Malaysia Matters Podcast

The top job is seemingly Najib’s to loose. But criticism of the government’s handling of the current economic condition exposes an area where he must be careful. In response to prodding that he should show more leadership, Najib has said that a plan will be unveiled along with the 2009 budget this Tuesday, November 4^th. Simultaneously, he is playing down the impact that economic news from abroad is having on the Malaysian economy. Najib…

…reiterated that Malaysia would not face recession this year and the gross domestic product would remain around five per cent.

He noted that in the last two or three days, the volatile global financial market had seen many countries being affected financially and economically.

“We should be grateful that the pressure on Malaysia is not so bad compared with other countries.”

But Najib needs to be careful. His own government - Badawi himself – recognizes the need to tighten the belt a bit.

A 1.7 billion ringgit (470 million dollar) deal to buy 12 military helicopters from Eurocopter because of the bleak global economy.

“At the moment, we have decided not to purchase the helicopters. We need to delay it … because of the financial crisis. We need to have money,” Prime Minister Abdullah Ahmad Badawi told reporters.

Abdullah’s decision to scrap the deal for the 12 Cougar EC725 helicopters awarded to the European company is one of the government’s first major cost-cutting move as it re-prioritises its budget to cope with the worsening global financial crisis.

“We just cannot be borrowing every time. We need money. The best thing to do now is to reallocate our budget,” said Abdullah, who is also defense minster.

There is much that Najib might get wrong, but still get away with. Mishandling the government reaction to the current economic crisis is not one of them.

Next week’s announcement will be critical.