Kuala Lumpur, 11 April 2018: The Institute for Democracy and Economic Affairs (IDEAS) has released a detailed review of the manifesto that was recently published by Barisan Nasional (BN):
- The economic policies proposed in the manifesto are welcomed for continuing to empower SMEs and strengthen and diversify economic sectors, but the think tank is critical of the lack of reforms to address rising personal debt levels or reduce the negative impacts of the government’s large role in the economy.
- Also admired are the positive social policies that seek to improve the welfare of the vulnerable B40, women and indigenous people. However, questions are raised over how all these promises can be funded sustainably.
- Finally, IDEAS welcomes the manifesto’s promises to enhance democracy, governance, and the government’s accountability to its citizens, but expresses concern that it continues to encourage the suppression of freedom of speech and privacy.
On Economic Policy
Commenting on Barisan Nasional’s (BN) economic policy, Adli Amirullah, Economist at IDEAS said “BN’s manifesto has shown that they are very much committed to empowering Small and Medium Enterprises (SMEs) in the country. Those policies that are intended to uplift local SMEs should be commended because 97% of business establishments in Malaysia are SMEs and they contributed at least 36.6% to the national Gross Domestic Product (GDP) in 2016.” Citing some examples, Adli stated that BN is promising to provide tax incentives and special development funds to help leading brands to assist small entrepreneurs, provide better infrastructure and platforms for local SMEs, promote rural youth entrepreneurs, and encourage innovation among SMEs. He firmly believed that these initiatives would empower local SMEs to keep growing in the economy. He says “If the government can create these kinds of initiatives and platforms for local SMEs, I strongly believe that it will help SMEs to tap into global value chain in the long run, bringing huge benefits to local SMEs”.
Besides that, Adli also applauds BN’s plan to invest and strengthen economic sectors other than the manufacturing and services sector. He said “It is important to promote non-mainstream industries like the agriculture industry, technology industry, creative industry, forestry industry, and halal industry. For example, BN is planning to: support the high technology industry through improvements to foreign direct investment; to expand platforms and funds for industry players in the creative industry; and to upgrade the agriculture sector to a high-income industry by using the latest technology such as vertical farming to improve food production. These initiatives will help the Malaysian economy become more diversified in the near-future and reduce over-reliance on certain industries.”
However, Adli also expressed reservations over certain promises on economic policy that are less convincing. He said “I am disappointed that the government is not putting a sunset clause in the Price Control and Anti-Profiteering (PCAP) Act. In fact, BN is promising to amend the act to extend the authority of the Ministry of Domestic Trade, Co-operatives and Consumerism (KPDNKK) to act against over-profit traders. This is not a good economic policy, and BN needs to accept that the PCAP Act is an anti-market policy that will backlash against the economy in the long run. IDEAS published a policy paper written by Hafiz Noor Shams on the effects of the PCAP Act, showing that it is one of many reasons that many small businesses are closing down in the economy.”
Furthermore, Adli raised a concern over BN’s promise of reducing the maximum limit of interest rates and credit card late payments. “Malaysia’s household debt to GDP ratio is relatively high at approximately 84.3%. This should be enough to convince regulators not to promote more debt among households in Malaysia. If we reduce the maximum limit of interest rates and credit card late payment fees, this will encourage more households to use credit cards because the consumer will feel that they can swipe their credit card with less risk. If many consumers respond in this way, it will increase the household debt even higher in the future. Besides encouraging more debt, if a household uses more credit cards, the money supply will increase and lead to an increase in inflation in the long run. BN need to realise that instead of solving the cost of living issue, this policy might contribute to a higher the cost of living in the future”, Adli concluded.
On Social Policy
“The BN Manifesto has promised an increase of welfare in many areas, focussing on the most vulnerable groups such as the B40, women, children, indigenous people and unemployed youths. However, the financial viability of these programmes needs to be evaluated to ensure that these programmes are sustainable in the long run”, according to Wan Ya Shin, Social Policy Analyst at IDEAS.
