Putting in place a new Malaysian order

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THE winds of change have been sweeping through the country in the past fortnight at breathtaking speed.

First, the incredible election results that very few predicted correctly. Then the post-election drama until Tun Dr Mahathir Mohamed was sworn in for a historic second time as PM. Followed by many decisions and measures announced daily as Mahathir hit the ground running, or rather sprinting.

The liberation of Anwar Ibrahim “from prison to palace” and from palace to padang for the night rally last Wednesday completed the key milestones in the quick journey from the old discredited order to the new world being born.

Mahathir was not only the man of the hour, masterfully guiding the ship to the harbour, avoiding the last dangers, but also a man in a hurry, laying the foundations for recovering the economy, reforms to key institutions, and getting to the bottom of the 1MDB sacndal.

Quite a few have aptly quoted Shakespeare to describe what happened: “There is a tide in the affairs of men which when taken at the flood leads on to fortune.”

There is another saying, when a revolution has taken place but there is chaos afterwards and the future is uncertain: “The old world is dying but the new cannot be born.”

What is most remarkable about the first post-election days is not how quickly the old era is passing away but how rapidly the new order is being built.

The reconciliation of the two giants of Malaysian politics, Mahathir and Anwar, paved the way to this remarkable new chapter.

When they fell out two decades ago, their story was worthy of a Shakespearean tragedy. Destiny or will or both have provided them a second chance to get it right this time, and if they do, Malaysia itself will have the opportunity to have a bright future.

It will always be remembered that the sacrifices made by Anwar and his family through his three jail terms and the reformasi movement he generated brought the country to where it is.

Equally, history will record that Mahathir not only laid the foundation of the country’s recent economic development and progressive foreign policy in his long stint as PM but also that he returned to “save Malaysia” from the lowest depths the country had descended into.

If reformasi has been the war cry, implementing a true reform agenda is now the prerogative.

Mahathir has now embarked full scale on reform – Anwar says his role is to keep it on the right track.

Understandably, the PM’s first priority is the economy. The new government has been acting to ensure that as far as possible its new policies should not lead to confidence erosion by investors and fund managers.

Removing the GST, Pakatan Harapan’s main election promise, is the number one political prerogative. Concerns that this will lead to a RM40bil revenue shortfall are being countered by expectations of increased revenue from renewal of a sales tax, the hike in oil prices to the current US$80 (RM318) a barrel, and savings from a planned reduction of wastage in government expenditure. The GST removal on June 1 should also lead to price reductions, a boost to consumer spending and the economy as a whole, and thus generate extra state revenue.

The new government will have to deal with the explosive jump in government debt in recent years. In a mere six years between 2011 and 2017, government debt rose 51% from RM456bil to RM687bil, while government-guaranteed debt jumped 94% from RM117bil to RM227bil.

Added together, the federal and federal-guaranteed debt went from RM573bil to RM914bil. It might be more if the debts of other entities are included.

This massive jump in debt may partly explain how the previous government was able to splurge on many projects and on welfare schemes, in failed efforts to win over the public and in schemes that mainly benefited the powerful and their cronies.

The commercial viability and social value of many of the loan-fuelled expenses are questionable.

An audit should be done on sources and uses of the loans, and how to reduce the damage by cutting loss-making projects and improving the performance of those that can be saved.

Recent years also saw the opening up of financial sectors, leading to high foreign participation in government debt and in the stock market, as capital surged into emerging markets like Malaysia in search of higher yield.

There are benefits in good years, but the country also becomes more vulnerable when global trends turn negative, as is happening since higher interest rates in the United States are prompting capital to flow back.

Dealing with the boom-and-bust cycle in capital flows will be a challenge for the new government.

Beyond economics and institutional reforms, there are other pressing issues the new government should focus on.

One of them is the environment. There are crises developing, on water resources and supply, floods, damage to forests and watersheds, hillside collapse and erosion, deterioration of the coastal environment and of course climate change.

Environmental damage harms social life and the economy. Floods and water shortage affect production, and fish prices have shot up due to overfishing and sea pollution.

