IN the demands on the economy, the difficulty of course lies in how to balance different interests. The underserved, business, the NGOs and so on desire solutions many of which are competing. Good policy is to keep every segment of society satisfied. This is difficult.
What has to happen is to give enough economic satisfaction to every stakeholder such that they do not feel neglected even if each may still feel more could have been done for them.
The Pakatan Harapan government faces a similar challenge and has to achieve the same kind of balance. When it came to power there was an unrealistic expectation of prices and unemployment coming down, housing and healthcare needs being met at affordable cost. To a considerable extent this was encouraged by the PH election manifesto which was the usual oversell contained in all such manifestos.
So PH has to deliver to the extent possible. To be fair, PH is addressing all these issues, even if it has not effectively explained why removal of the Goods and Services Tax and its substitution with the Sales and Services Tax has not resulted in lower prices, as promised. There is an explanation. But the explanation on this matter and all other current economic issues has not come out clearly.
What PH has to do is to appoint an economic spokesman who will give regular briefings every month on economic issues facing the people and the country, and what is being done about them. The communication gap is a big hole in the PH government which is tearing into it. There is an increasing loss of confidence in PH as a result. PH must act to communicate to the people regularly with clarity.
Actually there are good explanations to make and good stories to tell. The statistics in this country have for a long time not been representative. The unemployment rate of 3.3 per cent totally understates that of B40 and below which is as high as one-fifth. Recently, we had this challenge on the stated poverty rate. All this is not of PH’s doing. But it has to come clean. Something has to be done about our national statistics.
The CPI (Consumer Price Index) numbers, the basket and weightage have for the longest time been misleading. The cost of living for the B40 group is much higher than the official inflation rate because, for instance, the weightage for food and beverage in the CPI basket is 29.5 per cent whereas for the B40 it is 38.5 per cent.
The day before last Ramadan, chicken was sold at RM8.10 per kg. The next day it was RM7.80. This kind of volatility is not normal. There are cartels operating and I know the Domestic Trade and Consumer Affairs Ministry is looking into it. It should talk about this more than just RON95 and RON97.
For businesses, the coming to power of PH meant a move from their comfort zone, conduct which was a norm under Barisan Nasional. Not always above board, good margins and the 1MDB scandal lived with. PH has changed all that, as was seen in many nights of the long knives at government-linked companies and in the suspension of many infrastructure projects.
What was a change for the better was not well negotiated by the new government which over-did, particularly the point about fiscal stress in public finances. Lack of clarity on what shape the economic policy would take did not help. Neither did the external environment which, of course, was not PH’s doing.
Despite still steady economic numbers therefore, the mood was not positive. Even when infrastructure projects were revived after renegotiation — especially the ECRL — businesses did not come out to applaud PH enough.
Businesses must now adjust to the new normal in Malaysia. PH must be clear about the new parameters, the direction of policy and its fast implementation. The environment must be purged of past suspicion. If business people cannot adjust to change they should not be in business. If a government cannot manage change it will not long be in government.
Despite the huge challenges, both internal and external, there is a lot of life yet in the Malaysian economy which should not be stilled.
A good spokesman on government economic policy and its management and constant dialogue would be of great help. In Shared Prosperity as its fundamental policy PH has the seeds for the future direction of Malaysia. The New Economic Policy actually was a kind of shared prosperity but in many ways it was sucks, sapping away growth because it gave reward without effort, a form of daylight robbery.
Shared Prosperity must also have growth first and this the PH must make clear — and how. Tourism is one sector on which there should be full concentration. There should be some initiatives within the government’s means in the next budget, without being fixated on a certain level of fiscal deficit. There is some space. There should not be new disabling taxes.
With Shared Prosperity the country should be looking at greater but higher quality growth with more granular investment in both human and financial capital. Malaysia would be one of the first countries to come out with a comprehensive commitment to a new economy if Shared Prosperity is given content for the mutual benefit of man, capital and land — the old factors of production — which have been given unbalanced and disproportionate benefit in the modern global economy.
We should be mindful of the huge disparities and cracks breaking out all over the world upturning hitherto stable political societies. With already enough challenges of our own kind, these are additional disruptive forces we must avoid.
At this critical juncture, PH must not only give content to policies for the New Malaysia in a world, including our own, threatened by old policies disrupting social cohesion, but also offer the promise of continuity in the pursuit of those objectives for the benefit of all Malaysians.
Therefore, finally, PH must put to rest the interminable speculation on succession of its leadership. It is not just about a person. But, importantly, also about substance of policy and direction and continuity. There apparently was a deal on the succession which was political pure and simple, and should be kept. Otherwise PH will break up and Malaysia will lose its political stability.
At the same time, to become leader of the New Malaysia is not just a job to walk into. It requires good preparation and demonstration of integrity and detailed content. I do not know what actually is discussed between leader and leader-in-waiting when they meet, but I should hope they go into full detail of what is needed for the New Malaysia to succeed. Slogans and generalities will not do.
The country is waiting — and not just for tweets and pictures on Facebook.
The writer, a former NST group editor, returns to write on local and international political affairs. He is also member of the Economic Action Council chaired by the prime minister