Najib’s post-election challenges
Lim Sue Goan, Sin Chew Daily
The PM’s kangkung statement has unleashed an endless string of negative feedback, and this shows Najib is in for a new round of tests after last May’s general elections.
Najib has opted for subsidy rationalization to tackle rising deficits while consolidating the government’s finances instead of cutting back on administrative and remuneration expenses. While this will save him from the possible backlash from the country’s civil servants, it wouldn’t help him the least in avoiding public fury.
As if that is not enough, the government has chosen to untimely cut back subsidies. This coupled with the rising goods prices owing to a weaker ringgit as the Fed holds back in its bond purchase, will make life tougher for average Malaysians.
There is no way anyone should attempt to play down the impact of skyrocketing prices. If this eventually dampens domestic consumerism and shrinks our exports because of rising production cost, the 5% GDP growth target will never be achieved.
A sluggish economy accompanied by falling international oil prices means government revenue will be thinner. This will affect the government’s capability in implementing large scale development projects to satiate the lust of relevant bumi businesses, hence stepped up pressure from within the party/
Uncurbed inflation also make life harder for the low-income rural families, and this is poised to weaken Umno’s solid support base.
As a matter of fact, cutting back subsidies alone will never be enough to help the government bring down public debts. Based on the IMF projection, Malaysia’s public debts are expected to top US$187.4 billion this year, or about 57.7% of the country’s projected GDP of US$324.5 billion for 2014, exceeding the government’s 55% ceiling. Along with the dwindling current account surplus, it is likely for international rating agencies to cut our sovereign ratings.
With the economy going downhill, the government should by right expedite economic transformation and reform, especially in relation to the long obsolete racial policies, in order to retain our talents and foreign investments. Unfortunately economic transformation remains at a standstill eight months after the general elections because of the conservative forces within the party.
In the absence of new dynamic force, conservatism gaining momentum and unceasing religious controversies, it will be an uphill task for the government to lure new investments and deliver the country from the current economic quagmire.
Another trial Najib has to deal with is the internal skepticism of his leadership as some have intentionally raised a new issue or another every now and then.
Former information minister Zainuddin Maidin wrote in his blog recently to call for the return of former PM Mahathir to Putrajaya to help BN tackle raging racial, religious and economic issues, which Lim Kit Siang labeled as an “Empire Strikes Back” plot by reactionary anti-democratic forces.
