presided, now holds the economy back," he said.

Idris said Pesek then concluded that Malaysians must find fresh inspiration by looking forward, not back to 1990.

"We agree. Why does he now think we should look back to a system he described in such a derogatory manner last year?," he added.

Idris said Malaysia had undergone an impressive economic transformation under Najib and the country is on course to reach the goal of becoming a high income status nation by 2020.

In a parting shot, Idris said that if Pesek disagreed with any of the above, he might perhaps, want to discuss it with his editors.

"The report was published after all, by none other than Bloomberg," he added.