Priority must thus be put on revamping environment-related policies and on strengthening the Environment Ministry. They have been neglected for far too long.

-  By Martin Khor is executive director of the South Centre. The views expressed here are entirely his own.

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Dr M must now walk the talk

WHEN I attended an election rally of Pakatan Harapan in Wangsa Maju, Kuala Lumpur, two weeks ago, I was delighted to see the Malays, Indians and Chinese clapping hands in unison when PKR’s vice-president Tian Chua promised that the coalition would look after the interests of all, regardless of race, once it came into power.

I was touched by the reactions on the ground. It was a good feeling to be among people who share similar aspirations for racial harmony and welfare for all in this multiracial country.

My son also had the same experience at a Pakatan ceramah in Hulu Kelang, Selangor, last week.

It was drizzling and he was soaked. Then a Malay man gave him a shirt to change. He came home telling me he hoped that Pakatan would win to bring back the long-lost spirit of muhibbah and unity.

The spirit of muhibbah had for a long time turned into a rare commodity because the authorities allowed political opportunists to disrupt peace with their disparaging remarks against other communities and religious groups.

Now that Pakatan has toppled the Barisan Nasional government led by Datuk Seri Najib Tun Razak in the May 9 general election, it is natural for Malaysians like me and my son to expect a better tomorrow where divisive racist politics is curbed, if not eliminated.

I look forward to the return of the good old days when the spirit of muhibbah among races prevailed.

This expectation is not unrealistic, given the emphasis to multiracialism and unity in the speeches of leaders under Pakatan led by Tun Dr Mahathir Mohamad.

The former premier, once disliked by some Chinese for his past racist rule but who appears to have repented, is now the Prime Minister.

But as Dr Mahathir, who has galvanised almost all Opposition forces against Najib for the latter’s association with the 1MDB (1Malaysia Development Bhd) controversy, is likely to play a key part in governing and “saving” the country, his policy speeches made during campaign are in focus now.

While Dr Mahathir has promised to get rid of corruption in government and Felda, he has also pledged to remove the 6% Goods and Services Tax (GST) and reintroduce fuel subsidies – two issues that have impacted the lower-income group negatively.

But if GST is removed and fuel subsidies are reinstated, Dr Mahathir’s government will have to implement measures to ensure that Malaysia’s fiscal position will not be undermined by populist moves.

With the prices of oil and gas returning to a four-year high, the impact on government finance may be cushioned slightly this year. But for the longer term, sustainability is in doubt.

Indeed, international rating agency Moody’s cautioned yesterday that these campaign promises, if implemented without any other adjustments, would be “credit negative for Malaysia’s sovereign”.

A downgrade in sovereign rating will have a negative impact on the ringgit, interest rates and ranking of our bonds.

It may also affect foreign portfolio investments.

But as Dr Mahathir is a deft hand at crisis management, having led the country out of the 1986 recession and 1998 Asian financial and local political crisis, he should have the wits to forestall any fiscal shortfall.

With many businessmen and economists silently supporting Pakatan, there should be no shortage of talent to help him manage the economy.

These skilled people may emerge in the open soon.

What worries businessmen and economists most is the doctor’s pledge that China investments in Malaysia would be reviewed, and terminated if there were unfair terms in current contracts.

But as Selangor and Penang have attracted substantial direct investments from China, PKR’s Datuk Seri Azmin Ali and DAP’s Lim Guan Eng could present an objective and clearer picture of Chinese investments to Dr Mahathir.

While it is difficult to revoke the East Coast Rail Link (ECRL) due to the vast economic benefits it can bring to the country and the favourable terms in loan repayment, it is easier for Malaysia to delay the implementation of the Kuala Lumpur-Singapore high-speed rail project or stop China from getting the contract.

But before doing anything drastic to cut down national debt, government lawyers have a duty to advise the chief commander on paying vast compensation for breach of contract. As China views Malaysia as a strategic location in its ambitious Belt and Road Initiative, Beijing has been following the political developments closely.

