A government that is prone to making policy U-turns also does not instil confidence in the rakyat.
For the longest time, Malaysia was a regional heaven for foreign investors due to our stability. Unlike countries like Thailand, Cambodia or The Philippines, we had a stable government and foreign investors knew what to expect.
They knew that they wouldn’t wake up one morning to see tanks rolling in the streets following a military coup and their assets nationalised. Consistency and stability were the cornerstones of our economy.
As a small-time business owner who regularly mingle within corporate circles especially in social events, I can vouch that entrepreneurs generally prefer long-term stability over incentives like tax breaks.
So, it came as a surprise when PM Datuk Seri Anwar Ibrahim recently announced that his government was not averse to policy flip-flops if it’s for the betterment of the people. This is over his administration’s decision to keep subsidies for chicken and eggs, although it had earlier been announced that prices would be floated starting July 1.
Putting aside the economic merits of the decision, the optics have raised concerns among the investment community about the slippery slope the government now finds itself in. If today the government can so flippantly disregard its earlier decision on the poultry industry involving billions of ringgit, what’s next?
Will it next withdraw incentives for FDIs announced in the Budget? Will foreign investors see their assets nationalised? While the two examples above are not likely to happen anytime soon, Anwar buckling under political pressure to continue with the subsidies for chickens and eggs has caused worries among the business community.
A government cannot have a “let’s flip flop for the sake of the rakyat” as a policy. This spooks investors and up ends their long-term plans. This also shows that the government is not efficient and can be easily swayed by political pressure into making decisions that may be detrimental for the country in the long run.
A government that is prone to making policy U-turns also does not instil confidence in the rakyat. Let’s not forget that one of the reasons why ex-PM Datuk Seri Abdullah Ahmad Badawi’s government lost its two-thirds majority in the 2008 general election was because of his administration’s frequent flip-flops.
Let’s hope that Anwar will be able to stay the course when running the country and not be easily swayed into flip-flops. Otherwise, not only will we see capital flight from spooked investors, Anwar will pay a dear price just like Pak Lah did.
The views expressed here are strictly those of Wong Teck Kuan from Nilai.