More than a year ago Malaysia was one of the most thriving economies in South East Asia. More than ten years of continual growth that came to a halt after the last general election on May 9th, 2018. Growth along with low public debt made Malaysia one of the ideal destinations in Asia to invest in. Malaysia was also making its mark producing solar panels, biotechnologies and being the third largest shared service hub in the world.

One year on, the country is a shadow of its former self. Growth has halted. Foreign investors are pulling out. The stock exchange has plummeted to record lows from a record high by just one year.

A New Malaysia

When Malaysians went to vote one year ago there were many things on their mind. Many were tired of the rising cost of living. Others were worried about jobs and education. Some were worried about the growth of the country they felt was slow. Some others were worried about ongoing issues such as 1MDB or Malaysia Agreement 1963. The majority were convinced that the cumulative fact was Barisan Nasional was simply at the helm far too long and the Pakatan Harapan coalition could provide a better alternative. Pakatan Harapan too had a shiny manifesto that promised the world and beyond to the voters.

To surprise to many, and including Pakatan Harapan, GE14 was a turning point with Barisan Nasional demolished. Pakatan Harapan government now led by former prime minister Tun Mahathir Mohammad started with what a mess the country was in.

1 Trillion debt

Immediately after the election among the first speeches as prime minister and finance minister, Mahathir and Lim Guan Eng started talking about the bad shape Barisan Nasional left the country in. They went on about RM1 Trillion debt and launched the Harapan Fund. While this shocked the public into donating for the fund, it sent shockwaves to the investment community as the official debt to GDP was only 51.8%. While Malaysians were focussing on donating to help “plug” the debt hole, investors started pulling out of the stock market. The Harapan Fund accumulated over RM200 million. It was then announced the amount will not be used to service the government debt. Since then official Bank Negara Malaysia figures have validated what international rating agencies have suspected, that there is no RM 1 trillion debt.

Cancelling of major projects. 

In the weeks following the election victory, major projects such as High-Speed Railway (HSR) to Singapore and East Coast Railway Link (ECRL) projects were cancelled. Mahathir said the cost of the projects were too high. Lim Guan Eng alleged there was corruption involved with the China-based companies service 1MDB debt. Investors saw more instability coming their way. Since then ECRL has been reintroduced with major changes to the project with China owning half of the project and gaining thousands of acres of prime ECRL land along the route. The savings? A mere RM 10 billion.

Broken manifesto promises

Many, especially students and those from the lower income groups waited with bated breath for the new Pakatan Harapan government to remove tolls and reduce petrol prices. Students believed as well that their student loan, PTPTN would be abolished as promised. That did not happen. The massive RM 1 Trillion debt along with 1MDB was used as an excuse not to deliver the promises. Questions from the public were responded with snide remarks.

1MDB

Pakatan Harapan’s largest war cry for the elections was always on 1MDB. Former prime minister Najib Razak was quickly arrested and charged – not for stealing money from 1MDB but countless charges to unrelated SRC International. In fact, to date, there have been no changes on the key allegation that Mahathir still talks about today – that “missing” RM42 billion. It was also revealed during the Najib’s SRC trial is that the monies that were received into his accounts were “donation” from one Prince Turki and the Saudi government and he indeed returned the money. This was both confirmed by AmBank officials and reported to Bank Negara Malaysia.

However, it didn’t stop Pakatan Harapan government to bring up 1MDB to every speech and every political campaign in the past year.

Rushing on international conventions and treaties

Two conventions that are International Conventions on the Elimination of All Forms of Racial Discrimination (ICERD) and Rome Statutes were simply rushed through without public consultation and education. Questions were dismissed and this angered many resulting in massive rallies. Then they were overturned. Many were left wondering why the need to rush when Pakatan Harapan government could have spent a few years “softening” the public to the idea then ratifying them. Many also saw the Pakatan Harapan government delaying local issues such as issues with stateless Indians and enforcing Malaysia Agreement 1963 to favour these international conventions.

GST

The one thing that the Pakatan Harapan did do which international finance organisations warned against was the removal of GST and implementation of its poorer performing cousin, the SST. The GST brought in over RM40 billion in indirect taxes which kept the previous government stabled from low oil prices. To make up for the shortfall there has been a slew of new taxes including a digital tax starting next year. Even then the fiscal gap is about RM 20 billion, making rating agencies nervous. In comparison GST, generated about 18 per cent of government revenue.

Old friends and projects resurfacing

As soon as Mahathir become prime minister again old projects such as national car was brought back and along with it old “cronies” of Mahathir. Projects were handed out to Mahathir’s children blatantly – just as how it was when he was the prime minister the previous time. Recently Lim Kang Hoo who saved Mahathir’s bakery The Loaf was “rewarded” with RM 140 billion Bandar Malaysia project.

Where now Malaysia ?

The real question has been with all these mismanagement and lack of will is this: Is Pakatan Harapan simply giving each other high fives and patting each other’s backs while the country is suffering? It seems so with the newly minted ministers rating themselves highly.

One year on the coalition cannot keep using 1MDB or any other Barisan Nasional’s deficiencies as an excuse. Pakatan Harapan is a government of its own and thus responsible for the people. The country’s decline has been very noticeable even among the international community. Pakatan Harapan cannot keep making outlandish claims that makes everyone nervous. Facts and key performance indicators matter especially from the Finance Ministry.

Pakatan Harapan has lost three by-elections and in a recent approval rating done by Merdeka Centre, the government’s approval rating plunged to 39 per cent from 79 per cent. Only 34 per cent of the voters felt that the country was heading in the right direction.

Pakatan Harapan winning the last general election is not as important as its ability to run the government. With an ageing prime minister at the helm and a prime minister in-waiting Anwar Ibrahim, the confidence must be given to the public and the business community that it is more than a “1MDB engine”. Pakatan Harapan ministers too should stop thinking like opposition ministers they once were and be more “people friendly”. Pakatan Harapan’s current report card does not look healthy and if no changes are made, could result in it being a “one hit wonder” government. 

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