Malaysia in 2023 - Looking through a cloudy crystal ball

03 Jan 2023 02:04pm
Photo for illustrative purposes only - 123RF
Photo for illustrative purposes only - 123RF

New Year celebrations are when people get a chance to reflect on the past year and look forward to the year ahead with hope and optimism. This year, however, New Year’s was rung in without the usual fanfare and fireworks.

Could this be a reflection of what lies ahead for the new premier?

For us in Malaysia, the modest celebration was due to the ongoing floods in certain parts of the country and out of respect for the flood victims.

Despite the sombre start to the new year, this should not stop us from taking stock of what Malaysia has been through, and what we can expect in 2023.

Relative domestic political stability

Having won the vote of confidence on Dec 19 via a voice vote, Prime Minister Datuk Seri Anwar Ibrahim can now comfortably govern with a stronger mandate.

Before the vote of confidence, Anwar’s government signed a memorandum of understanding with leaders of five political coalitions and parties in his government to support his administration.

The five being Pakatan Harapan (PH), Barisan Nasional (BN), Gabungan Parti Sarawak (GPS), Gabungan Rakyat Sabah (GRS) and Parti Warisan (Warisan).

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This has helped the Prime Minister secure a vote of confidence from 148 Members of Parliament (MP), or a two-thirds majority.

The concerned public can breathe a sigh of relief as the vote of confidence provides a sense of continuity and stability for national policymaking and implementation of initiatives.

The most crucial is the much-awaited tabling of Budget 2023 on Feb 24, which was held off due to parliament's dissolution.

All eyes will be on the budget as it showcases Anwar’s policy direction and will be the opportune platform for him to introduce potentially bold solutions in maneuvering this year’s murky outlook.

Having said the above, the recent political stability should not be taken for granted. It can still be expected that there will be attempts at trying to dwindle the current administration’s support.

During the recent Parliamentary sitting, Bersatu leader Tan Sri Muhyiddin Yassin questioned the legitimacy of Anwar’s cabinet, still insisting that he has the majority support.

We also still face the ongoing question of the status of four ex-Sabah Bersatu MPs who vacated their seat.

Though unlikely, it will negatively Anwar’s government to a large extent, other than impacting some by-elections.

It will add pressure to the relationships within the federal coalition.

Currently, Bersatu is seeking to boot the lawmakers under the anti-hopping law provided under Article 49(A) (3) of the Federal Constitution.

According to the newly minted Speaker of Parliament Datuk Johari Abdul, the matter will be looked into accordingly.

Cautious economic outlook

2023 is going to be a tough year for much of the global economy with many experts predicting an economic slowdown.

According to a recent interview by IMF Managing Director Kristalina Georgieva, the new year is going to be "tougher than the year we leave behind,".

Her reasoning for this is that the main engines of global growth i.e China, the United States and Europe are all experiencing weakening economic activity simultaneously.

We saw China relaxing its Covid restrictions last month and though welcomed, it can be expected that this may further impact and continue supply chain disruptions in Q1 of 2023, as the country grapples with a surge in Covid-19 cases. The aggression on Ukraine by Russia has been ongoing for more than 300 days, disrupting the supply of fuel and food to the global market, especially in Europe, leading to a rise in its prices

These unstable geopolitical events have caused a ripple effect and affected markets in this region as well.

Hence why there is greater pressure for the guidance of Budget 2023 to send the right signals to the world as the country work toward recovery amidst the outlined challenges.

Domestically, much like the rest of the world, Malaysia is still facing a rising cost of living, high inflationary pressures, and issues around food security and unemployment which make this year’s budget allocations a delicate balancing act.

It can be expected that the Prime Minister, cum, Finance Minister will be prudent in the budget given the strong tone he set upon his appointment such as cutting government expenditures on lavish events and foregoing a salary for himself.

Anwar may introduce some expansionary policies to spur economic recovery and be moderate in maintaining rakyat-centric policies, toning down on cash handouts and focus on subsidy rationalisation.

The government will have an uphill battle to narrow the country’s revenue-expenditure gap.

Revenue-generating measures for the country have been a long-debated issue further amplified during the pandemic and economists have called for an overhaul in the nation’s taxation system as one of its solutions.

This can be a challenge especially if taxes are targeting corporations and will clash with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) which aims to remove tariffs among its signatories.

The cost of doing business for multinational exporters will also increase if the mooted increase in electricity tariff for the sector transpires.

Amping up the momentum in 2023

Given the complexities and challenges Malaysia faces, some may say the country requires more radical or aggressive approaches in ensuring that the country is on track for recovery.

In addition to stronger financial support for low-income households and vulnerable groups affected by rising inflation, cost of living, and unemployment, the government should also take bold steps in tackling issues affecting our quality of life.

Issues on sustainability and the environment need to play a stronger role in policymaking. December is usually associated with year-end holidays and spending time with family members, yet the nation was faced with floods that forced over 70,000 from their homes while mourning the lives lost in the Batang Kali landslide right before Christmas.

Malaysia has been through a lot in the past three years and, understandably, one may manage their expectations as they embrace the new year, however, we should aim to be optimistic.

Humans have the capacity to overcome new challenges and bravely move forward and create a better world amidst poor odds.

We may not be able to predict the future but we can take action to change the course of history.

The views expressed in this article are the author's own and do not necessarily reflect those of Sinar Daily.

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