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'It's the (Malaysian) economy, stupid'

It is the economy that Malaysians are most worried about, not whether nurses' uniform is appropriate or not.

Yap Long Chuan
4 minute read

"It's the economy, stupid" was a popular slogan used by former US president Bill Clinton in the 1992 presidential election. It was mainly targeted at workers' growing resentment over the state of the economy, despite incumbent George Bush Sr's growing popularity following the first Iraq war.

The slogan resonated with the US voters, and Bush was given the boot as voters gave more weightage to issues championed by Clinton, such as jobs, inflation and the economy, than the country's geopolitical interests.

The Madani government could well learn from this US experience. In fact, historical data shows that every time our economy hit roadbumps, the ruling government suffers electoral setbacks.

For example, the watershed 1969 general election, where the alliance lost its two-thirds Parliamentary majority, was held on the heels of economic turbulence. More recently, the 2008 general election where Barisan Nasional (BN) again lost its two-thirds majority, was held soon after the US subprime crisis, which sent economic shockwaves around the world, including Malaysia.

Fast forward 10 years later, issues like 1MDB and corruption only helped to infuriate voters already trying hard to make ends meet amid a global slowdown and intensified globalisation that threatens to upend global economic orders. 2018 was also the year BN lost power for the first time after 61 years.

What kind of bearing will the economy have on the outcome of the upcoming elections in six states? While many say that the "3Rs" (race, religion and royalty) will colour the polls campaign, to me, these are all just "side shows".

What this election comes down to is bread-and-butter issues like jobs, inflation, the overnight policy rate (OPR) hike and subsidies. The prolonged war in Ukraine, the interest hikes in the US, the frosty US-China trade ties as well as climate change, weigh heavily on the Malaysian economy. 

There is much pessimism as investors and businessmen get jittery over the lack of economic direction from Prime Minister Anwar Ibrahim's administration. Sadly, almost nine months after Anwar took over as prime minister, his administration does not have much to show as far as the economy goes.

One of the most pressing concerns is the ringgit's freefall. As a major importer of food and other essentials, the ringgit's depreciation means dearer food, among others. Parents who have children studying abroad are also feeling the pinch.

The question is, what is the government doing about it? Unlike 1997 when the then prime minister Dr Mahathir Mohamad pegged the ringgit to the US dollar, we currently do not see any structured, out-of-the-box solutions to tackle this problem. Is Anwar too busy to manage the finance ministry, which he also helms? Or is he attending too many events, like dialogues with students ahead of the state elections?

The government had said that the hike in the OPR was to curb inflation, partly brought about by our weak currency. But it would appear that the reverse is true. Prices of goods and services are still gravity-defying, and I suspect this could be due to businesses passing on the increase in operating costs due to the OPR hike to the consumers.

Why is it that the government has not come up with any mitigating measures for those adversely affected by the OPR hike? Can the government not allow targeted withdrawal of Employees Provident Fund (EPF) savings, such as for those who face eviction due to being unable to pay rent?

And what of the economy as a whole? What grand masterplan does this Madani government have to lift Malaysia out of the doldrums to become a dynamic and competitive global trading nation?

The government does not even have a plan on how to wean this country of subsidies beyond grand pronouncements like withdrawing subsidies for the T20 in the future. Does the government not realise that the T20 is a wide band and that they contribute the largest chunk of taxes to the national coffers?

Households earning RM11,000 (which are considered T20 by the government's definition) in the Klang Valley are struggling to survive with the dearer costs of living there. What is the justification for withdrawing subsidies like electricity and petrol for those at the lower end of this band? Did the government think it through before making such grand pronouncements?

Let us not get started on how this government plans to prepare the nation in facing the onslaught of globalisation with megawaves like Artificial Intelligence, Big Data and biotechnology sweeping across the globe. Anwar appears to be too busy campaigning for the crucial state elections, going by the number of engagements he is attending.

Does this government have a sustainable and workable solution to bridging the yawning income gap between the haves and have-nots? The gulf will only widen as technological progress gathers pace and globalisation becomes more intense.

Unfortunately, Anwar's solution was to ask Malay tycoons to donate their wealth to help those who are in need. Is this how the one-time "best finance minister" handles the economy?

If Anwar is serious about holding on to Putrajaya, he needs to get down to basics. It is the economy that Malaysians are most worried about, not whether nurses' uniform is appropriate or not.

And if he does not urgently address these concerns, the voters will, as history has shown in the past, whether in Malaysia or elsewhere, give his government the boot.

The views expressed in this article are those of the author(s) and do not necessarily reflect the position of MalaysiaNow.