‘Govt should restudy its financial policy’

Former PM Tun Dr Mahathir Mohamad in an interview with Inside Investor opined that the weak results of the last election was due to past policies that were reversed or changed.

KUALA LUMPUR: Malaysia’s longest serving prime minister Tun Dr Mahathir Mohamad, who held the post for 22 years from 1981 to 2003, although retired is still a critical observer of Malaysian politics.

In a recent interview with online business portal Inside Investor, Mahathir spoke on a range of issues and reminded his detractors of his promise that he would not interfere in politics and that the current government had “every right” to change directions and policies.

“But at times when I feel something goes the wrong way, I feel the need to speak out, and sometimes I am also asked to voice my opinion.

“I am not critical of the government, and each leader has his own way and his own policy.

“But when I feel a likelihood of the government party to lose, then I feel I need to voice my views,” he said.

Here’s an excerpt of the interview of the interview:

During your time as prime minister of Malaysia, there was a lot of stability. But in the recent elections, the opposition came very close to the ruling party. Do you think there are issues in Malaysia that have not been properly addressed by the current government?

I always thought that after I stepped down policies would change and with it the economic strategy. As a result, there was lots of support for the government at the beginning.

But in the 2008 elections, for the first time the ruling party could not achieve a two-thirds majority, and in the 2013 election it was even worse.

I think the government should restudy its financial policy and see where it should put the money.

Currently, there is money given to people practically for nothing – for the people it’s a small amount but for the government it’s big. This is hurting the balance in the government’s budget.

Should we also see changes in other policies or certain things to be addressed to restore the vote of confidence?

When there is a change in leadership, particular in the prime minister, the new generation wants to make their mark on the progress of the country.

Some of the policies of the past have been reversed or changed, but as a result people were feeling that the government is not doing the right thing and stopped voting for them.

That’s why the results of the latest elections haven’t been as before. During my time, we were used to winning two thirds of the seats in parliament, but since 2008 the number of seats is much less.

This gives the impression of a very weak government. And once it shows weakness, the opposition of course starts to undermine the people’s confidence in the government.

How can the people be brought back?

I don’t see that happening. The current policies of the government are not such that would make confidence return easily.

Govt not managing finances

In Malaysia, people are now saying that the country has run into a bit of an economic mess. The economy slowed down in 2013, as well as infrastructure projects. What are your views on that?

Frankly, I think that the management of the finances of the country is not done quite well. It’s not what we would expect.

Government spending has gone up, borrowings have gone up, there is still growth but mainly through government spending alone.

The growth rate is relatively high, but there is a deficit both in terms of our trade balance, as well as in the government’s budget.

Are there austerity measures to expect? The Malaysian deputy finance minister recently said that people are ungrateful, for example for getting fuel subsidies. Is this smart for a politician to say that?

The subsidy for petrol is very big and a huge cost factor for the country. And of course, when people get used to low petrol prices, every increase causes a lot of resentment. But the government needs to reduce the subsidies.

In fact, even at the current level, the price is still low when compared to most of the countries in our region. However, people don’t compare the prices but are just unhappy instead. It will take time for them to adjust.

When do you think the developed nation status will be reached by Malaysia? Plans are for 2020, but some politicians say it is possible as early as 2018.

We have been planning for 2020 as per our vision. In terms of annual per-capita income, which stands at nearly $10,000 now, we are almost there.

But in terms of the actual standard of living for the people, we think it will take some more time to achieve the goal of being a developed country.

Where do you see Malaysia in ten, fifteen years?

I hope that the opposition will not win and change the policy. However, if the ruling party is unable to sustain the support of the people, then the future of Malaysia may see a lot of instability.

What is the best that Malaysia has to offer?

The best Malaysia has to offer, both to investors and tourists, is the stability of the country. The stability is due to the country being governed by the same party since independence.

If the opposition would rule the country, they would want change – even in terms of their attitude towards foreign investors, and maybe there would come instability due to these changes.

All these things would make Malaysia less attractive.

The country is not ready to see radical changes in the policy of the government