But to be sure, Dr Mahathir was a business-friendly leader when he was the Prime Minister, the first time around.

He was responsible for allowing direct trade between Malaysia and China in the late 1980s, which led to China becoming our largest trading partner. Hence, he is not expected to make policies detrimental to the economy.

One question many people are asking now is: will Malaysia become more democratic under Pakatan rule?

From the campaign speeches made by the coalition’s strategists and Dr Mahathir, this appears to be so – at least for the foreseeable future.

Two PKR vice-presidents, Rafizi Ramli and Tian Chua, have told voters that if one day Pakatan becomes corrupt, the people should vote the coalition out – just like how they brought Najib down.

What Pakatan wants to see is a two- or three-party political system where people have a choice to pick the best among the contenders.

Since Malaysians have boldly voted out Barisan that ruled for over six decades, there is no reason why Pakatan cannot be toppled if it is corrupted by power and greed.

In the campaign speeches, Dr Mahathir promised that he would pass the baton to Datuk Seri Anwar Ibrahim, who will be released from jail next month.

Will he keep this promise after assuming the powerful post?

The logical answer is he will. At 93, his health may not permit him to carry on with this high-pressured job.

It will also be politically unwise for him to stay beyond his welcome, as Anwar had ori­ginally been the choice of the coalition before Dr Mahathir came into the picture.

Many have high expectations of Anwar, who has the experience of an acting premier, deputy premier and finance minister before he was sacked from the Cabinet in 1998 by Dr Mahathir.

Having survived bitter political battles and endured imprisonments under Dr Mahathir and Najib from 1998 until now, Anwar should understand the people’s needs better and rule with a multiracial outlook.- by Ho Wah Foon The Star

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After six decades in power, BN falls to ‘Malaysian tsunami’–

May 9, 2018. This is the day Malaysians experienced the power of the ballot.

Anger towards the current administration had brought them out in large numbers to cast their votes in the historic 14th general election.

Few Malaysians would have thought they would live to see this day – the defeat of the formidable UMNO-led BN/Alliance which had held unbroken power for 61 years.

This is the first time the country has witnessed a change of government since independence from the British in 1957.

Malaysia is probably the only country in the world, apart from a handful of communist states, to have not undergone a regime change.

Pakatan Harapan’s victory is even more remarkable because of the gerrymandering, the numerous attempts by the Election Commission to frustrate the opposition campaign, and the holding of the election in the middle of the week, which most likely resulted in a lower voter turnout.

The rout of BN was made possible by a Malaysian tsunami – a tide which comprised not just the major ethnic groups in the peninsula – Malays, Chinese and Indians – but also those in Sabah and Sarawak.

At the end of the day, the redelineation, which BN pushed through weeks before the election, backfired.

Voters, frustrated with various issues, made a beeline at polling stations nationwide to reverse the efforts by BN and its functionaries to steal this election.

More importantly, this election witnessed a swing among the Malays in favour of the opposition despite the scare-mongering and race-baiting.

With this, Malaysia has taken the first step of becoming a normal country.

A normal country in which two or more coalitions would vie for power. A normal country where power now resided with the people, and not politicians. A normal country in which race and religion would not be an unalloyed obsession.

Now the hard work begins. No one should be under the illusion that a new government would be able to reverse the rot that had taken root for decades.

For a country that is so divided, it would take time to heal the wounds, and for Malaysians to rebuild the trust for one another and for the many institutions that have failed them.

Credit must also be given to those in BN such as UMNO Youth Chief Khairy Jamaluddin, UMNO Treasurer-General Salleh Said Keruak and BN Strategic Communications Department Director Abdul Rahman Dahlan who were gracious in accepting defeat, emphasising that the voice of the people was paramount.

Similarly, supporters of Harapan must also be gracious in victory.

May 9, 2018, is also a reminder to all politicians not to take the people for granted. It is a reminder that it is the rakyat who are their masters, and the politicians have been elected to serve, and not lord over them. It would be wise for the incoming government to remember this.

Congratulations, Malaysia. At last, power to the people!

Source: Malaysiakini EDITORIAL



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