By Salahuddin Hisham
IT is noticeable that, after Pakatan Harapan announced Tun Dr Mahathir Mohamad as chairman, which is below Datuk Seri Anwar Ibrahim in hierarchy, the weakening ringgit issue viralled over social media and it was blamed on Prime Minister Datuk Seri Najib Razak.
The opposition was taking advantage of the recent weakening of ringgit from the level of 4.25 to the US dollar in June to plus or minus 4.30 in mid-July. It is merely a 500 point medium-term fluctuation.
It will not be a surprise that the slight weakening could be politically manipulated. Maybe, there is another conspiracy theory of a Soros-like attack from abroad at work. However, let’s not indulge in another wild imagination.
If one compares to the rate on January 4 of 4.4985 to the US dollar, it looks to be an approximately 2,000 point rise.
One can safely brush off as mere misleading political propaganda. More so a recent Bloomberg report rated ringgit as the most stable currency in Asia and had appreciated by three per cent to the dollar for the first quarter.
The motivation for such propaganda can only be expected. Before Hari Raya Aidilfitri, the Special Task Force on the Bank Negara Malaysia (BNM) forex trading in the late 80s to the early 90s recommended further investigation through a Royal Commission of Inquiry (RCI).
In his statement, the chairman, Tan Sri Sidek Hasan said there was a prima facie case for it and the losses were more than that disclosed. An RCI with access to documents can do a better job.
The Yang di-Pertuan Agong has consented for RCI to do further probe. The Cabinet approved too. The members of the RCI led by Sidek announced.
One can simply brush it off as a political move to discredit Dr Mahathir. Possibly so.
It could be co-incidental since former BNM assistant governor, Datuk Murad Khalid’s statement on a possible US$10 billion trading loss gained currency early in the year.
The opposition has been making such allegations for years but they have been crying wolf ever so often and on petty matters, if it is not often cooked up political propaganda, that it is hard for the government to take every other allegation of theirs seriously.
However, the conclusion by the Special Task Force cannot be brushed off as politics.
Word from the grapevine is that Anwar who the then Finance Minister, had told it all and the trader himself, Tan Sri Nor Mohamed Yakcop spilled out everything.
Whether there is any truth or not, political pundits are suspecting that this led Dr Mahathir to concede and told a British press that if PH wins, Anwar will be Prime Minister after an interim Prime Minister upon getting pardon from the Agong.
The same reason he is placed under Anwar in the PH organisational structure.
Dr Mahathir has been trying to turn the table around to Najib every time political opinions mentioned he is in a state of panic and desperation. It partly explains the current intensive campaigning by Parti Pribumi Bersatu Malaysia (PPBM) to divert the issue.
There are reasons to believe Dr Mahathir is in a state of panic. The blame for making the decision to allow large-scale gambling of the nation’s treasury may have superseded all lines of authority and led to him.
It came to this writer’s attention that many renowned personalities from the past attempted but failed to bring their concern on forex trading by BNM to Dr Mahathir’s attention. A former BNM governor might have got sacked for being honest and vocal.
The aftermath of the loss has bigger implication. Several months ago, there was news that Murad mentioned that the country’s foreign reserve might have been wiped out. It means that there was no security blanket to cover for months of import without export.
The estimated loss thus far was on average of RM4 billion a year of trading. It means BNM had no system of control and recklessly continued to gamble despite losses piling up! Why and who gave Nor Yakcop such unlimited authority?
Dr Mahathir, Anwar and few others might have lied to the Cabinet, parliament and public on the true situation. They might have manipulated the BNM annual statement of account to hide the true and fair picture of the country’s financial position.
Seldom do the RCI lead to criminal charges but there is always a first time.
The country might have been defenceless to attacks on the ringgit by hedge funds in 1997. Dr Mahathir conveniently made Soros a scapegoat to lay blame.
The currency crisis led to a massive economic crisis and contributed to hardship to the rakyat and country for many years.
Big businesses failed and the banking industry had to be restructured to avert collapse.
There were corporate Bumiputera entrepreneurs developed by Dr Mahathir and Tun Daim Zainuddin to spearhead the development of a Bumiputera industrial and commercial community that crashed along.
That led to loss of jobs and wiped a significant portion of Bumiputera corporate wealth. Most of these corporate personalities could not return and bounce back.
However, there is more to the story as there was systematic dismantling of their empire and their assets sold to other Malaysian businessmen that possibly could be proxies.
For the common folk, it affected the downfall of financial sponsorship and droves of students abroad had to be recalled home.
There was widespread unemployment. Small businesses went belly up. Many became bankrupt.
There was a significant loss in the country’s wealth.
All as a result of someone mesmerised to a new toy of program trading introduced to him and yearned to get even with the market for a major loss earlier for trying to corner a commodity market.
Program trading is for trading in smaller amount and riding on trends. The way BNM was trading it was as if they were trying to be the Hunt Brothers that dominated the silver market at one time.
The market is always right and it has a way of teaching those arrogant ones for not respecting risks. The brothers and BNM, including Malaysia ended with a heavy loss.