A tale of two leaders

For 25 years, the people believed Anwar Ibrahim would bring reforms to Malaysia. Pakatan Harapan came to power with a pledge to focus upon the economy. Now Malaysians are looking at a situation, where non-Malays perceive they have no meaningful place.

Murray Hunter

After nearly 18 months in office, Prime minister Anwar appears to be continuing the same agenda he carried out while deputy prime minister back in the 1990s. Back in the 1990s, Anwar Islamized the government, and played a major role, alongside his former boss Mahathir Mohamed, nurturing crony capitalism in the country. Over the last 25 years, Anwar has portrayed himself as a reformer.

Today, Anwar oversees a nation plagued with vigilantism, religious inspired violence, terrorism, and the rapid advancement of crony capitalism in the economy. To make matters even worse, the Anwar government is embarking upon the most draconian censorship and loss of freedom of speech, the nation has ever seen.

In Malaysia, any hopes of reform have gone down the drain.

In contrast, Argentina’s new president Javier Milei, who pushed back on the World Economic Forum in person, at Davos last January, is trying to radically change the nature of his country’s economy. The libertarian and economist Milei presented a sweeping agenda to overhaul the economy and rid the nation of the ‘deep state’ within the bureaucracy.

Milei has quickly acted to shrink the size of the bureaucracy, cutting ministries from 18 to 9 in the government. Milei is reducing public spending by 5 percent of GDP, while putting an end to subsidies at the same time. A large number of public tenders have been cancelled in an attempt to eliminate corruption. Milei is also on the road to privatising Argentina’s state owned companies to free up the economy and make it much more competitive. Regulations are being slashed at unprecedented rates.

Although there is much congressional and provincial governor resistance through court challenges to Milei’s measures, he is attempting to crash through these barriers, or risk crashing himself. Milei hopes to break up the political forces that control Argentina, a country with 161 percent inflation, and 45 percent of the people live in poverty.

Milei has a small team of ministers in contrast to Anwar’s 38 senior ministers, not including deputies. The Milei government has an economic-libertarian bias. While Anwar came to power with a similar philosophy, the government has been on the authoritarian side, maintaining much of the regulatory framework in place, and has heavily supported existing monopolies and government linked companies (GLCs). In addition, the Anwar government is pursuing an Islamization objective.

There are challenges ahead for both Anwar and Milei. Foreign investors are closely watching the paths and outcomes of both countries. Both leaders have disapproval ratings at present, and the lynchpin to both leaders’ survival will greatly depend upon economic performance.

Anwar is running his government on record deficits, while Milei is keeping hyperinflation down by achieving a fiscal surplus after 3 months in office. Milei is Dollarizing the economy in an attempt to stabilize inflation. Dollarization, could well be used as a short-term method to stabilize the Ringgit, in lieu of pegging the Ringgit to the US Dollar. Once the threat to the Ringgit has passed, Malaysia may be wise to speed up the ASEAN proposed payment connectivity scheme, where the Ringgit can be exchanged with other currencies, without using the US Dollar and a medium of comparison.

The greatest contrast between Anwar and Milei is that Anwar is trying to preserve the existing class system, while Milei is trying to rid the nation of those who exercise great power behind closed doors within the bureaucracy and GLCs.

There is no doubt fearless leadership of a nation is needed in these times. Milei has attacked the structural aspects of the economy that matter for a democratic country to exist. Anwar hasn’t touched upon any of the deep structural problems of the economy, which will maintain the existing class system.