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Wednesday, December 29, 2010

Early polls will decide Najib's fate


By Syed Jaymal Zahiid

YEAR-END SPECIAL KUALA LUMPUR: It will be a high-strung first three months for 2011 as the country anxiously awaits the possibility of early elections, the most important yet for the two-year-old Najib administration.

There is mounting speculation, reinforced by recent political developments, that Prime Minister Najib Tun Razak will hold the 13th general election in the first quarter of next year.

This will be his first as premier since taking over from his predecessor, Abdullah Ahmad Badawi, in April 2009, after the latter led Barisan Nasional (BN) to one of its worst ever electoral performance that subsequently led to his political demise.

Najib knew of the arduous task at hand. This election, should he press the button, will be a referendum on his administration. It will be the yardstick to measure the weary and cynical electorate, if they are buying the stigmatised product that the country's sixth premier is tirelessly trying to sell – reform.

The prime minister wasted no time in boasting several reform measures: the six National Key Results Areas (NKRAs), the Government Transformation Programme (GTP), the New Economic Model (NEM), the 10th Malaysia Plan (10MP) and the Economic Transformation Programme (ETP).

All this he claimed will help the country achieve a "high income" and "developed" nation status in just nine years, targeting an optimistic annual growth of 6% through a mixture of efforts to boost domestic market and bolster the currently low private sector participation.

More feel-good announcements

Observers believe that Najib is embarking on a tried and tested formula – put money in the voters' pockets and they will adore you – to catch up with straying support and the recent increase in approval rating seems to indicate that his method is gaining traction.

And to show that he is not all talk, close to a dozen private investment-driven entry point projects under the ETP have kickstarted and expect to see more announcements in the first three months as Najib would want to create a "feel-good factor" in the run-up to the 13th national polls.

But while voters are leaning towards Najib, the business community remains sceptical with major players scoffing at the NEM which they say lacks depth to stimulate enthusiastic reaction from the private sector.

Najib's teetering on key business-friendly policies like the reversed decision to implement the controversial goods and services tax (GST) and the snail-paced move to slash its hefty subsidy programme have planted seeds of doubts in the business community about Najib's will to overhaul the economy.

The government claims that GST will increase its revenue to RM13 billion in the first year of implementation. Observers say the widened tax base is needed to replenish the drying state coffers and stop its dependency on oil money.

Petronas is the government's main income earner, with almost 30% of its state revenues derived from the one of the few Malaysian companies to be listed in Forbes Fortune 500.

More subsidy cuts in the pipeline

But Najib has been on the defensive over this, doing his best to deflect constant attacks from rival Pakatan Rakyat, which accused his administration of bleeding Petronas to death in a bid to compensate the widespread and costly corruption.

Graft has been the main factor behind the drop in government income, leaders from the opposition bloc claim, and should this be addressed, revenues can improve and there won't be a need to implement policies that they allege would burden the majority like the GST or subsidy cuts.

Najib would want to quash the negative publicity plaguing his reform efforts and is likely to escalate his charm offensive but would first need to contain the potential voter backlash by calling for early polls.

A fresh mandate means he has five more years to buttress his reform measures and carry on with his unpopular but much-needed initiatives to put the economy back on its track.

Expect the steamrolling of the GST bill which has already been tabled in Parliament should BN triumph in the early polls. Also in the pipeline is the increase in fuel and sugar prices as Najib seeks to slash subsidies amid efforts to tackle the budget deficit. - FMT

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