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What a hung parliament means to Malaysia's economy
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Publish date: Sun, 20 Nov 2022, 10:48 AM
KUALA LUMPUR, Nov 20 — The just-concluded 15th General Election (GE15) has brought Malaysia to unchartered waters with a hung parliament, wherein neither coalition crossed the indispensable line of 112 simple majority to form the next government independently.
The conundrum is not surprising, Universiti Tun Abdul Razak economist Prof Barjoyai Bardai said, adding that it is how democracy works today.
“The new government can be formed without a majority of winning seats, a mixed government of several political parties, and a new coalition emerges,” he told Bernama in an interview.
A total of 220 of the 222 parliamentary seats were contested as polling in the Padang Serai parliamentary constituency in Kedah has been postponed to Dec 7 following the death of the Pakatan Harapan (PH-PKR) candidate for Padang Serai, incumbent M. Karupaiya on Wednesday.
The new date for nomination of candidates is Nov 24.
At the same time, voting was suspended at 11 polling stations in Sarawak’s Baram parliamentary constituency due to flooding, with voters seen standing knee-deep in floodwaters.
Citing recent developments in the United Kingdom whereby the then prime minister, Liz Truss, was changed in 45 days after appointment. It goes to proof that rotating prime minister, swap method that allows the government to exist without the need of one majority party is possible, said Barjoyai.
Liz Truss resigned after a series of U-turns in its mini-budget, which included cutting taxes as well as sackings, and resignations. The pound sterling tumbled as markets were spooked.
Fundamentally, Malaysia’s economy is strong, but the current scenario would somewhat still affect investors sentiment albeit in the short term, said Professor Datuk Shazali Abu Mansor, deputy vice-chancellor of research and graduate studies at i-CATS University College.
Investors would probably adopt a wait-and-see attitude until a new government is formed, he said.
Flourish logoA Flourish election chart
Which alliance? Politics is an art of possibilities
Professor Mohd Nazari Ismail from Universiti Malaya’s Business and Economics Faculty said there are many scenarios, and it really boils down to the outcome of negotiations between the parties.
GE15 saw three major coalitions, namely Barisan Nasional (BN), Pakatan Harapan (PH) and Perikatan Nasional (PN) versus the previous election which had only BN and PH.
“If one party won, the political situation will be more stable; if the results are even, two parties will work together to form a government, but we don’t know who will cooperate with whom at this point of time,” he said.
The initial expectation was and which the market had priced in is an Umno-led BN plus Gabungan Parti Sarawak (GPS) government.
However, the outcome of GE15 was an upset with BN, having set out with confidence to retake the government in Putrajaya, suffered the worst defeat in its political history when it won only 30 seats out of the 178 it contested.
PH bagged 82 parliament seats and PN 73 parliament seats. It was followed by GPS with 22 seats, Gabungan Rakyat Sabah (GRS) six seats, Warisan three seats, and others four seats.
The Election Commission chairman Tan Sri Abdul Ghani Salleh announced that no political party has been able to obtain a simple majority after they failed to win 50 per cent out of 219 parliamentary seats in the GE15.
Meanwhile, PN chairman Tan Sri Muhyiddin Yassin is willing to collaborate with any party, except PH, that can accept its cause and principles in forming a clean and stable government.
He also said that PN had received a letter from the Yang di-Pertuan Agong Al-Sultan Abdullah Ri’ayatuddin Al-Mustafa Billah Shah and was instructed to finalise certain matters by tomorrow afternoon.
“There’s no need for me to reveal the content of the letter. The Yang Dipertuan Agong has given a list of matters that need to be finalised accordingly.
“We need to discuss certain matters and we hope to finalise it by tomorrow afternoon, InsyaAllah,” he said.
On the other hand, PH chairman Datuk Seri Anwar Ibrahim has claimed to have obtained the support of enough Member of Parliaments (MPs) to form the new government with a simple majority.
If the GE15 has resulted in a hung parliament, the market may correct on fears over ongoing political uncertainty post-GE15, CGS-CIMB have had predicted ahead of the election.
“As the saying goes and cliché as they sound, ‘politics is the art of the possible’ and ‘there are no permanent friends and enemies in politics’.
“We should not rule out the potential scenario of ‘unthinkable’ alliance,” Maybank Investment Bank’s analyst, Suhaimi Ilias, had also said prior to GE15 itself.
He said another possibility is a “minority” Government due to a “hung” Parliament outcome or a stalemate among parties in forming a coalition Government with a simple majority.
No guessing on policy changes and impact of such a scenario. It will be a period of uncertainty but discovery for everyone including the economy and the market, he noted.
Common grounds in policies, people and economy
Regardless of the outcome, fiscal consolidation will remain a priority, although the path could be different depending on which party or alliance that leads the government, said Suhaimi.
