By J. Solomon
A media report on 29 June 2017 citing Standard & Poor’s Global Ratings (S&P) is both concerning and expected. S&P, in representing the corporate world and the failed neo-liberal agenda, has questioned the political will to push through with the proposed RHB-AMMB merger.
The National Union of Bank Employees (NUBE) and the Malaysian Trades Union Congress (MTUC) roundly condemns the efforts of mergers and take-overs that result in not just social issues such as loss of jobs but also economic ones in the longer term.
S&P speaks in terms that the consolidation of the banking industry, with the consequence of creating larger banks, is good for the economy. How can this be the case and why is an organisation such as S&P trying to mislead Malaysians? What is the agenda of S&P?
The Global Financial Crisis of 2008 had taught us a few things, chief among them being that the size of banks and the brazen speculative behavior of such banks was the main cause of the financial crisis. It was the taxpayer that had to eventually bail out big banks, and the economy as a whole.
How is creating such risks for the Malaysian economy, in terms of a RHB-AMMB merger going to benefit Malaysians and the Malaysian economy? It will have an immediate benefit on the share prices and executive compensation.
Organisations involved in the exercise such as consulting firms will also stand to benefit through the big fees that they charge. The common Malaysian though would be adversely affected. There will be a loss of jobs and higher unemployment would only create longer-term structural issues for the Malaysian economy through reduced consumption and demand.
S&P refers to cannibalisation of the market, which is intrusive by nature. The problems of the global economy can be attributed to the loss of influence of consumers. Consumers should have choices so that the best products could serve society.
By restricting the number of products in the market, it creates inefficiencies and is against the very principle of free markets that organisations such as S&P espouse. Organisations such as S&P should not blow hot and cold and should not work against the interest of Malaysians and the Malaysian economy.
It takes political will to resist the influence of the neo-liberal agenda, which continues to cause problems for the 99%. Thus, the Malaysian Trades Union Congress urges the Malaysian government to stand up to protect the interest of the Malaysian worker and the Malaysian economy.
J. Solomon is the secretary-general of Malaysian Trade Union Congress.
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