Saturday, April 6, 2013

Malaysian 13th General Election - The Silent Majority For Your Consideration

To say that the 13th general election, which will soon be upon us, is the most anticipated is an understatement.

It an overstatement to say that the ruling party Barisan Nasional will win, with or without a 2/3 majority, no matter who or what says it will.

It would be naive and even foolhardy to say so. Those among us who support the BN have no illusions that this will be a hard fought and mother of all general elections.

No one can guarantee as a certainty where the Chinese, Indian, or even the Malay votes will go and a poll by University of Malaya showed the ruling coalition at 42 percent support compared with the opposition's 37 percent, but with 21 percent of voters undecided. Source Reuters, "Malaysia's Najib fires starting gun for tense election race"

A swing by any race of voters, communal politics is a reality, will have a significant impact in this GE.

Then there is the silent majority. I believe they represent this 21% of undecided voters and more discerning. A silent majority even among the loud opposition supporters. If and when the silent majority decides, as they have always done to tip the scales, they will be the other important determinant factor in the outcome in the most critical Malaysian election in the 21st century.

Therefore, to all the undecided and discerning silent majority, for your consideration.

A manifesto is a pledge and for the Pakatan Rakyat it will only be a pledge, an unfulfilled pledge.

This is what the Economist Intelligence Unit or EIU, said about Pakatan Rakyat's pledges,
By contrast, comments from the PR indicate no commitment to tackling Malaysia's weak public finances. The opposition alliance's economic agenda is intended to appeal strongly to a younger electorate and, taken collectively, appear as fiscally imprudent if not more so than the BN's voter-pleasing measures. The PR's populist items include free secondary education (abolition of student loans); lower car prices (through reform of the National Automotive Policy); a higher monthly minimum wage (of M$1,200, or US$390, compared with M$900 under the BN); the elimination of toll roads; and lower fuel prices.
and to emphasise broken promises, the EIU adds,
Yet the PR will be judged on how quickly it makes good on its election pledges. In Malaysia's richest state, Selangor, the alliance has already been accused of breaking its promises.
On the economy, the Pakatan Rakyat manifesto impudently, if not imprudently, says,
A sustainable economy is one that is owned and generated by the people. We need prosperous and skilled people to contribute their expertise and boost national productivity. When economic power is concentrated in the hands of the people, it is invested back into the economy.

Pakatan Rakyat believes that the country’s economic potential is being hampered by the interests of the power elite and their cronies. These minority groups reap a large amount of national wealth through the awarding of concessions and monopolies, while the majority bears the burden of a looming national debt.
The economy is the uppermost concern among voters according to the opposition leaning news online portal, The Malaysian Insider.

Now, read the whole gamut on economy in the Pakatan Rakyat manifesto drivel and then read the following, in verbatim, from the IMF February 28, 2013, "Malaysia Expected to Continue Robust, Demand-Led Growth"
Malaysia’s economy enjoyed robust, domestic-led growth in 2012, and is expected to grow by about 5 percent this year, accompanied by low unemployment and subdued inflation, say IMF economists.

In their regular report on the health of the Malaysian economy, the IMF economists say that the country continued the strong recovery that began in 2010 following the global crisis.

Increasing reliance on domestic demand

This growth has been fueled by the country’s increasing reliance on domestic demand. Higher spending by households, firms, and government on consumer and capital goods has offset weak exports to Europe and the rest of the world, says the IMF report.

Consumption has been supported by low interest rates, a strong labor market, and fiscal transfers to households. The growing trade in consumer goods among countries from the Association of Southeast Asian Nations is also helping shield Malaysia’s economy from the downturn in many other parts of the world.

Private and public investments have been supported by low interest rates and the catalytic effect of projects under the government’s Economic Transformation Program, particularly in oil, gas, and infrastructure. The aim is to move Malaysia up the international value chain and turn it into a high-income nation by 2020.

The rebalancing of Malaysia’s economy toward greater domestic demand has led to a significant deterioration in Malaysia’s external current account balance—to a surplus of about 6 percent of GDP in 2012, compared to 11 percent in 2011.***

Skillful macroeconomic management

The report underscores that skillful macroeconomic management has underpinned strong, noninflationary growth despite the unsettled global conditions.

Monetary policy by Bank Negara Malaysia—the country’s central bank—has been appropriately supportive of growth in an economy facing external headwinds. Federal government fiscal policy, on the other hand, has been moderately contractionary. This, say IMF economists, is a measured and welcome step toward medium-term fiscal consolidation, which is needed to reverse the increase in federal government debt in recent years.

The report emphasizes that fiscal consolidation needs to be supported by structural fiscal reforms and by a move away from volatile and procyclical oil- and gas-related revenues. It welcomed the authorities’ plans to introduce a goods and services tax, and to gradually phase out costly universal fuel subsidies, replacing them with targeted support for the needy.

The report also applauded the authorities’ efforts to reform public financial management, and encouraged them to closely monitor the growing fiscal risks associated with the rising contingent liabilities of the federal government.

Malaysia’s robust financial sector

The IMF report welcomed the conclusion of the 2012 Financial Sector Assessment Program—undertaken by the IMF and World Bank—which found Malaysia’s financial sector to be robust, and underpinned by high levels of capital and a strong supervisory and regulatory framework.

It said the recent passage of financial legislation would help strengthen the legal framework for financial sector supervision, and praised the authorities’ use of targeted macroprudential policies to deal with risks associated with rising household debt and housing prices. The authorities’ close monitoring of developments and readiness to take any necessary, additional action was also welcomed.

Boosting productivity and inclusiveness

The IMF expects Malaysia’s economy to continue to perform well over the medium term. The report suggests that productivity and inclusiveness are likely to be boosted by investments under the country’s Economic Transformation Program, as well as by the wide-ranging reforms envisaged under the Government Transformation Program—a strategy to change the way Malaysia’s public sector operates.

Among reforms to make growth stronger, more balanced, and inclusive, are measures to boost the quality of education, which should help reduce Malaysia’s skills gap and increase the contribution of human capital in economic growth, and efforts to raise female labor force participation, which should help increase labor force growth. The report urges the Malaysian authorities to press ahead with the steady implementation of these reforms.

The IMF economists welcomed the introduction of a minimum wage in 2013, which should support the incomes of poorer workers, and recommends considering the introduction over time of unemployment insurance, and reforms to the pension system to further strengthen social protection.
The full IMF report.

For your kind consideration, when you decide.

*** Bank Negara on the current account surplus read here. Of note is Chart 1, Current Account Balance Narrowing After More Than a Decade of Surplus.

The current account of the country moved steadily into the blue and upward positive trend beginning 1998 till the present time. That in itself is also significant, as 1998 was the year of the sacking of a personality whose name is not worthy of mention, for the purpose of this post.

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