A strong team for economic reform

The Cabinet reshuffle has been wider than many expected but has put strong leaders in all the main ministries dealing in matters that have an impact on the economy, setting the foundation for pre-election economic reform.

It is all change in the main ministries that deal with matters that affect the economy, except for the top two posts at the finance ministry that will be strengthened by Liew Chin Tiong on the team.

It is good that these appointments have been finalised because it ends uncertainty and provides leadership ahead of a possible election in 12 to 18 months.

Both Johari Ghani and Akmal Nasir are the right fit for the investment, trade and industry ministry (Miti) and the economy ministry respectively given the current economic challenges.

Akmal may not be a high-profile figure but since the economy ministry is a policy development centre rather than an implementation apparatus his appointment might suggest a reversion of the ministry’s role to what it was before Rafizi Ramli gave it a higher profile.

For the next few years, the economy ministry must raise and highlight its thought-leadership role and should be run as the government think tank, sandbox and centre of excellence.

It is missing these opportunities and requires a senior, non-politician or non-civil servant to take this on. There is a great need for better think tanks and fresher ideas for reform than we have in the current eco-system.

As the new economy minister, Akmal’s priority should be to introduce new policies to address structurally low incomes and the pension crisis. These are major areas that need attention but have been overlooked.

At Miti, Johari has two main focus areas, investment and trade.

On investment, the priority will not only be maintaining high foreign direct investment (FDI) but also revitalising domestic direct investment (DDI), which is languishing.

Johari has a strong business and finance background and is well-regarded so that will be enough for this role.

On trade he should push to extend the tariff cuts offered to the US under the Agreement on Reciprocal Tariffs (ART) to all trading partners in return for cuts to their tariffs.

More importantly he must push for removing non-tariff barriers under ART and again extend them to other trade partners. It will be a big mistake to try to delay or unravel ART by taking a protectionist stance.

Steven Sim will be missed at the human resources ministry where he succeeded in introducing some positive reforms, most recently the 24-hour employment insurance coverage.

His successor R Ramanan must focus on the minimum wage review, labour law reform and extending the progressive wage programme. If he is ambitious, he could focus on reforms to HRD Corp but that will be a big call.

As entrepreneur development and cooperatives minister, Sim should focus on cutting red tape, rationalisation of interference for SMEs and providing as many tax exemptions as possible to help with cash flows and investment.

It is also good that Adam Adli has been appointed deputy higher education minister. He will bring some youth into the ministry with a good perspective on the needs of students.

This is overlooked too often. He has been challenged to reform PTPTN and there are lots of ways he can do this.

All the new ministers have to deliver positive economic benefits if the unity government partners are to be successful at the next election.

Early signs that the new appointments are working will be if we see actual, clear policies implemented on the key priorities. If we see a lot of events and reports this is not a good sign.

With good advice, a new portfolio of fresh policies and reforms and with possibly RM20 billion in savings from subsidy reforms the economic ministers led by Anwar Ibrahim as finance minister should be able to provide a raft of popular polices and a bumper election-winning budget next October. - FMT

The views expressed are those of the writer and do not necessarily reflect those of MMKtT.