In terms of government’s expenditure, “people-oriented” measures will continue especially the cash handouts programme that has been in existence since the time of pre-GE14 Barisan Nasional (BN) Government and went through name changes to reflect the Government of the day.
“What we expect — as per the cash handouts — is for other assistances to become more targeted such as subsidy restructuring to a targeted mechanism from a blanket system and rationalisation of various social safety net and welfare programmes.
“We also expect the post-GE15 government to proceed with the tabling of the Fiscal Responsibility Act that was mentioned in the Budget 2023 speech.”
He said major infrastructure projects would continue — for projects now under construction — East Coast Rail Link, Gemas-Johor Bahru (JB) Electrified Double Track, JB-Singapore Rail Transit Link, Pan-Borneo Highway and Sabah-Sarawak Link Road — and for projects in which tenders have started — Klang Valley Mass Rapid Transit Line 3.
The expectation is also for a higher share of the Federal Government development spending allocation to the less-developed states for basic infrastructure.
“The new Federal Government is expected to focus on improving the quality and delivery of essential public services, especially education, training and healthcare, as well as realising higher and quality investment flows to the less-developed states for a more inclusive, equitable and balanced socio-economic developments.”
With sustainability being the buzzwords, any Government to be formed after GE15 will no doubt make sustainability as key policy agenda especially in realising the United Nations Sustainable Development Goals and delivering Malaysia’s commitments to address climate change.
Key areas will include renewable energy, electric vehicles, natural disasters impact mitigation, management of natural resources, guiding and assisting society, and micro, small and medium enterprises for a just transition towards sustainability. — Bernama
https://www.malaymail.com/news/malaysia/2022/11/20/what-a-hung-parliament-means-to-malaysias-economy/40809
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Discussions
Be the first to like this. Showing 17 of 17 comments
No, I don't know it is DAP wish.
I know DAP is genuine to have a transparent, non-racist and progressive government.
There are noble politicians, maybe you mixed the rotten ones.
2022-11-20 12:52
Time for Dap leaders to face the reality! Pas is rising! Let's hope PH manage to form government with BN GRS GPS! Enough of mindless politicking! Enough of vengeance!
We are facing far greater threat! And that is talibanasation! We need a full 5 years of stability, prosperty and socioeconomic growth to counter this!
2022-11-20 12:53
As i see it, a new alliance of PH BN GRS GPS is the best that we can get!
Please! No more politicking! A mature discussion among them to bring Malaysia in to the right path is very important!
No more monkeys in parliment! Don't play with populist cards! Stick to firm decisions that benefit this nation!
2022-11-20 12:56
DAP does not fear PAS. It is the large segment of Malays who fear DAP due to indoctrination from young and upon employment into civil service.
2022-11-20 12:57
As for the court cluster! Enough is enough! Just swipe them under the carpet! Provided they are not given any ministerial post! And for them to step down quietly!
2022-11-20 12:57
Who cares if you vote or not.
It is BN which need DAP, not the other way around.
It is only your wish they would like to join with BN. LOL!
2022-11-20 13:10
PETALING JAYA: Former law minister Zaid Ibrahim has called on Pakatan Harapan (PH) to work together with Umno to form a “more moderate Malay-based” political bloc to resist further advances from the more “extreme” Perikatan Nasional (PN).
He said that coming into the 15th general election (GE15), PH, which has been attacking Umno relentlessly for being corrupt, was itself blindsided by PN peddling a more “dangerous,” “extreme, religious and almost fascist kind of thinking.”
That ideology has now become a “formidable force in this country,” the former law minister said.
“We cannot allow this country to be fundamentally changed forever,” he said, adding that once it has set foot such “religious extremism” cannot be reversed.
Alternatively, he suggested that PH chairman Anwar Ibrahim consider forming a “solid bloc” with the coalitions in Sabah and Sarawak, if he found it “more palatable”.
He described Gabungan Parti Sarawak (GPS) chairman Abang Johari Openg as a “sensible and moderate leader”.
Both Abang Johari and Gabungan Rakyat Sabah chairman Hajiji Noor could support Anwar as leader of the country, said Zaid.
Politics is sometimes about the lesser of two evils, (not) idealism. I hope you (Anwar) make the hard, but right choices so that we can stem the tide,” he added.
With several states, including Selangor expected to hold their state polls, Zaid warned that action must be taken now to ensure that PN does not win in Selangor.
If it does, “the game is over”, he warned.
2022-11-20 13:36
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It means nothing!
If one of the dreaded forms the government, it will be DEVASTATION
If the other forms, it will be an unstable government with lots of protest and sabotage.
In short, either way it heads to devastation.
2022-11-20 11:55