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Star : THE financial crisis affecting developing countries arrived in full-scale fashion in our region last week when the Indonesian economy experienced shocks reminiscent of the Asian crisis 20 years ago.

TEH : Refering to the drop in Rupiah, is it? We shall see if contagion ... started in Argentina and Turkey ... then India's Rupee and S.Africa? Where else? Yes, Asian financial crisis started from the attacking of Baht ... and hit our MYR badly and eventually, our KLSE. Greatest crash in KLSE which I will never be able to witness in my life time.

Star : With the crisis coming so close to home, it is time to contemplate what may unfold in the near future and list measures to respond to each scenario, so that we are not taken by surprise.

TEH : I have listed what-to-do since 2016 ... preparing for crisis, if any. With this report out, means ... we are NOT in crisis yet. Media almost always get things wrong, anyway. NEVER read media and believe what was written on surface-level.

Star : The agreement reached with Singa­pore to postpone construction of the Kuala Lumpur-Singapore high-speed rail (HSR) project until end-May 2020 (with Malaysia paying S$15mil [RM45.1mil] in cost) was an achievement. It allows us a gap of two years before having to meet the mega project's large expenses.

TEH : Agreed with the postponement too.

Star : The next couple of years will be crucial, as the country will be in the midst of managing the "perfect storm" of servicing the trillion-ringgit government debt and preventing the government deficit from ballooning, while facing the challenges of the emerging global financial crisis.

In this tight situation, every billion ringgit counts; indeed every single ringgit counts.

TEH : Save as much ... every ringgit counts, indeed. For you and me ...

Star : As more discoveries are made of missing money, whether due to the 1MDB scandal or unpaid tax refunds, there is increasing pressure to save money and cut costs to avoid wider deficits.

So the HSR's two-year deferment helps a lot. It may be like kicking the can down the street, but hopefully, the situation will improve by the end of the two years to allow the can to be picked up, especially if during the period, ways are found to cut the overall cost of the project.

Other projects too have to be scrutinised. Besides the East Coast Rail Link and Trans Sabah gas pipeline projects, there are many other projects whose costs have to be examined, and whose implementation can be postponed or cancelled.

Besides the scourge of overpricing and kickbacks, there is the over-riding concern that a financial crisis has to be averted.


To be continued

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