2	2	Malaysia PM, Najib Abdul Razak, 6-9, GDP blunder

SIX OR NINE? It must have been the most awkward moment for Malaysian Prime Minister-cum-Finance Minister Najib Abdul Razak yesterday. He was made to look stupid on the rudiments of economics: The GDP growth rate.

Worse, he made the blunder at a congregation of knowledge workers who assembled for the MSC Malaysia Implementation Council meeting. When all faces blushed, multimedia took over to spread the big snafu that the PM's speech-writers probably made, far and wide.

The case in hand was that, in earnest political posturing for a high-income generation that needed prime-pumping of enhanced per capita income in a short span, the PM boasted that Malaysia's annual GDP growth would be sustained at 9 per cent year-on-year until 2020.

Nine per cent? I thought that was close to impossible because Malaysia had been tracking at 6.5 per cent when neighbouring economies were advancing at close to 10 percent during boom time in the last two years.

Nonetheless, SMS-bound news alerts were swiftly disseminated by pro-government media, and I received mine through The Star.

Hours later came the turnaround. A new batch of news alerts were transmitted to SMS subscribers. The PM was forced to revise downwards his target of annual GDP growth to 6 percent.

By then, digital records were adequately archived by the country's major news providers like The Star and national news agency Bernama. All had quoted the PM's blunder in pronouncing a 9 per cent GDP growth. It was so unrealistic a target that even senior editors at the newsroom business desks and government economic planners couldn't reconcile.

Subsequently, PM Najib saw it pertinent to call an immediate press conference within hours of his speech earlier in the day to correct the errata. He was made to eat his words and reiterated that his government’s target was actually 6 per cent annual GDP growth. Quote:

“I didn't say nine per cent, I said around six per cent as nine is not realistic. We have to achieve six per cent as we have to be realistic to achieve a higher growth rate when the economy has really recovered.

“We have not fully recovered from the recession. As you know, our economy depends on the export market. I'm not talking about achieving it now, I'm talking about post-recession," Najib told reporters.

It was as recently as October 23, when the PM delivered his maiden budget speech in the Parliament, that Malaysians were told to brace for further tardiness of the economy as growth rate would still shrink 3 per cent this year. And that growth in 2010 would only be expected to recover to 2-3 percent, at best. While there had been no miracle turnaround in recent months, it was believed that the impact of the global economic downturn would still be heading to uncertain waters.

Even at 6 percent growth, there was no denying that Najib's government had to redouble its efforts, besides identifying new growth areas from now until 2020 in order to make Malaysia a developed nation as envisioned by former prime minister Dr Mahathir Mohamad in 1995.

In absolute terms, Malaysia needs to more than double its gross national income from US$7,000 (RM24,500) to at least US$17,000 by 2020 in order to qualify as a high-income nation according to World Bank classification.

However, the latest World Bank projections indicated that Malaysia’s near-term outlook continued to track at a slow recovery rate. The World Bank projected Malaysia's GDP growth to contract 2.3 per cent this year, and grow by 4.1 per cent in 2010.