Harvard Fellow Backs Reform For Economic Growth In Malaysia

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By Tengku Noor Shamsiah Tengku Abdullah
KUALA LUMPUR, May 16 (Bernama) -- The Pakatan Harapan government should undertake prompt, yet effective, economic reform to spur growth amid global uncertainties along with efforts to ensure a smooth power transition, said Harvard University Senior Fellow, Prof Dr Kriengsak Chareonwongsak.

He said this was because policy uncertainties arising from election pledges – including abolishing the Goods and Services Tax (GST) and expressway tolls, re-introducing fuel subsidies and initiating a review of mega projects -- would inevitably trigger short-term pain in the form of revenue loss and compensation payments.

“Although such a situation is unprecedented in Malaysia, this doesn’t mean the economic future is all bleak,” Kriengsak told Bernama News Channel here recently.

“They must have figured out strategies to plug potential budget deficit, either by means of devising new strategies or by curbing massive expenditure wastage and leakage.”

The recent rise in oil prices would mean additional revenue from oil royalty which would serve as an essential buffer to put into operation the coalition's manifesto pledges, he pointed out.

On concerns expressed by international rating agencies that Pakatan Harapan’s populist manifesto may trigger a higher fiscal deficit in the short-term, Kriengsak stressed that this could be checked by means of prudent spending as evident in the trimming of the number of government ministries by more than half to only 10.

“Moreover, Prime Minister Dr Mahathir Mohamad has detached himself from the portfolio of Finance Minister, a wise move to assure greater clarity and transparency, in addition to having formed the Council of Eminent Persons to advise the government on economic and financial matters during the transition period,” said the President of the Bangkok-based Institute of Future Studies for Development.

After all, Kriengsak said, the individual helming the Pakatan Harapan government was someone who had come one full circle with impeccable reputation internationally.

“Having administered the country for a good 22 years, he (Dr Mahathir) is not only still sharp and eloquent, but vastly experienced in that he has on numerous occasions navigated Malaysia through and out of the stormiest of economic or political seas,” he added.