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Malaysia Has A Unity Government Now. What Will That Mean To Its Economy

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ByThe Editor's Desk
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What is a unity government in the context of Malaysia? According to The Star, a unity government is formed by a coalition of parties that can comprise several main blocs alongside smaller parties. Within it, parties from opposing sides of the political divide can form a government and govern together. It is a unique power-sharing structure that is formed when no single bloc gains a sufficient majority to form a government.

300th recently asked for some opinions from several professionals and business owners in Malaysia about it and how the country’s economy will be affected by this development. Here are what they have to say.

Lee Yat Thong

This is my take on the reality of current Malaysia with the recently hung Parliament. It is an inevitable reality that a unity government is set to rule the nation. How will the economy pan out with this sort of government in place, will it help or otherwise? The government leadership vacuum is now filled after a few days without one since there is no outright majority winner in the general election. No organisation can perform and achieve its goals without stewardship in place, and that includes a nation; stewardship is a nonnegotiable must.

Under the present constraint, a unity government is the next best alternative. A unity government is not bad however few strategic considerations must be met that fit any functioning government. The role and responsibilities are; the socio-economic development of its citizens by ensuring,

  • the ingredients for a better life are accorded to citizens,
  • that there is a constant flow of opportunities to prosper,
  • the spiritual and mental health of the people are part of the social-economical developments,
  • that the nation is ready to compete regionally and globally by harnessing the human capital of the nation.
  • the evolution of national identity and pride to give the nation the emotional capital cum psyche.

The first task of the appointed cabinet members is to get to work, laying out the strategic objectives and plans to get the nation moving forward, reconciliation efforts to galvanise the citizens that it is a co-creation of a better future for all, by all and with all. The good thing for a workable coalition will be the wider availability of talents and appropriate human capital to develop the nation, in particular the economy. We need the technocrats and the experts to work on building solid economic foundations for the prosperity of the nation. This is attainable with a mutually supporting coalition. With a coalition of diverse expertise and thinking capacities to do the work, the days we know all are long gone.

The areas that the coalition has to work on our multiple however top of my list are,

  • STEM education is the funnel to feed the future needs of a digitally driven global future. People development has to take top priority.
  • DEI initiative that will preserve and retain talents to develop the nation.
  • Dual strategic initiatives to drive production and consumption as the engine of growth for the nation.

What the nation can ill afford in any coalition is,

  • Jockeying, manoeuvring for positions and perks resulting in excessive sponsorship to win favours and support to maintain the coalition yet not functioning as one.
  • Watching the enemies within rather than working together to win competitions and make life better for the citizens.
  • Politics becomes the order of the nation rather than managing and developing the nation resulting in stagnancy or worse regression.

The reality for any coalition formed is, the nation sits in a growing competitive Southeast Asia region with the promising economy of Indonesia, Singapore, Vietnam, and the Philippines edging forward to fight for FDI, which is one key socioeconomic development for developing economies of ASEAN. We need both political stability and maturity to be an attractive FDI destination as politics, economy, social, legal and environment play a key role in the PESTEL evaluation of a country’s attractiveness for investments.

These are the domains of a functioning unity government, and this is what a ruling coalition has to do. The coalition has to have the keys, the attractive value-adding strategic initiatives, the human assets, and the national mindset for a digitally driven economy. We can’t afford to lag behind in any measure for FDI. FDI is a crucial enabler for a production cum consumption engine of growth.

The coalition has to behave like a corporation that thrives on talents, performance, competencies, policies, systems, and structure that deliver its promises, better days ahead be it economically, socially, and spiritually for its citizens and businesses. There is no other way forward except on these premises.

What we need is a strong coherent ethical coalition with a strong moral compass and an ethical True North. They must build a Malaysian Malaysia Dream like how Xi Jinping built his China Dream to galvanize the nation strategically to be a key global economic power. We need a Malaysian Malaysia Dream. We need a coalition that can do that to be our chosen coalition government. It is not impossible when the political will is strong within the coalition to do it for the nation.

This is why our tagline is “Malaysia Boleh”, literally meaning “Malaysia Can”.

Afiq Hazman

On the backdrop of global recession, steady hands at the helm are much needed to steer the country The success of any coalition government rests on a few key factors. Any combination of the coalition must represent the majority of rakyat interests in Malaysia, as divisive politics and policy would ultimately impact the delivery of national development plans. The unity government would benefit from a bigger pool of talent across various parties. They should use this advantage to select better candidates to drive various portfolios in the government.

More policy and fewer politics, please. The unity government must agree on a framework based on a cohesive budget and clear economic policy, in consultation with their partners. If they’re able to execute this, we would be looking at Malaysia which is more inclusive, enabling the country to unlock economic potential in other states, aside from just Klang Valley. A major shift in economic priorities is unlikely though, as Malaysia have resilient economic foundations, connected with major economies globally, yet we will see the significant quality of each progress.

