Pakatan Harapan leaders
Pakatan Harapan leaders, who made history on May 9, must ensure that history is made in Malaysia in the next five years to rebuild a New Malaysia with systematic and institutional reforms accompanied by mindset changes. The perspective of the new government based on its election manifesto has already received criticism as a populist policy because of the promised abolishment of GST, introduction of subsidies, write down of loans for the Federal Land Development (FELDA) settlers, abolishment of toll for highways, and deferment of repayment for student loans. Perhaps some insights can be gleaned from the events during Mahathirs earlier tenure as prime minister between 19812003. The period prior to the mid-1980s crisis was dominated by a push toward heavy industry championed under Hicom, a Malaysian company, which included the automotive, iron and steel, plastics paper products and machinery, transport equipment and building material industries. The petrochemical sector was advanced by working with foreign partners who would provide technical knowledge, but with capital coming from the state. In short, this was a departure from previous fiscal policy and sought to accelerate the new economic policy (NEP), i.e. macroeconomic policy activism, such as a rebalancing the wealth in the country in favour of the majority Malay/native population. However, commodity prices collapsed in the 1980s in response to chairman of the United States Federal Reserve Paul Volckers fight against inflation, which caused interest rates in America to rise significantly. As such, major Malaysian commodities such as rubber and tin suffered the same fate and, as a result, Malaysia faced a twin deficit current account and government budget during that period. In 1985, the Malaysian economy contracted by 1 and grew by a meager 1.2 in 1986. Furthermore, non-performing loans (NPL) at banks rose above 30 due to a wide number of corporate failures. One of the hardest hit companies, Hicom, lost approximately USD100mil. Finally, the stock market crashed due to the Pan El Crisis. The government led by Mahathir responded with a series of adjustments, which included Contractionary fiscal policy. Relaxation of NEP such as Investment Coordination Act, which was made only applicable to investment above USD1mil and businesses with more than 75 employees. Importantly, free trade zones were created in which there was exemption from NEP policies on ownership. Budget deficit reduced and managed a current account surplus. Introduction of the Banking and Financial Institutions Act (Bafia), limiting exposure to foreign exchange (FX) borrowing, which allowed critical policy flexibility in 1997 during the AFC and related party loans. Appointment of private sector chief executive officers (CEOs) to government-owned companies, which had mixed results, as illustrated with the winding up action against Perwaja Steel in 2017. Boosting foreign direct investment (from less than USD500mil in 1986 to USD2.3bil post-reform) and the promotion of services, e.g. tourism such as Visit Malaysia Year 1990 and efforts to reduce current account deficit from the services sector through the use of local ports and domestic transportation. The result foresaw a period of extraordinary growth, low unemployment virtually full employment and low foreign debt up until the AFC. Extraordinarily, the government ran a surplus budget during that period. Many of the suggested policies in the PH manifesto can improve the economy by greater competition and breaking up monopolies, which will return higher tax revenue in the longer term. Similarly, better utilisation of existing infrastructure, as well as building high-quality infrastructure assets such as high-speed railway between Kuala Lumpur to Singapore, would be an impetus to economic growth. The role of the state in the economy and options for privatisation could be revisited dealing with issues of crowding out and unfair competition. While reforms may be beneficial to the economy, it can be rather difficult to implement the policies due to substantial resistance from powerful elites. The record claimed in the Penang and Selangor state governments could give reasons to believe that savings can be made, as the current national government has these component parties administrating the country. Although these claims have been contested by the state opposition in Selangor and Penang, there is no doubt given corruption scandals like HYPERLINK http//graphics.wsj.com/1mdb-decoded/ t _blank 1Malaysia Development Board(1MDB) that there is huge potential for savings. For those involved in transformation or change, one of the best approaches is to take radical steps. In that vein, if revenue is reduced, it will automatically force the government to cut expenses. If such radical steps are not taken, there will be continuous procrastination in removing wastage and initiating efforts to ensure the deficit does not worsen. We must never lose sight that Pakatan Harapan at the Federal and State level, where we are also State Governments, must be always be a government for all Malaysians, regardless of whether they voted for Pakatan Harapan or otherwise that we must truly serve all Malaysians, regardless of race, religion, region or politics. We want to build a New Malaysia which is united, democratic, just and progressive. For a thriving democracy, we must operate in a new political environment and culture where checks and balances are institutionalized in our system of governance. We just accept as our responsibility the challenge to promote democratic processes, not only ensuring that there are check-and-balance mechanisms within governing parties but also by the Opposition, the media and the civil society. We will not harass and persecute the Opposition as we had suffered in the past 52 years, for this will be against our beliefs in a democratic society. Whether UMNO and the other Barisan Nasional parties which suffered their first national defeat in the 14th General Election can reform themselves to become effective opposition parties is still to be seen, but Pakatan Harapan national and state governments must recognize the role and contribution of Opposition parties and dissent in the country. Therefore, many Pakatan Harapan supporters are giving Mahathir a chance to prove he has changed his spots, after his marshalling of the disparate coalition parties and his popularity with rural Malay voters helped them to win the election against great odds. They say he must maintain the reform momentum in order to keep together his coalition, which includes his Malay-dominated party of Umno defectors, Anwars Peoples Justice party and the ethnic Chinese-dominated Democratic Action party. The new government has made a good start but theyre facing a huge task, particularly in terms of legal reform, says HYPERLINK https//www.irishtimes.com/topics/topics-7.1213540articletruetag_personSevanDoraisamy Sevan Doraisamy, executive director of HYPERLINK https//www.irishtimes.com/topics/topics-7.1213540articletruetag_organisationSuaram Suaram, a human rights group. Suaram is one of several organisations that waged a decades-long battle to stop the Umno government and the police using vague laws to crush dissent. Last year alone, his organisation documented 155 cases where people faced legal action that violated their freedom of speech and recorded 280 cases of detention without trial under heavily criticised laws. Doraisamy and other activists want the government to institute an immediate moratorium on the use of such laws, before they can be amended or repealed when parliament returns in the next few months. Mahathir showed his new colours by using Twitter to rebuke the police for arresting a man who criticised him on HYPERLINK https//www.irishtimes.com/topics/topics-7.1213540articletruetag_companyFacebook Facebookand promising to review the relevant law when parliament convenes. Y, dXiJ(x(I_TS1EZBmU/xYy5g/GMGeD3Vqq8K)fw9
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