Taranjeet Singh
The Oxford Dictionary defines this term as being in “a state of perplexity or uncertainty over what to do in a difficult situation.” Many different feelings have been expressed since Malaysia’s 15th General Elections on 19th November 2022, including optimism, scepticism, concern, excitement, and, finally, a sense of “so what does this mean for us” as a Nation and a business community?
Voters, political analysts both at home and abroad, members of the Malaysian diaspora, and politicians have all weighed in on the events of the previous 24 hours, and their responses have been widely dispersed across the web for all to consume. And much of this relates to the permutations of the coalition that will give birth to the new Government. All is well and good, but what does it mean for the regular, neighbourhood businesses that are already having a hard time endeavouring to stay afloat?
Whilst we have yet to see a clear way out of this murky predicament as of the time of this writing, I am putting forward the following thoughts:
- Our Nation’s standing in the region and the world will be negatively impacted as a result of this uncertainty. This will have immediate effects on the value of the Ringgit. The current costs of conducting business are already high, and with this uncertainty, they will only rise.
- Investors, both private and institutional, will not be comfortable with the current climate of uncertainty. In the short and medium term, it will be fascinating to see how the local stock market responds to this as well as the flow of FDI into and out of the Nation as well as the rate of flow.
- Policy implementation will be affected immediately regardless of the final composition of the Coalition Government that will arise. The “more vital” ministries, such as Finance, International Trade, Education, and Transportation, will be greatly coveted by the coalition party leaders. This Author believes that the coalition parties will have an effect on the Government Linked Companies (GLCs) as well. Indeed, the chief executive officers of these organisations are political appointees and thus their continued tenure will be dependent on the behest of the Government of the day. The credibility of individuals to lead ministries, as well as state-owned entities, will be discussion points for some time to come.
- The administration of the newly formed Government will also directly affect policy shifts. The past few years have witnessed tremendous subsidies and handouts. Whilst this cash burn was expected and required to keep the proverbial lights on, the much-needed fixes to the way things are being done were not prioritised as immediate agenda items. The consequences of maintaining the status quo have been apparent in the form of decreased operational efficiencies and increased gaps between staffing levels and the productivity outcomes results.
This being said, we can but look forward to a brighter future filled with hope and aspirations. Where the upcoming Coalition Government is concerned the requirements moving forward are indeed very simple:
- Let us make sure that the right things are done for the right reasons, to proactively uplift the Nation as a whole. The benefits of any socio-economic development programmes or efforts, whether they are aimed at the economy as a whole or at a specific industry, must be seen and unequivocally felt by all.
- Avoid policies with an ethnocentric focus, as they serve only to exacerbate existing divisions and polarizations. Such demarcations by ethnic lines will only be a disservice to all. As we have seen in the past this has had implications on the effectiveness of businesses and the way they operate in our Nation. Let us not have a repeat of this.
- Provide a sense of overwhelming confidence and base comfort to all that a critical component that will drive business growth and sustainability are not just adequately but instead, is well provided for, namely that of human capital. To advance as a Nation and, more crucially, to escape the middle-income trap we have been stuck in for the past two decades, the Powers-that-Be will need to focus on job creation, job enlargement, value add, sectoral growth, and encourage and promote clear economic interventions.
- The need for responsible financing will drive business sustainability and will also firmly put into place the demands arising from ESG obligations. Today, more than ever, genuine social impact financing is essential. We need leaders for our country who are not only proficiently knowledgeable in these spheres but also willing to challenge the status quo of how they are able to better support the business environment as well as the area of social impact financing.
The above are only some areas for consideration as we contemplate the setting up of a Coalition Government for Malaysia and what it means for us as business owners. As more time is spent reflecting, even more areas will come to mind, and that’s perfectly fine. What is required are clear, impactful, positive, purposeful and decisive actions that will allow us as a Nation to overcome this quandary that we have suddenly found ourselves in.
Taranjeet Singh is CEO of Quantum Steppe Advisory and Chair of the Regional Board of the Chartered Management Institute (CMI) Malaysia. Taranjeet has returned to Malaysia after living and working in Central Asia for the past several years. For more information, you may email him here.
