Nearly a third of Pakatan Govt’s economic promises achieved, says Ideas

KUALA LUMPUR: The Pakatan Harapan Government, which swept into power in May last year, has fulfilled nearly a third of its economic promises but more needs to be done, the Institute for Democracy and Economic Affairs (Ideas) says.

In its first edition of Projek Pantau, a report card on PH’s performance in fulfilling promises in its Buku Harapan manifesto, issued on Tuesday it highlighted:

  • The government moved quickly to implement its signature promises, including abolition of GST;
  • The government has allocated significant resources to supporting Small and Medium Sized Enterprises (SMEs) and encouraging technological adoption;
  • The government has significantly improved the transparency of the budget and the government’s overall financial position; and
  • The government has laid out an ambitious plan to tackle corruption which includes important reforms of the public procurement system.

However, Faiz Zaidi, executive at the Democracy and Governance Unit, Ideas pointed out: “In many of these areas, the real test will be implementation but it is encouraging that the government is on track to deliver these important reforms.

“The government should maintain momentum in these areas and should ensure these successes are communicated clearly to the public to build confidence in the government’s performance,” he said.

For this first edition, Ideas analysed 192 sub-promises, broken down from 23 main promises. Ideas said it considered all promises in Pillar 1 (Reduce the People’s Burden) and Pillar 3 (Spur Sustainable and Equitable Economic Growth), alongside three promises in Pillar 2 (Institutional and Political Reforms).

“Our overall conclusion is that the government is performing reasonably well in delivering its manifesto promises. Nearly one year into their first term in office, over 29% cent of their economic promises are either achieved or on track,” it said.

However, Ideas said other areas however, are in more trouble, in particular a number of highly ambitious targets that are proving difficult to reach:

  • The government has implemented a range of measures to reduce the cost of living, most notably abolishing GST. So far – these measures have focused on short term measures, such as subsidies and price control, rather than structural reform to different product markets to lower prices more sustainably.
  • The government has successfully restructured BR1M into Bantuan Sara Hidup, but it has not been put under the purview of a statutory body which could prevent political misuse.
  • In housing, although the government is implementing a detailed strategy we judge that this will be insufficient to achieve the ambitious promise to build one million more affordable homes, given the continued focus on a government-led approach which has failed to deliver in the past.
  • In healthcare, the government’s increase in the health budget is far below the level needed to reach 4% of GDP. Ultimately the discussion on providing sustainable healthcare need to be elevated.
  • Ambitious reform of Government Linked Companies (GLCs), in particular delivering the promise that GLCs will not compete against private companies seems increasingly unlikely as the government has committed itself to no clear strategy.
  • Although trade and investment continue to rise, the government has stalled on ratification of the Comprehensive and Progressive Trans Pacific Partnership (CPTPP) and the prospects for an EU Free Trade Agreement also look slim.

This links to a wider concern voiced by many that the government needs to frame a clear and compelling trade and industrial policy for Malaysia.

“In these areas, we recommend that the government recalibrate its approach to ensure that the ambitious targets of the manifesto can be achieved,” Faiz said.

The top three areas the government has said and done little or nothing to demonstrate that progress is being made:

  • The government has allocated significant resources to upgrade infrastructure in Orang Asal communities, but has not set out a comprehensive approach to address the other issues facing these communities – including land rights and education.
  • On tax, the government has so far only proposed modest reforms, although the government has formed a Tax Reform Committee it is not clear what direction reform is likely to take, or even what the scope of reform might be. The government will have to balance the competing demands of raising additional revenue to fund public services and sticking to its promise of reducing the tax burden.
  • Although the government has set allocated resources to support SMEs in the form of loans, it does not seem to be applying the same attention to reviewing and reducing the regulatory burden on business, and small business in particular.

In these areas, Ideas recommended the government move quickly to set out to reconfirm its political commitment to these promises and set out clear policy direction to achieve them.

“We also urge the government to be more strategic and coordinated in communicating with the public. This is important not only to demonstrate what they have achieved, but a maturing democracy like Malaysia needs informed citizens who are able to raise the political debate to a higher level,” Faiz said.

First published in The Star Online

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