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PH's challenges

  • The many old problems plaguing the country must not be neglected and must be looked into soonest.

By LIM SUE GOAN
Sin Chew Daily

Tun Dr Mahathir Mohamad said he would not be always popular and might become unpopular one day.

The prime minister's statement has highlighted his unusual political wisdom. Indeed, it is impossible for Pakatan Harapan to keep coming up with policies that will please all Malaysians.

Although Tun Mahathir and PH are way more popular among Malaysians than Najib and Umno now, one day Malaysians will have to come to terms with the reality, and it is not easy for PH to keep the "feel good" euphoria all the time.

As a matter of fact, the one-month old Pakatan regime is already facing some severe challenges and tests, and problems will keep popping up.

First and foremost, the local stock and currency markets have plummeted since GE14. Bursa has lost 8.35% or 151.49 points as of last Thursday, sliding below the critical 1,700-point psychological level. Meanwhile, the ringgit has breached the 4.00 mark against the greenback. The fall could be blamed on the market shock from the new government's debt announcement, followed more recently by the Sino-American trade war and US interest rate hike.

Foreign investors have fled emerging markets since the beginning of the year, with almost US$19 billion divested from India, Indonesia, the Philippines, South Korea, Taiwan and Thailand, the biggest such exodus since the 2008 financial crisis. Asian currencies have also trended lower against the dollar during the period.

So, the bearish market in recent weeks is best described as the consequence of a global phenomenon, and should therefore not be blamed wholly on PH government's revelation of more scandals involving the previous BN administration.

As a trading nation, Malaysia is highly vulnerable to trade wars, especially the drastic drop in palm oil prices that once touched a two-year low of RM2,238 per tonne for September futures.

Even with 0% GST, relatively stable fuel prices thanks to government subsidy and improving consumer sentiment, KWSP has lost RM6.09 billion in its investments in ten public-listed companies due to the sliding local currency and market turmoil. This will not augur well for the country's long-term economic recovery.

While the government is powerless in dictating external factors, domestically it will have to come up with positive policies and encouraging news in order to stabilize the markets.

Investors prefer a stable and predictable investment environment. Their exit from Malaysia does not mean they are supporting the corrupt ex-regime but because of the uncertainty and unpredictability in the local economy. PH will need to introduce and explicitly announce its economic policies in order to restore the confidence of foreign investors.

Secondly, internal conflicts within PH will gradually erode the public's faith in the new government, and it must therefore strive to strengthen mutual communication in a bid to dissolve any differences.

For example, PKR de facto leader Datuk Seri Anwar Ibrahim feels that Finance Minister Lim Guan Eng should speak more cautiously because his statements could impact the market. He suggested that Lim should instead concentrate on rebuilding investor confidence and not create unnecessary alarm by announcing himself the irregularities of the previous BN administration.

Lim defended by saying he was doing so at the PM's instruction.

Obviously there are dissident voices and conflicts within the ruling coalition. As such, the PH presidential council should meet more frequently to map out the country's roadmap while clarifying the role to be played by Anwar.

Given the equal partnership of all the four parties of PH, differences are inevitable. Operational efficiency will be affected in the absence of common understanding.

Thirdly, how is PH going to satisfy the escalating demands of the public? Suaram, for example, has asked the government to lift the bumiputra quota although it is unlikely for PH to meet this demand because any drastic policies on bumi quota will have a destabilizing effect on the politics.

PH may need more than a hundred days to honor its ten pledges, but this aside, the rakyat also want to see things are back on the right track as well as announcement of the complete cabinet line-up as soon as possible.

While it is very important to investigate the 1MDB scandal and plug the loophole in the country's wealth, the many old problems plaguing the country must never be neglected and must be looked into soonest.

 

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