Stable govt needed to attract investments, mitigate global slowdown impact
30 Nov 2022
With a global economic downturn expected next year, Malaysia needs a strong and stable unity government to maintain the confidence of the people and foreign investors to deal with potential negative impacts on the nation.
Sunway University economics professor Dr Yeah Kim Leng said it is important that the government be free of politicking in order to concentrate on the fallout from the global economic slowdown and formulate measures to deal with it.
He said the government will need to identify low-income groups, micro-businesses and small and midium-size enterprises that have been hit by the slowdown and design plans to assist them.
“A stable government will also encourage local and foreign investors to pump money into our economy. This will help mitigate the impact of the global slowdown and allow Malaysia to ride through its shocks.
“A well-managed government will enable projects to continue smoothly and reduce cumbersome regulations to promote trade, thus reducing the external economic impact on the country.”
Yeah said with a stable government, coordination between fiscal, monetary and industrial policies will be smoother as it deals with economic issues that crop up.
He added that the appointment of Datuk Seri Anwar Ibrahim as prime minister has had an immediate positive impact on the stock market and foreign exchange as the ringgit strengthened.
“The Anwar administration has already instilled widespread confidence. This will see an increase in investments from within the country and abroad as a stable administration is one of the prerequisites of any investment.
“Anwar’s credentials and international reputation are a boon for the nation as investors warm up to him. Remember that he was once voted the best finance minister in the 1990s, and he can put Malaysia on the right track with a stable government. This will create a snowball effect that will attract foreign direct investments.”
Universiti Utara Malaysia economics professor Dr K. Kuperan Viswanathan said it is very important for the nation to have a strong and stable government, especially during economic uncertainty.
He said a stable government can better plan targeted expenditure to pre-empt the global economic slowdown next year.
“To deal with it effectively, there need to be clear policies, which will not be possible if the incoming government does not have a strong mandate from MPs.
“A weak government might be able to recommend various policies but it will not be able to implement them or fulfil the wishes of the voters,” Kuperan said, adding that it is important for a government to fulfil the aspirations of the people who voted for it.
He added that a weak government will also face problems in having its budget passed in Parliament because all kinds of demands will be made of it in return for support from MPs.
He said such a situation will give a negative signal to investors, who will delay or rethink investing in the country.
“Investors see Anwar as bringing changes and resolving issues faced by the nation. He is a breath of fresh air for investors as they are confident that he can make the necessary changes to propel the nation forward while dealing with economic uncertainties.
“Anwar has begun the task of getting Malaysia out of its old image that was plagued by corruption and poor management.”
Kuperan also pointed out that the stock market and ringgit responded positively to Anwar’s appointment, which is a strong indicator of the trust that he will bring positive economic changes.
Source: The Sun Daily