Monday, January 18, 2021

2021: nothing rosy on the horizon

Jan 04. 2021
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By Lim Sue Goan
Sin Chew Daily

The Dewan Rakyat has passed the 2021 Budget at the third reading by a very slim margin of 111 to 108. This means the Perikatan Nasional government can continue to govern until next year.

The thing is, as PM Muhyiddin only has a razor-thin majority support in the Parliament, we cannot expect him to bring about any remarkable change so that the country can be steered back and go down the right way next year.

With his administration so vulnerable, it is within anticipation that the PM will do his utmost to please Umno, a party that upholds racism and populism, as well as the conservative religious party PAS. As a result, the country will remain stagnant without any meaningful progress over much of next year.

As a matter of fact, reform has never been Muhyiddin's ultimate objective, and Malaysians are expected to continue struggling next year under the weight of political and economic woes and the coronavirus pandemic.

Recent economic developments and numbers point to the fact that this country will continue to suffer economically next year.

First and foremost, Fitch Ratings announced a downgrade for Malaysia's long-term Issuer Default Rating (IDR) from "A-" to "BBB+" before it cut the sovereign ratings of Petronas and Telekom Malaysia.

Fitch has highlighted the country's weaknesses, including higher government debts at 76% of the country's GDP, and political instability that could affect the government's performance.

Even though the government's revenue will remain at a pathetically low level of 19.1% of GDP, the PN administration has failed to explore new sources to increase its revenue while expenditures continue to soar, causing the government's debt level to go out of hand.

The PM has admitted that we used to be a preferred destination for international investors, but due to the pandemic it is very hard to get investors to come here now.

Women and family minister Rina Harun has revealed that her ministry plans to hire additional 8,000 social welfare department (JKM) workers next year, meaning our already bloated civil service sector is set to expand further next year.

Given the ballooning expenditures and mounting public debts, asset disposal is probably the only strategy at hand.

In order to disburse RM34 billion dividend to the government, Petronas has reduced its stakes in MISC and KLCCP Stapled in a bid to raise RM2.8 billion in cash.

Meanwhile, PNB recently disposed of its Grade A Brisbane office tower Santos Place for A$370 million (RM1.14 billion).

Additionally, Asian Development Bank has predicted that Malaysia's GDP will shrink by 6% this year, worse than the previously projected 5% shrinkage. Meanwhile, October unemployment rose to 4.7% or 748,200 people out of job, while November IPI (industrial production index) contracted by 0.5%, signaling a bleak prospect for the country's growth in the year to come.

But weirdly, even as the country urgently needs foreign investments to bolster our economy, the PN government seems to have acted the other way. For record, it has terminated the RM43 billion Melaka Gateway project, suspended the MM2H program, and reportedly excluded Singapore from the proposed high speed rail project by making Johor Bahru the terminal station of this costly project.

The country's international image is poised to suffer further as a consequence of rampant corruption and abuse of power. The government has just canceled the bribery case involving former federal territories minister Tengku Adnan Tengku Mansor, the third major case involving public interests dropped so far this year, prompting Credit Suisse Malaysia to warn that "the country will pay the price for this."

Actually, Muhyiddin lacks the actions to fight corruption even if he has pledged to do so. In the case of rubber stamp counterfeit case involving immigration officers, a low-ranking officer has been found to possess four luxurious sedans worth over RM2 million. And in the money-laundering case involving a Macau syndicate, a police officer was found to have RM1 million savings in his bank account.

Malaysians generally perceive that the corruption problem has gone from bad to worse. According to Transparency International's Global Corruption Barometer (Asia), 70% of Malaysians see government corruption as a big problem, 30% think the government has done very badly in addressing the corruption issue, while 36% believe our MPs are corrupt.

Even so, PAS president Hadi Awang has viewed corruption in the same light as alcoholism. Without institutionalized effort to battle corruption, the market will never be convinced.

We cannot pin our hopes on senior politicians who care only about their own interests. We must be bold enough to delegate the responsibility of overhauling this country to young leaders who are our only bet.

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