100% reforms the solution to revive the ringgit, says MP

Subang MP Wong Chen said there should be no more excuses for implementing reforms.

KUALA LUMPUR: A government backbencher has called for “100% reforms” to revive the ringgit, which has recently experienced a decline in value against the US dollar.

Wong Chen (PH-Subang) said the depreciation of the ringgit is partly due to diminishing confidence among the middle class.

“In 2023, with the emergence of the Madani government, ordinary citizens, especially the middle class, had very high expectations that reforms would take place,” he said when debating the King’s speech in the Dewan Rakyat today.

“When reforms were not implemented, the middle class’s confidence level dropped. The 2023 fall in confidence of the middle class was the tipping point for the fall of the ringgit.”

Wong said traditional fiscal or monetary policies may not be sufficient to address this issue and advocated for “reforms in politics, incentives, nudges and societal re-engineering”.

“The time for ‘to be or not to be’ has passed. There are no more excuses. A 100% ‘reformasi’ is the only solution,” he said.

The ringgit has slid by over 4% so far in 2024, adding to losses from the previous three years.

Wong also attributed the ringgit’s decline to capital outflows, despite the country recording record trade surpluses over the past 30 years.

“Crony capitalism is the main contributor to the depreciation of the ringgit over the past 30 years. It is 99% of the cause,” he said.

He warned that if crony capitalism persists, it will worsen the ringgit’s decline and exacerbate the life of ordinary citizens while allowing the rich to enjoy luxurious lives overseas.

Solutions

To address this issue, Wong proposed instructing all government-linked investment companies (GLICs) and government-linked companies (GLCs) to be on standby to repatriate money, equities and assets from overseas.

“It’s crucial to maintain a defence line and prevent the psychological barrier of (the ringgit at) RM5 (to the dollar) from being breached. If we surpass the RM5 threshold, it could trigger a severe economic spiral,” he said.

Wong also suggested that the government attract more high-net-worth resident investors by creating a conducive platform for investment and migration to Malaysia.

“This entails efficient and transparent immigration regulations, free from corruption.

“Roll out the red carpet and facilitate their residency and investments in Malaysia,” he added.