This article first appeared in Forum, The Edge Malaysia Weekly, on June 27 - July 3, 2016.
The recent twin by-elections saw Barisan Nasional (BN) retain its seats in Sungai Besar and Kuala Kangsar, and even slightly increase their share of overall support, facing a divided opposition.
Seemingly, the defence of these seats is being interpreted as votes in favour of preserving the status quo, despite the continuous barrage of negative economic and political indicators in the country. Oddly, at the same time, citizens of major world economies are asking tough questions, credibly challenging "business as usual" thinking.
Public support for these outsiders and their criticism is unmistakable. In the US, self-styled democratic socialist Bernie Sanders was drawing over 40% support from the Democrats, while political novice Donald Trump attracted enough support to lead the Republicans in the US presidential election. Meanwhile, “Brexit” issues in the UK continue to raise the anxiety levels of the British people.
Perhaps, before the 14th general election, it is high time that we, too, accepted the need to do our own rethinking of things, including Malaysia Inc.
In Sungai Besar and Kuala Kangsar, support for the opposition waned 3% overall from the 2013 general election, as voters reacted to the split of Pas, and its exit from the renamed Pakatan Harapan (PH) federal coalition. This was a stinging reminder that a divided opposition in GE14 cannot win, and it is a warning that if uncorrected, the situation will mean many more years of what I see as the economic status quo of BN's increasingly risky model of capitalism.
Key economic data shows that the government's management of the economy is already facing headwinds. According to the Malaysian Institute of Economic Research, its business conditions index in the first quarter is already down eight points, at only 92.9 this year compared with 101 for the same quarter in 2015. More recently, MIDF Amanah Investment Bank alerted us to capital outflow from Malaysia, as foreign investors sold a net RM3.9 billion worth of local shares within five weeks from the end of April.
While it is understandable that fund managers move money in and out of markets all the time, what is driving the loss of confidence in Malaysia and fund outflows from our market?
Last year was a tough ride for Malaysia. The chief economic concerns in 2015 for the average Malaysian were the Goods and Services Tax (GST) and the 1Malaysia Development Bhd (1MDB) fiasco. The latter is still facing ongoing investigations that traverse national borders, including Singapore, Switzerland, the UK, the US, the United Arab Emirates, Australia, Hong Kong, Thailand and Luxembourg.
The year 2016 bears similar economic headwinds. We are halfway through the year and the country still has to contend with low commodity prices, weakened investor sentiment and a weak currency. The depreciation of the ringgit again highlights the question: does Malaysia’s approach to “capitalism” need a rethink?
This year, The Economist’s Crony-Capitalism Index placed Malaysia among countries with the highest fortunes gained in sectors susceptible to monopoly or that are over-dependent on the government, second only to Russia.
Our version of capitalism comes at massive economic costs. First, the preference for incumbents discourages new market entrants and creates a less competitive economy. Second, cronies often practise rent-seeking behaviour by soliciting government subsidies at the expense of consumers. Third, a lack of economic competitiveness allows the political elite to conveniently resist fundamental economic reforms. These factors may perpetuate a vicious circle of inequality and social immobility for the nation.
Already, Malaysians are afflicted by the current debt crisis — as household debt-to-GDP ratio increased further to 89.1% as at 2015 from 86.8%. Our household debt-to-GDP ratio is now among the highest in the region.
Critical ideas and fresh thinking are not encouraged, neither outside nor within the government, to push for economic vibrancy, let alone meaningful economic reforms.
For more to happen, we need to set the national conversation right. Instead of staying entrenched in polemics that are decades old, we should push instead for policies and legislation that are consistent with promoting collective harmony, political pragmatism and global integration. Failure to have social and economic reforms predicated on these goals derails Malaysia from being a competitive force in the global marketplace.
With regard to rethinking ideas, one of the striking experiences I had during a recent visit to Tunisia was a slogan that was used repeatedly during the nation's largest Islamic party congress. Their rallying call was, "country before party" — Tunisia before Ennahda.
Ennahda's political maturity in admitting and accepting the more magnanimous option to their own party's possible detriment and unite a fractured Tunisia is laudable. It is most inspiring and relevant to Malaysia at this critical juncture.
To date, Tunisia is the only Arab state that has emerged as a democracy following the 2011 Arab Spring. Observers view Tunisia's survival as a fledgling democracy as largely due to Ennahda’s unwavering resolve to manage the balance between national politics and the party’s own religiosity. Party leader Sheikh Rached Ghannouchi criticises political Islam as a practice that manipulates religion as a source of division, rather than unity.
This year, with the overwhelming support of 93.5% of its congress delegates, Ennahda made a landmark pledge to separate religious advocacy from politics. In his own words, Ghannouchi stated, “We are Muslim democrats who no longer claim political Islam.”
Malaysia has much to learn from the Tunisian experience. A key lesson is on the de-politicisation of religion — an ostensible shift towards Islam as Rahmatan Lil Alamin — blessing for the world/mankind — providing both wisdom and justice through policies to uplift the poor and rooting out corruption.
Islam must never be utilised for political expediency. When religion is leveraged as a powerful political tool, this sidelines our means to politicise issues that are not of economic or social importance.
An Islamic party in Tunisia has elicited the world to rethink the role of religion in politics. But this does not make Islam any less relevant nor diminish its importance. In fact, freedom, justice, democracy and the rule of law are rightfully consistent with the values that Islam espouses.
We need to engage in direct conversations on how to tie these various values together to achieve an equitable Malaysia — and perhaps right what is wrong with the status quo — politically, economically and socially. In this regard, decades-old polemics should effectively be left in the past as we move forward to rethinking Malaysia.
Nurul Izzah Anwar is the Member of Parliament for Lembah Pantai and vice-president of Parti Keadlilan Rakyat