Wan commented that: “it is a good step that the BN coalition has included programmes and policies that are targeted to support women, especially single mothers. Among the list of programmes and policies included are universal childcare provision, increasing women’s participation in decision making roles in parliament and all sectors, introduction of a Sexual Harassment Act, encouraging the private sector to provide flexible hours for mothers with children under 2 years old and 7 days of leave for women to care for their child or family that are sick. These policies are good measures, but just providing flexible hours for mothers and care leave to women would suggest that care work is only the responsibility of women. If the policies could be extended to fathers and men, then it would increase awareness that both genders share in the responsibilities of care work in the family and the policy would support men who are taking care of their young children and sick family members.”
Among the Bumiputera policies that are promised, Wan highlighted that “the commitment to reduce drop-out rates among the Orang Asli children and increase literacy programmes in rural areas is a policy that is urgent and important. According to the Ministry of Education, Malaysia’s enrolment rates to primary, lower secondary and upper secondary school in 2016 are high at 97.2%, 94.1% and 84.3% respectively. The Ministry of Education has been addressing this issue and they have improved the dropout rate for Orang Asli students from 36% in 2008 to 17% in 2016. However, this issue needs long term commitment to ensure that Orang Asli students are not left behind in educational attainment. This issue is a multidimensional issue that requires attention to the underlying reasons of why they are not attending schools. The multidimensional issues include differences of school culture and curriculum from their culture as well as availability of infrastructure such as roads and transport to go to school.”
Besides the policies mentioned above, Wan opined that “the policy to end discounts for Bumiputera property lots that are valued at RM1 million would ensure that this policy is targeted at the lower income Bumiputera. Besides that, the increase of support and funding for the arts and cultural industry are commendable as arts and culture are core to the identity and expression of a developed nation.”
Aira Azhari, Coordinator of the Democracy and Governance Unit praised BN’s efforts to improve direct democracy in Malaysia through the introduction of a public petition mechanism for important issues, making it compulsory for local authorities to conduct town hall sessions and the creation of the iKepoh app for public complaints. “These are important and necessary steps for BN to take, as they narrow the gap between policymakers, local authorities and citizens. I am glad that BN is following in the footsteps of more developed democracies by opening up the space for citizens to raise their concerns. This ensures greater transparency and accountability in governance as well,” said Aira.
“Further suggestions to improve transparency and accountability in local government include making their audit reports public and for their council meetings to be televised live, which points to a serious attempt by BN to ensure participation by the rakyat in the democratic process at a more micro level”, Aira opined.
In terms of institutional reforms, the BN manifesto features promising suggestions such as introducing a Political Financing Act, introducing an Ombudsman, as well as a Parliamentary Select Committee (PSC) on public interest issues. “Enacting legislation on political financing has been a long time coming in Malaysia. This law is one of the most crucial elements in ensuring transparency in the process of funding political parties. Without this law in place, Malaysia remains vulnerable to corruption within the highest echelons of power.”
On the introduction of an Ombudsman, Aira commented “IDEAS has published a paper on the need to create an Office of the Ombudsman in Malaysia. In the paper, we stressed the importance of an Ombudsman as an alternative form of dispute resolution between citizens and government. BN’s promise is encouraging, as it opens up more avenues for citizens to air their grievances towards the government. Finally, the proposal to set up a PSC on public interest issues is another big step towards empowering our Parliament as an institution. In the past, IDEAS has worked with and supported initiatives by other organisations such as G25 in advocating for PSCs. I am heartened to know that our suggestion has been taken seriously by the BN coalition.”
However, Aira noted with concern that “BN did not propose to abolish the repressive laws that currently exist, such as the Sedition Act 1948, the Printing Presses and Publications Act 1984 and the National Security Council Act 2016. It is important for the Malaysian people to realise that proposing institutional reforms and greater transparency will not provide a panacea to the shrinking space available to speak, publish and assemble freely. For instance, the recently enacted Anti-Fake News Law presents another infringement of free speech and privacy. Any government must, first and foremost, guarantee the rights and freedoms of the people before introducing accountability procedures and strengthening institutions. At the heart of every mature democracy is a society that can freely contest ideas, in order for the best idea to win.”
Aira also expressed concern over the further centralisation of power with the Prime Minister. “BN’s proposal to establish more units under the Prime Minister’s Department, and to form a National Syariah Judiciary Council chaired by the Prime Minister risks interference in areas that should be looked after by independent institutions,” concluded Aira.