There may be measures introduced to support impacted sectors as the recession loom, and also a shift in development priorities depending on the focus. The business community should approach them constructively, to ensure the right environment and ecosystem could be fostered for the economy to thrive. However, as the overall stability of the power structure may tip, adopt a cautiously optimistic approach to further investment and expansion.

We aspire to have a government that is able to chart a clear trajectory — continuation of previous development plans rather than a total revamp to provide much-needed stability for the economy and shared prosperity for all.

Lance Cheang

Then it comes to be that the soothing light at the end of your tunnel, is just a freight train coming your way.

To quote Metallica, this neatly sums up what I think this whole election cycle is coming towards. While I understand and accept democracy is slow, cumbersome, and tiresome, there’s no doubt that markets and the economy don’t take kindly to ambiguity and instability.  

I do not envy the new government; they’ve got their work cut out for them. Already we’ve seen markets trending downwards in past months leading up to the election, and with the looming global recession impending, the signs aren’t promising for our once-called Asian Tiger country. I look enviously over at our neighbouring country’s leaders wishing we can rise above petty self-serving politics and have leaders truly with nation-building at heart. 

In a week when President Jokowi successfully hosted the G20 summit and attracted a slew of foreign investment into Indonesia, our leaders were busy mudslinging and drumming up old rhetoric and hate speech. In the week Singapore hosted the who’s who in Fintech at the Singapore Fintech Festival, our leaders were busy squabbling over parliamentary seats. At a time when a firm and steady hand is needed to steady the ship already teetering on capsizing, more confusion ensues with this delay on who gets the right to govern the country with no one really having the mandate.

All the past uncertainties are undoubtedly bad for business. Already we see many foreign investors shy away from our country and many local businesses starting to build their overseas presence (myself included) to be less reliant on our local economy to survive. And survival is on the top of the agenda for many businesses with the looming downturn impending. While one may think local entrepreneurs opening offices overseas is good for the country, it actually further dilutes the opportunities back home because not only will we have to employ foreign talent, but we also pay taxes to the foreign government. Much of which profits too will not be repatriated back to Malaysia due to the black hole in which Malaysian taxpayer’s monies go.

Talent too is fleeing the country in search of greener pastures. If there’s one thing Covid-19 taught businesses, it’s that we’re no longer bound by hiring local talent and our staff can come from anywhere in the world, if we can afford it. Global companies have been snapping up in-demand Malaysians, paying foreign rates but allowing these employees to work from Malaysia. Imagine earning in US Dollars while spending in Malaysian Ringgit. Any good employee in their right mind would make the switch in a heartbeat.  It’s great for consumer spending, but terrible for local businesses already starved for affordable talent. The argument of Malaysian businesses too can hire foreign talent, but have you seen the MYR vs USD rates lately? Even with the most recent appreciation, why would a foreign talent work for Ringgit Malaysia when they too can work for the same in USD?

For Malaysian businesses to survive globally, we need clear, firm, and decisive policies to shore up investor confidence to allow investments to flow into our country, not out. We need leaders who are willing to go out to the world to attract investment and talent. Our natural resources will only last us so long, we need to start thinking beyond oil, palm oil and logging revenue. We need our leaders to effectively sell to the world we’re worth investing in and their money is not at risk of disappearing in bureaucracy. We need leaders to stand up for what’s right for the nation, not for themselves or their political parties.

We could just start with a few things.  

  1. Choose leaders based on merit, and not on anything else. A leader needs to know what to do or at least employ people who do and not be surrounded by yes-men contented by feeding off the scraps handed down to them. 
  2. Our leaders really need to be strong English orators to captivate the international audience; instead of trying to convince others what to speak, it would help a great deal if they could try convincing others what makes Malaysia such a great place to invest in.
  3. Our leaders need to actively seek speaking opportunities globally to promote our country, instead of organising local press conferences to argue who has enough SDs.
  4. Offer incentives to retain talent within Malaysia to help local businesses.

Perhaps now there’s hope that we have a new government worth it’s salt to regain Malaysia’s standing on the world stage. Time to roll up our sleeves and get cracking.

Azleen Abdul Rahim

The recent political development in Malaysia gave me one big sign—the people of Malaysia have won. The voters choose to vote for the representative and not the party. When the situation became hanging, the politicians need to sort this out among themselves. It also forces everyone up there to wake up from their comfortable environment and start working. And more importantly, they voted out corruption.

To me, this form of government is better than a government that is controlled by a single party or pact. In the unity government, there shall be tighter checks and balances and I believe this will be more impactful than government versus opposition. The individual cabinet ministers, their pacts, and their parties all will now work harder than before to give back to the people what’s long overdue.

