By Samantha Joseph
Tiger usually finds the human ‘need’ to pass the buck amusing. Humans twist themselves into some very uncomfortable positions to avoid accepting responsibility for one act or another. However, in the case of the Fitch ratings, Tiger has taken umbrage to the fact that it has been blamed on the ‘young guys’ who were impatient to downgrade anything and everything in sight. Youth is often made a scapegoat but even the shortest stroll through the corporate jungle with Tiger will demonstrate that in this case they were not to blame. Isn’t it time we focussed on the real problem?
Tiger remembers the days when Tiger was a young cub, stuck in the phase between man-eating monster and plush-toy cuteness, and desperate to pull herself out of it through any means. Tiger can’t remember if she had a conscience at the time.
Tiger was surprised to see that one of the issues to pop up from the Economic Transformation Programme briefing was that of the Fitch ratings. Of course, the Fitch ratings itself was not a surprise topic, seeing as it was related to the economy.
The surprise is that some of the blame for the revision of Malaysia’s sovereign credit rating from ‘stable’ to ‘negative’ was placed on the shoulders of ‘the young guys’ at Fitch who were impatient to give a downgrade to any country that crossed their bloodthirsty path (rather like young cubs trying to prove themselves).
When one understands the way of this dog-eat-dog world, one does understand that things must be done to put one’s self ahead of others (understanding does not mean condoning). This may result in the jumping of the gun. Or the missing of a point.
It seems that these young analysts at Fitch refused to listen to Treasury Secretary-General Mohd Irwan Serigar Abdullah’s explanations for the economy and chose to push out a report before even the Budget came out. Ah, the rashness of youth. So many things can be laid at its doorstep.
But Tiger wonders if we are missing the point here. Yes, the Fitch revision was unasked-for. Yes, the gun was jumped. Were the points that the Fitch analysts brought up not relevant?
The deterioration in public finances since 2008, worsening public debt and lack of will to put into action budget reforms are all legitimate grouses (delicious, delicious grouses).
Did not Moody’s, in its reaffirmation of Malaysia’s ‘stable’ rating, mention much the same issues: worsening fiscal and debt ratios that have yet to recover to pre-crisis levels and the need for structural reforms to ease the debt burden.
Moody’s and Standard & Poor’s analysts are ‘senior fellows’ who ‘know the difficulties’ when it comes to explaining the challenges faced by the government, so therefore are the areas that they have identified far more relevant? Not particularly, as far as Tiger can see. Whatever criteria used by the international credit rating agencies or ICRAs individually, there is a sense of agreement on Malaysia’s main economic problems.
Having a discussion about the challenges of a country’s economy with analysts seems a little gun-jumping itself. What country does not have challenges? And should all these countries then have a free pass when it comes to being revised or downgraded?
Tiger has some issues about where his next meal will come from. Does it then mean that Tiger has a free pass to snack on the next man to wander into his territory because he is hungry and facing gastronomic challenges?
To complain about the specific criteria of a ratings company, or even that they have a specific criteria at all is drawing attention away from the main issue of Malaysia’s economic performance.
Unless, of course, the discussion is about firming up the criteria used by international credit rating firms. All credit rating firms, not just Fitch, as they all will have specific criteria. This would be an entirely separate debate.
Is the legitimacy of Fitch’s report compromised because the analysts are young? It is understandable if the report were questionable because of the underlying self-interest inherent in the ratings of these ICRAs. Blaming the youth of the analysts seems a little out-of-place in the whole scheme of things.
For example, if a kancil is smacked a little too hard by a tiger because it smelled delicious, and the kancil says, OY he did it because he’s young and doesn’t understand that I deserve not to be smacked, the kancil would be laughed out of the jungle. The kancil was smacked by the tiger because that’s what tigers do. They smack things. Then they eat them.
Fitch’s re-rating may be premature, but by blaming an outside factor, like the youth of the analysts, it will not stop any other ICRA from rerating or revising if there is still dissatisfaction once the Budget has been delivered.
GRRRR!
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