Chief Minister Lim Guan Eng said Penang’s hopes of achieving high-income status by this year has been crushed by the 20 percent drop in ringgit to US dollar from RM3.27 to RM3.95.

He said Penang, instead of achieving high-income status, may have to wait another five to 10 years to achieve the Vision 2020 target of US$15,000 gross domestic product (GDP) per capita.

“All this because of the 1MDB!

“If Prime Minister Najib Abdul Razak still thinks that 1MDB is worth it and that it is not wrong for RM2.6 billion to be donated to his personal account to help BN win the 2013 general elections, then he should go back to the voters and let them decide in a fresh general elections,” Lim ( photo ) added.

The debt-laden state sovereign fund is wholly owned by the Finance Ministry headed by Najib.

Najib, who is also Finance Minister, is still facing questions over the identity of the mysterious donor who was said to have deposited the RM2.6 billion into his personal banks accounts although the premier said it was never used for his personal gain.

Lim was referring to the World Economic Forum Human Capital Report which defined a high-income economy as one whose GDP per capita reaches US$12,467 or RM40,841.

The figure was based on the exchange rate of RM3.27 for US$1 and Lim described as “unfortunate” the present precipitous drop in the ringgit today to RM3.95 to US$1.

He said this meant that the wealth of Malaysians has diminished by at least 20 percent.

Leaders in denial syndrome

Instead of RM40,841 as the benchmark to achieve high-income status, the 20 percent drop in the ringgit means that the benchmark has been increased to RM49,245, Lim added.       

“Penang was expected to achieve a GDP per capita of RM42,251 based on a population of 1,681,922 people and a GDP of RM71,063 million by 2015.

“However, the RM42,251 GDP per capita that would have made Penang a high-income economy because it exceeded the previous high-income benchmark on RM40,841, was based on the previous exchange rate of RM3.27 to US$1.

“Based on the current exchange rate of 3.95 or 20 percent drop in the value of the ringgit, Penang’s 2015 estimated GDP per capita of RM42,251 is still far off from the new revised high-income benchmark of RM49,245,” he said.

Lim said this goes to show the cost to Penangites in terms of price inflation due to the drop in the ringgit and the state missing out from being a high-income economy.

He added that this 20 percent drop in value of the ringgit in less than a year shows the need for national leaders to stop being in a denial syndrome.

Lim said the country’s leaders have been ignoring the failure of their economic management and failed economic policies.

“They have also refused to account or admit that the RM42 billion 1MDB financial scandal and the RM2.6 billion donation deposited into the prime minister’s personal account has caused a complete and comprehensive loss of confidence amongst foreign investors and the local business community,” he said.