The government will no longer be on the other side. The government now will be on the people’s side. And this is a good thing. Why? The situation is exactly similar to when an employer takes good care of its employees. The company will prosper in the end. In this case, Malaysia will definitely prosper when the people are happy. That’s my logic.

Kanimoli Ramaiah

Inclusivity. Inclusion of all layers of the rakyat in the programmes which are designed to steer the country out of the economic doldrums. Inclusivity, too, needs to be incorporated into every component of the economy – financial, technological, digital and social economy. Of course, with the inclusion of sustainability and food security.

Each political party that had contested would have addressed different issues that were faced by the people of the country, but no party would have been able to address all the issues that are plaguing the rakyat. Thus, a unity government would be able to bring forward those unaddressed issues to the fore for further action – issues that may seem not as important but could have a deep impact on the economy if left unattended to.

Let’s look at a small example. While farming has been modernised, we do have aged farmers with a wealth of knowledge and farms full of crops. They may not be able to harvest their crop due to their physical condition and bring them to the market or even have accessibility to online selling platforms given that they may not be technologically savvy, too. 

A unity government, through the relevant ministry, should be able to identify these groups of farmers who have deep knowledge in cultivation and planting to first, preserve this knowledge for future use. Not everything can be totally modernised. The fundamentals and basic planting tricks would always remain.

Secondly, they can be encouraged to pick up some digital skills while using their phones. These days, almost every person has a smartphone. The model that was used in India could be emulated here. In India, when the government decided to reduce the role of middlemen in the sales of agricultural crops, illiterate farmers were given different types of devices to place their crops for sale on dedicated platforms. Instead of the usual keyboards, those devices had pictures. With the introduction of digital payment, soon farmers who were earlier dependent on middlemen to sell their products could deal directly with their end customers. 

Thirdly, online sales platforms and marketplaces which provide these farmers with access to their customer base should be given incentives (preferably, non-monetary) by the government to ensure that they continue their social enterprise-like programme for food sustainability and security. 

The Prime Minister and his cabinet would not have access to similar needs of the rakyat unless there is a mechanism that could bring to the fore these needed improvements. A unity government comprising multiple parties which would have different grassroots support is highly likely to know these issues that need to be addressed to ensure inclusivity in the country’s economic developments.

Inclusivity need not rest on the government alone. It can also be carried on the basis of PPP – Public Private Partnership, giving a deeper meaning to the entire initiative and inclusivity.

Juanita Johari

Dato’ Seri Anwar Ibrahim’s appointment as the new Prime Minister gave fresh hope to fellow Malaysians. When the country was faced with what seems like endless political turmoil since 2020, hope was ever fleeting. GE15 was either going to reinforce the notion that we are heading towards systemic failure, or hope will spring eternal in that we finally will have the stability that will propel the country further.

We saw Bursa Malaysia record its highest one-day gains and the strengthening of the Ringgit upon the announcement of his appointment. This signifies the strong confidence of investors towards his leadership and the administration of the unity government that he was tasked to form and lead. For the general population of Malaysia, he is seen as the right man for this behemoth task to pull the nation out of the slump.

His wisdom and calmness in bringing together factions of differing priorities provided a sense of confidence to the rakyat. Having support from the Borneo Block enhances the diversity that already exists in Anwar’s Pakatan Harapan, thus, we expect inclusivity in the policies that will be formed. The immediate challenge would of course be decided on his lineup to helm the different ministries, especially with the demands of equitable distribution amongst the main parties making up the unity government. The right appointment will be a signal to the market that the PM means business and this will go a long way to provide a sense of stability to the nation. 

Once the unity government is up and running – what can be expected? On his first day on the job, he mentioned a primary issue that needs to be dealt with immediately and I hope that the unity government will find a common ground in picking out the promises in their manifesto, for a combined approach and set clear targets in their implementation and urgency. 

There will be expectations for the government to be more pro-business and efforts to implement reforms to reduce bureaucracy, with a strong will to root out corruption. Businesses will have more certainty in the cost of doing business in Malaysia and this will lead to a better environment where they can thrive. If the government can assure foreign investors that Malaysia has regained its stability, it will serve as a catalyst to attract more investments into the country. And that means a bigger share of the pie for all.

I hope that the appropriate ministries will also look into issues plaguing the rakyat. We have seen too much lip service, over-spending of ministries and big projects that only benefit the politicians. With the combined approach, it will benefit the population with better job opportunities and improved living wages in our aim towards a high-income nation. 

I see this as an opportunity for us to press the reset button for Malaysia, to allow Malaysia to take a leap towards regaining her potential and to roar again like the tiger we all know she can be.

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