Economists say 4D outlet ban a step down slippery slope for Malaysia and investors.
The recent announcement by the PAS-led Kedah state government to prohibit the sale of numbers forecast lottery draws is an attempt by the Islamist party to strengthen its conservative reputation due to the perceived failure of its policy-making influence on the federal level over the Timah fiasco, according to political analysts.
In fact, they agreed that the move was made in an opportune manner, considering it coincided with the ongoing Melaka state poll and could have been introduced at any point in time after PAS became the state government.
Universiti Sains Malaysia political science professor Ahmad Fauzi Abdul Hamid said it is plausible the Kedah mentri besar’s announcement was part of a damage control exercise by PAS’ Cabinet ministers to sway decision-making on the controversy surrounding the award-winning whisky Timah as polling date nears.
A day before the ban was announced, Cabinet member Datuk Seri Wee Ka Siong was quoted as saying that the brand was allowed to keep its name despite opposition from the Islamist party.
Most recently, Religious Affairs Minister Senator Idris Ahmad was quoted as saying nobody in the party agreed with the decision or the consumption of alcohol no matter what name is used for the brand.
“PAS cannot afford to be separated from a distinctly Islamic image which, among lay Malay-Muslims, has always been foregrounded in its combating sinful social ills, such as gambling, liquor consumption, adultery, fortune-telling, etc.
“But being part of a federal government with a multiracial composition, compromises would have to be struck, not all of which would be advantageous to PAS’ long-standing profile.
“This is the give-and-take of coalition politics. So, if you lose on one end, you try to make up for it on the other,” he told Malay Mail.
Ahmad Fauzi further noted that the ban was nothing unusual and it so happened that PAS is in control of the state government with said business licences up for renewal.
“I don’t think PAS whimsically made the decision. It is a calculated strategy to maintain support among PAS’ loyalist base,” he added.
For Universiti Teknologi Malaysia geostrategist Prof Azmi Hassan, he explained that the move by the state government was in no doubt aimed at rallying support amongst the Malay population where PAS leaders are seen as pursuing a particular narrative and policy on Islamic matters.
As to the possible reasons for the ban being announced now, Azmi said the Melaka polls could be a possible reason, citing similar prohibitions already enforced in the other PAS-controlled states of Kelantan and Terengganu, which could have been implemented well before polling took place.
He also noted that public perception of the role played by PAS ministers and deputy ministers in formulating policies at the federal level was at most minimum, which could serve as a point of argument as to why the announcement was made by the Kedah mentri besar.
Meanwhile, economists say Kedah’s ban on numbers forecast operators will have far-reaching consequences for Malaysia’s larger economy and its reputation as a moderate Islamic country.
They warned that the move should not be seen only as a state issue, but one that would have ramifications on federal coffers at a time revenue was shrinking, on investor confidence in the middle of economic downturn, and which would fuel illegal activities.
Aside from the predictable results of driving gambling activities underground and causing the federal government to lose out on tax revenue, the state’s move would also affect how Malaysia was viewed both by its own citizens and foreigners, they explained.
Senior Fellow of Singapore Institute of International Affairs Oh Ei Sun said the move would invariably hurt investor confidence not only in Kedah but also the country as the same political party was part of both the state and federal governments.
“Taken together with the recent Timah incident, the banning of liquor sale in some Kuala Lumpur outlets and so on, it paints a uniformly intolerant image of the country that would no doubt make foreign investors think twice about committing investments here,” he warned.
According to former deputy secretary-general of the Treasury Tan Sri Ramon Navaratnam, Kedah’s sudden decision not to renew the licences of gaming outlets in the state would fuel concerns about the creeping Islamisation in Malaysia.
“It will serve as a warning sign to investors who will now suspect that there is more Islamisation to come, with more restrictions, more narrow-minded and parochial rules,” he said.
“It will deter not only international investors, but also domestic investors as domestic investors will have to bear with the Islamisation and they might decide to go elsewhere with their investments too,” he warned.
Ramon also believed such a policy direction could also worsen Malaysia’s brain drain and capital flight if domestic investors and companies decide to relocate elsewhere to avoid any additional religious-motivated restrictions.
Sunway University Business School economics professor Yeah Kim Leng also concurred that foreign investors will see this as an increasing trend towards religious conservatism in Malaysia.
He said investors will also be concerned on whether the investment environment will become more restrictive due to this trend heading towards conservatism.
“Malaysia was always known as a moderate country but this will surely catch the eye of investors as they would be concerned on whether such conservatism will increase and impact on their investments here,” he said.
Aside from the indirect consequences to Malaysia’s economy and society, the economists also argued that tax revenue from the gaming industry was a crucial source of income for the government, to be spent on infrastructure benefitting all communities.
Ramon said the issue at hand is no longer about the banning of 4D lottery shops in Kedah, but a holistic approach to taxation and economy that should not be tinkered with using a religious tint.
“Kedah state had taken action without thinking about its consequences and this was projected on the whole country,” he said.
Yeah echoed Ramon’s views that the banning of 4D lottery shops in Kedah will only drive these activities underground and cause a loss in revenue for the government.
“These shops were legalised to reduce the shadow economy but by banning it, it will only serve to increase the shadow economy and the government will only serve to lose tax revenue,” Yeah said.
Ramon advised the Kedah government to review its decision, saying that the loss of revenue and potential harm to the state and country’s economy would directly hurt the interests of the communities it was claiming to protect.
He also said those who may gamble should be allowed to do so as long as they are not breaking the law while there should be strict enforcement to stop Muslims who are prohibited from doing so.
“Don’t deprive others of something they can enjoy that is within the law just because another group is prohibited from it,” he said.