A year ago, the political coalition which governed the country for more than sixty years was toppled by frustrated Malaysians. The historical win surprised even the victors themselves which was cobbled together in haste to form the coalition.
The win stunned the world and rocked the financial markets, with investors selling down Malaysian stocks, bonds and currency following the outcome. But, Malaysians were optimistic about the future under the rule of Pakatan Harapan – “the alliance of hope”.
With optimism comes expectations
“When Pakatan won the election, there were a lot of raised expectations,” says Harrison Cheng, associated director and lead analyst at Control Risks. Malaysian expected reforms in areas such as economic management, governance and anti-corruption efforts.”
But, Malaysians are disappointed, as one national poll shows. The latest survey by research firm Merdeka Centre finds that the approval rating of the new government plunge from 79 percent in end of May 2018 to 39 percent in March 2019.
Tony Pua, a member of parliament from the ruling coalition, tells CNBC “I think it is understandable that people are not happy because they’re expecting, or they have very high expectations for, an immediate turnaround in the economy which is not possible given the current economic climate around the world.”
Public sentiment with the Prime Minister Mahathir Mohamad also plunge from 83 percent to 46 percent, according the same survey. The survey finds 58 percent of Malay respondents said Malaysia is heading in the wrong direction under the new government. Their doubts on the Mahathir administration have resulted in the government reversing on several decisions such as the pledge to ratify a United Nations convention against racial discrimination.
According to economists from consultancy Capital Economics, the government made a mistake to abolish the Goods and Service Tax (GST). The abolishment led to a major deterioration in Malaysia’s fiscal position. This led to Malaysian stocks being the worst performing in Asia this year.
But all is not lost, says Cheng of Control Risks. The change in government has ‘generally been good’ for the country. The coalition has taken steps to improve the independence of several public institutions, including the Malaysian Anti-Corruption Commission, which would benefit the business climate. These are important institutional reforms undertaken by Pakatan.
In addition, according to the Institute for Democracy and Economic Affairs, a Malaysian-based research firm, the government has done reasonably well in delivering promises outlined in the election manifesto. It includes plans to tackle corruption and the improvement is evident in “the transparency of the budget and the government’s overall financial situation.
“Reforms will take time, reforms will take a couple of years,” says Pua, the member of parliament.
“But, we believe that the economy will turn around, we believe that once we get out fundamentals right again, once we get rid of the corrupt practices of the past – over time the economy will only get better,” he adds.
Despite the plunge in the approval ratings, many Malaysians are willing to give Pakatan Harapan time to find its footing as government, according to Merdeka Centre. 67 percent of voters agree that the government needs more time.
Tan Sri Rafidah Aziz urges Malaysians to judge and evaluate the Pakatan Harapan government, only after its five-year term is over. We must allow the full run of the five years before coming to any judgement and evaluation of the Pakatan Government.