The “To Do” List for Ministers

Malaysia has been through a period of slow growth and with global recession looming in 2023, the situation may not improve much. Again, competition is now intense for being the preferred investment destination in ASEAN. 

Here are some “to do” list for newly-minted Ministers in order to improve things:

1. Minister of Finance - Datuk Seri Anwar Ibrahim

-Address both cost of living and fiscal position

Anwar, who is also the prime minister, has committed to address the rising cost of living. One way to do so, is through subsidy intervention. The subsidy bill should be allowed to rise further in 2023 as a temporary measure. That may impact fiscal position, but addressing cost of living is more important.

Targeted subsidies or other implementation methods are urgent to better manage spending and undertake fiscal consolidation. But these mechanisms may take time to fix.

Debt service charges have exceeded 10% of federal government revenue since 2014. By 2023, about 17 sen of every ringgit earned by the Federal Government will be spent on repaying debt. Malaysia is truly blessed. The surge in oil prices in 2021-2022 followed the Covid pandemic. This helped cushion additional spending sourced from Petronas.

Meanwhile, there are three huge debts that need resolution – Prasarana (RM40b); DanaInfra (RM80b) and PTPTN (RM40b) – together they exceed the development expenditure in a year.

But expanding the government’s revenue base is key – tax reforms and enforcement are essential, such as through the overdue broader tax reform. The Goods and Services Tax (GST) may need some changes. It is time to expand (or introduce) windfall, remittance and forex transaction taxes.

Source: The New Straits Times

2. Minister of International Trade and Industry -  Tengku Datuk Seri Zafrul Aziz

-Rebranding Malaysia to retain and attract investments

In 2021, Malaysia booked a total of US$11.6 billion in foreign direct investments, or FDI, behind that of Vietnam (US$15.7 billion), Indonesia (US$20 billion) and Singapore (US$99 billion), according to the Asean Investment Report 2022.

Zafrul’s task in his new role is to capture and retain not just FDI but to retain DDI (domestic direct investments), and to continue existing efforts to reduce bureaucracy restrictions, as well as action plans to channel FDI into local SMEs (small and medium enterprises).

Malaysia must be branded correctly, and should no longer be associated with just cheap labour and low costs (such as energy). He may “review and renew” MITI’s incentive packages for new investors.

3. Minister of Natural Resources, Environment and Climate Change - Nik Nazmi Nik Ahmad

-Provide clarity on RE pathway, industry liberalisation

In 2022, Malaysia banned any export of renewable energy (RE), at a time when there was heightened demand for green energy in countries like Singapore. The reason cited was low RE supply locally. But on the other hand, the country has a high electricity reserve margin that is expected to rise to 40%, more than double the recommended 15%.

Instead of giving way to fast-growing countries like Vietnam and Laos, how can Malaysia grow its RE sector and capitalise on the industry’s demand while balancing local industry dynamics? Nik Nazmi’s policy on the country’s RE pathway — as well as the disrupted power sector liberalisation under MESI 2.0 — will be closely watched.

4. Minister of Digital Communications - Fahmi Fadzil

-Ensure 5G roll-out continues one way or the other

Malaysia’s journey to 5G follows several years of delays. There has been multiple reviews of the implementation method, from a telco consortium, to individual licensees, and now under the single wholesale network (SWN) provided by government-owned Digital Nasional Bhd (DNB).

The PM said his administration will review the 5G roll-out as it “was not done in a transparent manner”. Arguments about the implementation method aside, the Minister must ensure that 5G roll-out to the targeted 80% by 2024 proceeds smoothly. Otherwise, Malaysia will not be able to catch up with Thailand,  the Philippines, Taiwan, South Korea and Japan, who are all already 5G-ready.

5. Minister of Human Resource - V Sivakumar

Minister of Education - Fadhlina Sidek

Minister of Higher Education - Datuk Seri Mohamed Khaled Nordin

-Match labour demand and supply

Demand for foreign workers rose to 2.1 million from 1.8 million pre-pandemic. In the longer term, automation is the way forward. Meanwhile, the Government needs to resolve the shortage of foreign labour, which is currently indispensable for three key sectors — plantation, construction and manufacturing.

The ministers must work with industry players to identify and help establish what they need, as well as to provide the right employment, reskilling and upskilling programmes in order to address skilled labour shortage and youth unemployment.

Education needs a major reset. We need English, Bahasa Malaysia and Maths as the key to a new Malaysia. Enough of narrow-minded thinking! In fact, a third or fourth language will be an added advantage. If we are for STEM then please help create the environment and employment opportunities for that to happen. Otherwise, we will educate many and they leave for greener pastures. An Education Commission may help streamline vernacular, tahfiz, national, international and home schools.

Higher education has to shape-up with meritocracy at all levels – from entry to promotions. There are several other issues which the present Higher Education Minister is well aware of.

6. Minister of Home Affairs - Saifuddin Nasution Ismail

-Transparency and Conduct

This Minister has to tackle the IPCMC, deaths in lock-ups, missing persons like Pastor Raymond Koh, Altantuya’s case etc.

There is a need to be transparent with what has taken place and what needs to be done on conduct of the police and other agencies.

7. Minister of Transport - Anthony Loke

-Connection and Costs

There are several projects that need cost optimisation or review – e.g. the MRT3, ECRL and HSR. Maintenance of systems is of concern especially the recent breakdown of the Kelana Jaya Line. The debt  burden of Prasarana needs to be examined. The “ballooning” support of MAS is another area for the Minister’s remit. Should MAS be privatised again? Then there are new airlines “cannibalising” markets of the more established ones.

The role of MAVCOM has to be addressed when customer complaints are not met.

8. Minister of Economic Affairs - Rafizi Ramli

-Growth, Inequality, Disparity

The economy has been “chugging” along, but impacted by Covid. Less bureaucracy and more action is needed to implement projects. It is the planning “gap”, from plan to execution, that needs to be narrowed.

Then there is income inequalities, wealth distribution and regional disparities which all require the Minister’s focus.

The list goes on for many of the other Ministers as well – the objective is to seek early wins, medium-term results and good long-term outcomes for a dynamic and vibrant Malaysia.

Best of luck!