You Know, When You Know It. What Was Najib Have Done, Will Be Effect Tomorrow.

I never liked Najib. I blamed him for the results of the 1987 UMNO elections which led to Mahathir tightening his iron grip on the country. Then in 2009, he was Mahathir’s handpicked candidate to replace Abdullah Ahmad Badawi who was beginning to introduce some much needed reforms to the country after 22 years of mismanagement, cronyism, corruption and authoritarianism. I expected a return to the same old but I was wrong.

If there was one thing I learnt from 25 years in the financial markets, it was if you make a mistake, admit it, cut your losses and relook at it again from a fresh perspective and with a clearer mind, hanging on dogmatically to mistakes can be very costly, it can wipe you out. And that was exactly what I did wrt to Najib and I started to like what I saw.

In the aftermath of the Lehman triggered World Financial Crisis, almost every country resorted to printing new money, disguised as Quantitative Easing, to stimulate their economies and mostly to not much effect except to create bubbles in the real estate and financial assets even as real incomes was stagnating or even falling. Malaysia was one of the very few countries which used a combination of monetary but more fiscal stimulus to resuscitate the economy and the results showed in that we have consistently grew between an annualized 4% to 7% for every quarter since then or what economists would call sustainable growth in line with our long term potential.

But there is one hitch with fiscal stimulus; it is populist and it is addictive. If you are not careful, you go the Greek or Venezuelan way. This is why no matter how bad the economy is, Singapore would never touch its reserves because for a country of their size, they have very little leverage left once they did that In fact the whole idea of an elected Presidency was to make sure the President stop any PM who tries to do it. Countries and leaders which resorted to it usually failed to get out of it but not Malaysia, not Najib. As soon as the economy stabilized, he started setting targets and limits on National debts and Budget deficits. Such discipline is indeed rare in leaders of democratic countries having to face elections every now and then especially someone like Najib, whose political life must have been hanging by the thread.

But Najib did not stop there. He started introducing his GTP to improve on civil service efficiency and delivery and the ETP to diversify the economy, strike a balance between public and private sector, undo the cronyism of yesteryears and prepare the country for a knowledge based economy. To this end he even removed the ISA despite the potential landmines that he had to face because in a knowledge based economy, there must be a balance between information flow and political expediency.

Internationally, he reached out to our neighbors and Western and Eastern powers alike and attracted truckloads of FDI not because we kowtow to them but precisely because of our neutrality and our attractiveness as a place to invest in both in terms of regulatory expediency and infrastructural developments. Most importantly, they know they are welcome here.

I remember that last year, when the RM first breached the psychologically important 3.80 and then 4.00, many people messaged me and asked what should or can the government do and my reply was nothing…..the government has done everything that needed to be done, the introduction of GST and the removal of subsidies being two of them. For the first time in our history, we have successfully anticipated and prepared for problems even before they occur rather than react to them after they have occurred, which is often too late.

I told these people the headlines will not make for good reading, damning even so just ignore them. Bottomline is your lives will be little affected and I think that has held true so far, kudos to Najib and his team at the MOF.

To all the people who call themselves financial journalists, economists, analysts, rating agencies etc, I have this message. If oil price is a test, then thanks to Najib, Malaysia has passed it with flying colors. All our internal and external balances have remained largely stable DESPITE falling oil prices and we have outdone many oil importing countries in terms of growth. Think about what we can potentially achieve if oil prices start going back up.

Stop thinking and telling us that we will fail just because you guys think the test is a difficult one for us and stop giving us low marks just because you think oil price is currently not one of our favorite subjects when we have clearly outdone some of your supposedly brighter students.

I think whatever happens next, it is only fair that Malaysians give Najib enough time to complete what he set out to do and then judge him from there.

As for me, I believe he is already Malaysia’s best PM ever and that history will be kind to him.

Daniel Goh

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