 | Email this article |
 | Print article |
 | Feedback |
(KUALA LUMPUR) Malaysia's economy will suffer and the country will break up if racial unity collapses, Deputy Prime Minister Najib Razak warned ahead of a key by-election.
 |
| Mr Najib: If there was no political stability, foreign investors would leave |
'No unity means no political stability. No political stability means we are all in trouble,' he was quoted as saying by Bernama news agency late on Saturday. 'The Malays (will be) in trouble, the Chinese (will be) in trouble, the Indians (will) also be in trouble,' he told a rally.
Mr Najib said that foreign investors would pull out their funds if there was political instability. 'Capital can shift in a blink of an eye. Capital knows no loyalty. If our economy is under pressure, funds will flow (out). That is how sensitive capital movement is in the context of a modern global economy,' he said.
The ruling National Front coalition, led by the dominant United Malays National Organisation (Umno), is contesting a critical by-election that will test its popularity since disastrous losses in national polls last year.
Mr Najib, who is Umno deputy president, is leading the charge for the Jan 17 vote in north-eastern Terengganu state.
Recently, there have been growing fears over 'Islamisation' of Malaysia and the increasing polarisation of the three main ethnic communities.
About 60 per cent of Malaysia's 27 million people are ethnic Malay Muslims. The country's minority Chinese and Indians are mostly Buddhists, Hindus or Christians. Issues related to religion, language and race are sensitive matters in Malaysia, which witnessed deadly riots in 1969.
Malaysia is already tipped for slower growth of up to 3.5 per cent for 2009, well down on earlier projections as the global crisis bites into export demand and foreign direct investment inflows.
Mr Najib urged voters to return the Kuala Terengganu seat to Umno to ensure racial unity and economic growth. 'If we do not make the right decision, our country can disintegrate and we will never be able to pass on this strong Malaysia to our next generation,' he said.
Meanwhile, Junior Finance Minister Nor Mohamed said that Malaysia will not slip into a recession this year. He also urged the nation's banks to keep offering loans to small and mid-sized businesses to maintain private sector confidence, news reports said yesterday.
The impact of the global financial downturn will be softened by government measures, including a plan to inject RM7 billion (S$2.9 billion) into the economy, Mr Nor Mohamed was quoted as saying. 'The Malaysian economy is still strong although many big countries are experiencing a recession and economic contraction,' he said, according to The Star newspaper.
Mr Nor Mohamed's aides and other ministry officials could not immediately be contacted.
Government authorities have forecast that Malaysia's economy will expand by 3.5 per cent in 2009, but some economists have warned that growth could fall below 2 per cent.
Mr Nor Mohamed stressed that banks must play their part to maintain private sector confidence, saying that his ministry has received complaints that some financial institutions were rejecting viable loan applications.
'Banks and financial institutions have been warned not to be tight-fisted when giving out loans to small and medium-scale enterprises,' Mr Nor Mohamed was quoted as saying.
In another development, an academic said that the Malaysian economy could rebound from the current slowdown within the next three to six months with the support of the government and sound policies.
Danny Quah, head of department and professor of economics at the London School of Economics and Political Science (LSE), said that Mr Najib had the ability to take Malaysia into the next stage of its economic development.
'The government should not be too obsessed with budget deficits. It is important to develop policies that can increase the country's competitiveness in order to sustain economic growth and momentum,' he said during a dinner talk of the LSE Alumni Association of Malaysia on Saturday. -- AFP, AP, Bernama
No comments:
Post a Comment