Focus more on long-term policies, economists tell Anwar

 

Experts say Prime Minister Anwar Ibrahim should not push aside long-term economic growth in favour of short-term support for citizens. (AP pic)

PETALING JAYA: Economists have urged Anwar Ibrahim to focus on policies that will boost the economy in the long term, as his first year in office as both prime minister and finance minister draws to a close.

Ida Yasin of Putra Business School said while she agreed with current policies for the short and medium term, the government should place more emphasis on long-term economic growth.

“In certain areas of the economy, we can definitely see some improvement such as the 3% GDP growth, less than 4% unemployment and stable inflation despite global supply chain problems.

“Yet the government should not push aside long-term economic growth in favour of short-term support for citizens,” she said.

During the tabling of the 2024 budget, Anwar had increased funding for the Rahmah cash aid programme from RM8 billion to RM10 billion, despite plans to reduce government spending on subsidies.

Carmelo Ferlito of the Center for Marketing Education said there had been many “contrasting signals” from the Madani economy framework.

“The framework emphasised an open and market-friendly economy but the 12th Malaysia Plan still emphasises government control.

“Overall, there are some fundamental contradictions that remain unresolved, and what I observe is a lack of a clear strategy to solve them,” he said.

Ferlito also cited a recent article he had posted on his company’s website, where he made the case that the numerous conflicting messages from a policy perspective were the most important domestic factor behind the weakening ringgit.

“We get commitment to fiscal discipline and yet the biggest budget ever. Price controls were removed only recently, despite statements in favour of a pro-investment ecosystem,” he wrote.

Felito added that this scenario made it difficult to identify a policy plan.

“There is a need to improve the consistency of the policy strategy to attract foreign investments and to build the right ecosystem for nurturing domestic entrepreneurship and favour industrial concentration in order to spur technical progress,” he said.

Anwar, whose Madani administration marks its first year in power this month, had for decades promised sweeping reforms and social justice.

His government was formed in the aftermath of the 15th general election, to break the impasse brought about by a hung parliament after no single coalition won enough support to take Putrajaya on its own. - FMT