For Anwar, ‘It’s the economy, stupid’

 

With a bad setback at the state polls on Saturday, Prime Minister Anwar Ibrahim’s only hope for regaining Malay support is the old adage popularised by former US president Bill Clinton: “It’s the economy, stupid.” And he has four years to do it - no time to waste anymore.

Well, it’s 3-3 after the state elections and Perikatan Nasional has made big gains in voter acceptance. For Anwar, it’s time to hunker down to some serious work considering the significant erosion of Malay support for Pakatan Harapan and its new partner BN, and other partners.

With PN gaining vote share in every state (see table above), it captured nearly 60 percent of the seats under contest, winning 146 out of 245 seats (see table below), leaving Harapan-BN with 40 percent.

PN made major inroads in terms of seats captured in Penang and Selangor, with Selangor losing its two-thirds majority. The Malay choice currently is clearly PN.

Harapan, but not BN, clearly enjoyed strong support from non-Malays. There is a clear divide - overwhelming support from non-Malays for Harapan. And increasing Malay support for PN. Our voting is getting more polarised along racial lines.

Umno’s relevance has further deteriorated - no support from non-Malays, and strongly diminished support from the Malays. In fact, where PKR and Amanah stood in Malay areas against PN, they seemed to get more support from Malays than when BN stood against PN.

The plight of Umno president Ahmad Zahid Hamidi and by extension, Najib Abdul Razak did not resonate with the Malay grassroots and became irrelevant in the elections. That must cause a rethink of Anwar’s strategy of teaming up with Umno for Malay support. He needs to think of something else.

But Umno’s influence in the Madani government will now go down - some will consider this positive. At the same time, it reduces the chances of Umno doing a deal with others to upset the fragile balance of the coalition government.

Malay sentiment

It’s clear that trying to please everyone ahead of the elections does not work. But now Anwar has an opportunity to really do something. With both federal and state elections out of the way and little threat that he may be toppled, he is now truly in the driver’s seat and can now be the master of his own and the country’s destiny.

He has some four years to turn Malay sentiment around and he can’t afford to hurt the sentiments or the welfare of the non-Malays who are his main support base. The only way to overcome this is economic progress which helps everyone - he has to take concrete steps to grow and improve the economy, and I mean concrete. The time for showmanship and grandstanding is over.

The so-called Madani economy direction announced before the state polls has seven targets: Malaysia being in the top 30 of the world’s largest economies; top 12 in the Global Competitiveness Index; labour income constitutes 45 percent of total income; women participation in the labour force reaches 60 percent; top 25 in Human Development Index; top 25 in Corruption Perception Index; and fiscal sustainability with a fiscal deficit of 3 percent.

But there is no statement of the following: What is the current starting point? By when and what is the timeline? How? Through what steps will it be achieved? What is the income target? If these are not disclosed and concrete measures are taken, it’s meaningless. It’s just talk.

There is much lip about corruption, for instance, but very little action. Talk to businesses, especially local small businesses, and you will learn how corruption at local authorities and enforcement agencies block them at every turn in running their businesses - restaurants, pubs, and service providers.

The first order of things is to remove corruption and stop it from preventing businesses from operating efficiently. This is so basic.

There are many other things too numerous to mention - education for instance - nothing has been done to improve education for the masses whose relative standards have declined tremendously. If Anwar can show tangible progress in these areas over the next four years, most people, including Malays, will vote for this Madani government.

The ringgit and the stock market both closed lower before the elections, an indication of the market’s defensive view that little will be done to improve the economy. But confidence can be improved if the right measures are taken for the short and medium term.

It depends very much on what the government does in the months ahead. If it can shake its lethargy and talk, and start doing something real, then things will start moving, including the market and the ringgit.

Suggestions

Here are 10 things which can be done quickly with little or no harm to the majority of the rakyat:

• Remove all blocks for businesses to be set up and run. Regulatory authorities need to be put on notice that their role is to facilitate business and endeavour not to frustrate genuine businesses by putting blocks which will be removed at a price.

• Really do something about corruption. If corruption involved in licensing, monitoring, and approvals is removed in favour of fairness, the state of corruption will be improved immediately. This requires guts but it needs to be done soon.

• Simplify processes. If anyone satisfies the requirements, approval must be automatic. Why have approved permits for APs? Let anyone import from anywhere and pay relevant duties. Remove these duties progressively.

• Change in monetary policy to strengthen the ringgit. Singapore’s dollar has been strengthening for years through an informal peg to the US dollar which is adjusted, mostly for a stronger Singapore dollar, periodically. Otherwise, inflation and erosion of real income will always be a problem in Malaysia. A weak currency is always a subsidy for exporters, most of whom do not share their good fortune with their workers.

• Improve productivity. Provide incentives for automation and improve the quality of the workforce. This brings us to the next point.

• Improve educational standards. This is the surest way to improve the quality of the workforce and eventual output at all levels. Our educational system needs a major overhaul.

• Control migrant labour. Employers will groan but it is high time they improved labour productivity instead of relying on cheap imported labour which depresses local wages.

• Revise the minimum wage up by at least 10 percent a year for the next five years to narrow income gaps. Again this will ensure that productivity will increase as the industry will automate and train the workforce for greater productivity.

• Re-impose GST to raise revenues. Goods and services tax can be reimposed with exemptions on vital goods. Previously some 200 goods and services were exempted from tax to alleviate the poor’s suffering. Despite the removal of GST, prices never dropped before showing the lie that GST caused prices to rise.

• Subsidy rationalisation to cut expenditures. This can be done without alienating the have-nots by paying them cash grants with the money saved. Fuel subsidies alone come up to over RM30 billion a year, benefiting mainly those who can afford to use a lot.

With better revenue streams and needless expenditure eliminated, the federal government will be better able to spread spending around to the least developed areas and raise living standards. Instead of playing politics, the federal government should help all states with reasonable projects, infrastructure etc to ensure fair and equitable development. If it’s good, the states are unlikely to decline them.

For too long we have been tied to race-based solutions. The simplest way around this is to help everybody. The Malays and other bumiputera are the most disadvantaged - if you help everyone who is disadvantaged, they will be helped the most. There is no need to discriminate. Make it all-inclusive, that is the way to get support from everyone. And the Madani government have just four years to show something.

Harapan-BN and their partners have a clear majority at the federal level for the next few years - they have the mandate, and there is no need to sign any pact with anyone. The question is can they use it wisely? If they don’t, PN will make further strides ahead come the next elections.

It is good for Malaysia that Harapan-BN is under great pressure to perform. And the wisdom of the electorate is again demonstrated at the polls. They must rise to the challenge or eventually perish like Umno before them. They should because they can. Why waste this golden opportunity? - Mkini

---

P GUNASEGARAM says nothing is gained without some risk taken. Playing safe is often the least palatable option.

The views expressed here are those of the author/contributor and do not necessarily represent the views of MMKtT.