PH risking support by continuing many BN policies, says analyst

Firdaos Rosli.

PETALING JAYA: The Pakatan Harapan-led government will likely continue Barisan Nasional-era policies for the sake of continuity, though this may further erode its popularity and support, an economist said.

Firdaos Rosli of the Institute of Strategic and International Studies (Isis) said it was normal for governments around the world to want to ensure continuity even when there was a change of leadership.

He told FMT that if the PH government were to change too many things at once, it might find it more challenging to manage the effects of the changes and the sentiments on the ground.

Already, he said the government faced criticism over the reintroduction of the sales and services tax (SST). It was aimed at reducing the cost of living, he said, but for many the change from the goods and services tax (GST) was largely ineffective in bringing down prices.

Oh Ei Sun.

Making matters worse was the reduction in government revenue to the tune of RM21 billion, even as Putrajaya continued megaprojects such as the East Coast Rail Link and Bandar Malaysia.

He was commenting on the findings of a Merdeka Center poll which found only 40% of respondents were satisfied with the government’s management of the economy.

Some 46% said they felt the “country was headed in the wrong direction“, compared with 24% in August 2018, while only 39% said they approved of the ruling government.

Firdaos believes the narrative about debts and corruption scandals are being recycled once too often, and that people want to see what PH has in store for real economic reform.

“The problem is that if they try to map out their medium to long-term economic policies, it may mirror BN’s economic priorities in many ways.”

In this respect, he said, he would expect PH to eventually abandon SST in favour of a GST-like tax, ratify the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and overhaul TN50, among other moves.

In the meantime, he added, PH’s manifesto promises would continue to be a point of reference where the people’s expectations were concerned, and when these expectations did not reflect reality, PH’s popularity would be hurt.

“The pressure for a new economic narrative will go up in time, as will the demand for PH to deliver on its manifesto.”

Singapore Institute of International Affairs senior fellow Oh Ei Sun said the government was faced with rural and urban populations who were dependent on the government where the economy was concerned.

In the rural area, people wanted aid and infrastructure, while in urban areas, they wanted economic stimuli and incentives for business.

“If these aren’t forthcoming, the people won’t be happy and a lot of blame is heaped on the government. There is a distinct possibility that this will be a one-term government,” he said in commenting on the drop in support.

Yeah Kim Leng.

On top of economic issues, he said race issues were also of importance to the Malay-majority voter bank and that the past three by-elections were an indication as to where the Malay votes would go.

“While it is laudable that Putrajaya is pushing out a lot of progressive social, political and legal policies, many want to see more being done for the economy. For now, maybe people cannot stomach many political and social changes, so the government should give the impression that their focus is the economy.”

Sunway University Business School economist Yeah Kim Leng, meanwhile, said the government should stay focused and committed to the institutional and economic reform agenda as the long term benefits far outweighed the short term costs.

“More focused economic and communication programmes should be targeted at groups who feel that their socio-economic and political security may have been threatened by the reform agenda.” - FMT