Isn’t It About (Malaysian) the Economy?

 "It's the economy, stupid" was a popular slogan used by former US president Bill Clinton in the 1992 presidential election. It was mainly targeted at workers' growing resentment over the state of the economy. The Madani government could well learn from the US experience. In fact, historical data shows that every time our economy hit road bumps, the ruling government suffers electoral setback.

In the 1969 general election, where the Alliance lost its two-thirds Parliamentary majority, economic turbulence was the key. In the 2008 general election, Barisan Nasional (BN) again lost its two-thirds majority, the economy was the issue. Some 10 years later, issues like 1MDB and corruption helped infuriate voters. 2018 was also the year BN lost power for the first time after 61 years.

https://www.wikiimpact.com

What kind of bearing will the economy have on the outcome of the upcoming elections in six states? The "3Rs" (race, religion and royalty) will colour the polls campaign, no doubt!

But what this election comes down to is bread-and-butter issues like jobs, inflation, the overnight policy rate (OPR) hike and subsidies. The prolonged war in Ukraine, the interest hikes in the US, the frosty US-China trade ties as well as climate change, weigh heavily on the Malaysian economy. 

There is much pessimism as investors and businessmen get jittery over the lack of economic direction from the Prime Minister's administration. Almost nine months now the administration does not have much to show as far as the economy goes. A pressing concern is the ringgit's freefall. As a major importer of food and other essentials, the ringgit's depreciation means costlier food, among others. Parents who have children studying abroad are also feeling the pinch.

Despite having secured a two-thirds majority in Parliament under the unity government, the current government does not seem to be able to implement much-needed reforms. These include institutional reforms, law reforms, a competitive and transparent budgetary process for large scale infrastructure projects, addressing Malaysia’s low wages structure (Malaysia has one of the lowest compensation of employees-to-GDP ratio) and education reforms to stop the brain-drain. Instead, we have been bombarded with racial and religious issues as the opposition continues to harp on what they know best to gain voters’ confidence.

Low-lying fruits are aplenty but please come up with a four-year comprehensive plan as to how it wants to reform the economy. For example, try to rephrase Rishi’s five targets/priorities as follows:

• Halve inflation;

• Double GDP growth;

• Implement reforms – institutional, law, budgetary;

• Provide quality education; and

• Minimise corruption

Only then are we on course and the ringgit, economy and stock market may have a ray of hope.

References:

‘It’s the (Malaysian) economy, stupid’, Yap Long Chuan, MalaysiaNow, 28 June 2023

Time for reforms, Pankaj C. Kumar, The Star, 1 July 2023