Of late, the issue of further i-Citra withdrawals continues to dominate. I get it that many have been hit hard by the Covid-19 pandemic. This was made worse by the floods where many Employees Provident Fund (EPF) contributors have had their property like houses and cars washed away. Hence, they are lobbying for the government to allow them to withdraw what is their own savings to tide them over.
But I am not here to discuss the merits of the withdrawals. Much has been written about this and I believe we are all familiar with both sides of the argument. What is perplexing is the insistence of certain politicians on aggressively pushing for the government to allow the withdrawals.
People like Najib Razak, Ahmad Zahid Hamidi and Asyraf Wajdi Dusuki have been endlessly pressuring the government to allow further i-Citra withdrawals, purportedly to throw a lifeline to contributors drowning in the challenges brought on by the pandemic and floods.
Surely experienced administrators like these Umno leaders know what kind of fallout such withdrawals would have on contributors and the country, not just in the long run, but in the short term too. It’s not just about contributors staring at the prospect of having insufficient savings upon retirement, even as Malaysia is set to become an ageing population by 2030, which is just eight years from now. As it is, contributors have withdrawn around RM101 billion under the i-Sinar, i-Lestari and i-Citra schemes.
But further withdrawals can undermine the equity and financial markets. As mentioned by Finance Minister Tengku Zafrul Aziz recently, the EPF’s investments in the equity market are around 16% of the total market capitalisation which is approximately RM1.7 trillion.
Meanwhile, its investments in government bonds are around 26% (or RM247 billion) of the total size of RM950 billion. The EPF also holds 21% of corporate bonds (or RM166 billion) with a size of RM791 billion.
If further withdrawals are allowed, the EPF would be forced to liquidate its holdings in equity and bonds, both domestically and abroad, creating market uncertainties. Investors’ confidence would fall, resulting in capital flight. In other words, those who withdrew from their EPF accounts would be worse off than before.
Now, why would the likes of Najib, Zahid and Asyraf choose to go down this road? Surely with their decades of administrative experience, they know what the decision would entail. If they know about the tailspin the economy will go through, this raises the question of whether this was their original intention all along.
Would economic chaos be the perfect storm for them to execute a political putsch? Past experience has shown that economic turmoil almost always results in political upheaval.
Are there sinister plots being hatched now to precipitate such economic turmoil? Would the subsequent political havoc see the elevation of a new prime minister who is more pliable to those engineering the move to allow the i-Citra withdrawals? What would happen to those facing legal proceedings if a new PM takes over?
There are many unanswered questions, which are not just conjectures but are based on past experience and present realities. Because at the end of the day, no politician in his or her right mind would want to champion further i-Citra withdrawals, going by how it would adversely affect the EPF contributors not just in the distant future, but in a matter of months or even weeks.
As the rakyat, we need to be more discerning about the motives of those who allegedly champion the plight of the people. Sometimes, it’s worth wondering if these people are really concerned about how the national retirement funds are being used, or about their own retirement, preferably free from any legal headaches.
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