Friday 29 Mar 2024
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This article first appeared in Forum, The Edge Malaysia Weekly on November 7, 2022 - November 13, 2022

After having learnt the lesson of taking election pledges lightly in the 14th general election in 2018, Pakatan Harapan (PH) unveiled a carefully scripted manifesto last week. It does not have unrealistic promises such as abolishment of toll collection or cancellation of student loans. The pledges are rather tame.

PH promises a reduction in toll rates with a view of returning the North-South Expressway to the people eventually. There is also the promise of reforms in the appointment of heads of key government offices such as the Attorney General’s Chambers, Malaysian Anti-Corruption Commission (MACC), police force and Election Commission (EC). PH also promises to amend the Federal Constitution to confer citizenship on children born to Malaysian mothers outside the country.

Barisan Nasional (BN) and Perikatan Nasional (PN) are expected to unveil their manifestos this week, after nominations have been filed. BN’s manifesto is expected to be anchored on stability, solidarity and prosperity. A new addition is that Umno president Datuk Seri Ahmad Zahid Hamidi has proposed three deputy prime ministers, with two positions allocated for Sabah and Sarawak.

As for finance-related promises, the coalition has already stated most of it during the tabling of Budget 2023, which has not been approved by parliament.

Among the goodies are a general increment in emoluments for civil servants in the lower ranks, financial assistance for small businesses and loan guarantee schemes amounting to RM45 billion — the last item being offered under a programme called Semarak Niaga to small and medium enterprises in sectors ranging from tourism to technology and oil and gas.

Budget 2023 also has a RM3 billion guarantee scheme for house buyers without a fixed monthly income. A similar scheme is also in the PH manifesto.

The PN manifesto is unlikely to deviate very much from what has been unveiled by BN and Pakatan. The only probable difference is that PN — being a coalition powered by PAS — could include elements that lean towards enhancing Islamic values.

The manifestos of the three main coalitions can be in any form or shape. Whether they would be held accountable for them after the Nov 19 polls is another story.

In the last four years, not a single coalition has commanded majority support to form the government. The permutations among the parties may change but the political turmoil resulting from the shifting support of MPs could remain after Nov 19.

Assuming that no coalition ends up with a commanding majority, it would be difficult to push through reforms, especially if they involve changes to the Federal Constitution. For instance, PH’s pledge to confer citizenship on children born to Malaysian mothers overseas cannot be fulfilled if it does not have a commanding majority in parliament.

Reforms with regards to the separation of the duties of the attorney general and public prosecutor will be difficult to implement. Even measures to get the heads of the MACC, police and the EC to be accountable to parliament will be difficult.

Such changes are only possible if there is a consensus among the bigwigs leading the three coalitions and Gabungan Parti Sarawak.

On the financial front, there really is not much that can be offered without further eroding the nation’s finances, irrespective of who rules Putrajaya.

The economic lockdown arising from two years of Covid-19 has stretched the country’s balance sheet. The federal government’s debt as a percentage of the economy is 61% this year, well above the limit of 55%. The federal government’s budget deficit is projected to be at 5.8% this year and 5.5% next year.

Generally, the population at large is used to getting direct financial handouts and subsidies, which will not allow the government to cut back on its spending.

Even government procurement has to be dealt with carefully if there is a change in government. In 2018, when PH took over, it slashed spending to bring down the budget deficit. Large government contracts were scrutinised with a view of reducing cost.

To be fair to PH, it inherited many procurement contracts that had been awarded to the private sector at inflated prices. Apart from higher costs, the terms were also not favourable to the government.

One of the first things that the new government did was to renegotiate these contracts with the view of cutting down on expenditure.

But the repercussions on the economy were severe. The projects came to a standstill and eventually, PH came to the realisation that most of the agreements were tight. The objective of bringing down costs was achieved but the impact on the domestic economy and delays that occurred outweighed the benefits.

Since 2018, Putrajaya has cut back on procurement. The only major project coming up is the Mass Rapid Transit 3 (MRT3), estimated at more than RM50 billion. The project started under the watch of caretaker prime minister Datuk Seri Ismail Sabri Yaakob and will continue with the current cost structure if BN remains in power.

As for pledges to wipe out student loans and reduce toll rates, such initiatives are easier said than done.

Student loans have always been a problem because even those who are well off and able to pay their loans do not do so. The defaulters tend to have the view that the government will not come down hard on them because it would be an unpopular move.

As for a reduction in toll rates, it would affect not only concessionaires but the capital markets as well. It would impact the concessionaires’ ability to redeem debts taken to complete the highways. Also, it comes with a cost — of having the concession period extended.

On the night of Nov 19, there will be a winner. The cheers from the winning side will be loud. But how long it will last is uncertain.

It will not be long before the economic and political realities hit the party in control of Putrajaya. The world’s advanced countries are poised to go into a recession and Malaysia will not be spared.


M Shanmugam is a contributing editor at The Edge

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