Najib sets up emergency panel to tackle economic woes

Malaysian Prime Minister Najib Razak has set up an emergency economic committee to tackle the country's free-falling currency and investor flight.
Malaysian Prime Minister Najib Razak has set up an emergency economic committee to tackle the country's free-falling currency and investor flight.PHOTO: AFP

Committee, which includes PM's brother, to form plans for Malaysia's continued growth

Malaysian Prime Minister Najib Razak has set up an emergency economic committee to tackle the country's free-falling currency and investor flight.

The 10-member Special Economic Committee (JKE), to be chaired by Economic Planning Minister Abdul Wahid Omar, will weigh up immediate and medium-term plans to strengthen Malaysia's fundamentals, Datuk Seri Najib said in a statement yesterday.

He has included his younger brother, CIMB banking group chairman Nazir Razak, on the panel.

Datuk Seri Nazir has been critical of 1Malaysia Development Berhad (1MDB), the debt-laden state investor whose chief adviser is the Prime Minister. Other members include sovereign fund Khazanah Nasional's managing director Azman Mokhtar; Maybank chief executive Farid Alias; group chief executive of ratings agency RAM Holdings, Dr K. Govindan; and National University of Malaysia vice-chancellor Noor Azlan Ghazali.

"The decision to form the JKE is based on the government's need to develop and implement immediate and medium-term strategies and action plans to ensure Malaysia continues to grow," Mr Najib said.

The JKE, which will start work next week, is expected to meet every week on issues such as the value of the ringgit, financial market stability and investor confidence. It reports directly to Mr Najib.

The ringgit - Asia's worst-performing currency this year - fell to its lowest levels in 17 years this week. It closed yesterday at 4.25 to the US dollar and 3.03 to the Singdollar.

The net outflow of foreign funds from Malaysian equities this year stood at RM14.7 billion (S$4.9 billion) as of Tuesday, more than double the RM6.9 billion for the whole of last year.

Mr Najib has come under increasing pressure after reports said US$700 million (S$981 million) in political funding was deposited into his personal bank accounts.

Mr Nazir has been speaking out on issues this year, singling out 1MDB's management for stinging criticism over what he said was a lack of accountability in the RM42 billion debt it racked up in just five years of operations. Two weeks ago, he posted on his Instagram account that it is a "terrible time to be distracted by politics and so much negative international media coverage. Our best, most credible & crisis experienced finance team needs to be put in front of markets urgently".

Allegations of misappropriation of funds linked to 1MDB have led to calls for Mr Najib to step down, but he denies any abuse of state funds.

A version of this article appeared in the print edition of The Straits Times on August 27, 2015, with the headline 'Najib sets up emergency panel to tackle economic woes'. Print Edition | Subscribe