Crisis and opportunity

New Straits Times Kuala Lumpur

That times of crisis are also times of opportunity has become a well-worn cliche, but in Malaysia's case the point is made that cliches are cliches because they are true.

The World Bank reckons our economy's gross domestic product growth for this year is likely to be around 3.5 percent, and next year's five percent, up from the anemic 0.5 percent recorded in 2001.

But last year's numbers reflected the blood-count of an accident victim, while this year's see the patient bounding out of intensive care and getting back to work.

In its positive evaluation of the Malaysian economy, the World Bank has joined a crowded bandwagon. A quick comparison of forecasts indicates optimism across the board. The government's budget 2003 estimated this year's gross domestic product to be four percent; next year's, 6 percent to 6.5 percent. The Malaysian Institute of Economic Research: Four percent this year; 5.7 percent next. Credit Suisse-First Boston: A somewhat over- optimistic 5.6 percent this year.

ING-Barings: A more cautious 3.5 percent to 4 percent for 2003 -- but their mavens still credit Malaysia along with Thailand, South Korea and China as the only Asian countries with the "resilience" to outperform the region.

These numbers add up to how well Malaysia dealt with the Asian financial crisis of 1997-1998, the ensuing domestic and regional political difficulties, and the past year's global upheavals wrought by international terrorism and the United States- sponsored war against that scourge.

The economic crisis was taken as an opportunity to shake out mismanaged corporations and deal with indebtedness. The inept and crooked have been discharged, and a premium attached to sobriety, propriety and competence on the part of their successors.

Deficit financing was a key component of the recovery scheme worked out by Malaysia's economic policymakers and money managers, along with a ringgit pegged below its rational market value.

Sneered at by some as "pumppriming" or "spending ourselves out of recession", the measures have worked no less effectively, as the World Bank now acknowledges. The total public debt, at more than 70 percent of GDP as at end-2001, is high but manageable. Unemployment remains by-and-large limited to the unemployable; inflation remains under two percent; the trade surplus remains hale and hearty.

This year will be seen as the year of recovery. At this rate, next year should see the Malaysian economy firmly back where it belongs: Leading the region in clear-sighted, sound policies for prosperity.