Quora Answer: Is the Malaysian Economy Heading in the Right Direction under the New Pakatan Harapan Government?

The following is my answer to a Quora question: “Do you think the Malaysian economy is heading in the right direction under this new Pakatan Harapan government?”

No.  Pakatan Harapan obviously have no idea what they are doing.  They are started to make the previous Barisan Nasional kleptocracy look competent.

For example, Mahathir is talking about another car company.  This is a ridiculous vanity project when what Malaysia needs is infrastructure such as a highway on the east coast of the peninsula, a highway across East Malaysia. port expansion, and a rail system in her major cities.  What is the point of building cars no one will buy except through protectionism?

For example, the flip flop on foreign ownership of major residential developments.  This makes them look incompetent, and foreign investors are reluctant to commit to further projects.

For example, the cancelling of major projects signed by the previous administration without considering near term consequences.  Instead of knee jerk cancellations, they should have negotiated revised timelines to buy time while they considered alternatives.

For example, opposing the EU’s impending ban on palm oil without proposing reforms on land clearing.  They do not have the clout to change the EU position.  What they should have done is look to expand their markets.

For example, not facilitating reforms to the tax code to attract investments.  Malaysia needs investments.  Instead of falling back to nationalist rhetoric and protectionism, they could consider delegations to major trade partners to build bridges.

For example, not addressing the falling currency, and purchasing power parity.  This makes imports expensive.  Perhaps they could consider halting payments for a year to make the current account look healthier.

Instead, Mahathir bin Mohamad’s administration is picking fights with Singapore, Australia, and France.  Mahathir also suggested renegotiating the CPTPP and moving towards more protectionism.  He was never going to get that, especially when Malaysia is one of the smaller economies in the agreement.  Instead, if made Malaysia look like an unreliable partner in any international agreement.