LETTER | We must give govt time, not in months but years

LETTER | Everyone wants clear economic policies for the country. Some have become impatient and criticised the present government for being slow in articulating the policies and implementing them.

Do Malaysians truly know what we want or are we merely regurgitating the criticisms of those who did nothing significant when in power?

As I see it, formulating clear economic policies is not an issue. The issue is implementation by the government of the day. Implementing policies must take into consideration realities on the ground.

We all know we need to control debt, strengthen the ringgit, restructure or reduce subsidies, increase wages, increase food self-sufficiency, reduce inflation, set the appropriate interest rate, and manage government spending prudently and effectively.

Many cried for clear economic policies, but many too may not be able to take it if these policies are implemented without compromise. The reality is we want long-term goals but are unwilling to face short-term pains.

We want inflation reduced, but many loved to have free money dished out by the government, especially during the pandemic. Why are we surprised there is high global inflation right now? Those who understand there is no free lunch will understand why inflation is endemic now.

We want to control and if possible, run a budget surplus to reduce government debt, but continuous government spending is essential to so many people. Many need subsidies and many contractors need government projects to survive.

We want low-interest rates and a strong ringgit. But how do we get this? Economic outcomes are dictated by the right policy mix, not by what we decreed or desired.

In fact, I consider the ringgit strong today because, despite our relatively low-interest rate when compared with many other countries, the exchange rate is holding at a decent level.

Food security and self-sufficiency are objectives with long gestation. We can’t increase the size of farmlands and introduce double or triple crops overnight. Besides, self-sufficiency policies may even cause food prices to go up if imported foods are more competitive than locally produced foods.

We have a working market economy. I believe ultimately we must restructure and reduce subsidies. Subsidies create distortions and affect market efficiency. I believe part of the reason why wages have not gone up much is because of government subsidies. Other than helping the hardcore poor, I think we should gradually let market forces dictate the economy.

It is a good policy to reduce government debts to a more manageable level. But empirical evidence has shown that very few countries succeeded. Many of our government expenditures today are “locked-in” expenditures, such as interests on debts and a very large public sector.

Reducing government debt and the size of the public sector not only needs political will but time. It is a contentious issue that will be very difficult to resolve.

We need foreign investment, both FDI and portfolio, but we need political stability. The unity government is not even a year old, but many are now trying to unseat the government.

I wish the state elections were dealt with quickly so that the governments, both federal and state, can get on with the business of governing without worrying too much about short-term pains.

A populist government is never a good government. If conflicting parties are competing for popularity, like for example who has waived the Felda settlers’ loans, it is an indication of nothing significant.

What is so difficult to write off debts using government allocation? I would commend them if they can raise the income of Felda settlers and help them to pay off their own debts.

The moral of the story here is we must be careful of what we wish for. We may want clear policies and noble objectives, but we may not be able to handle the short-term pains.

I appreciate what the present federal government is doing. It is never easy and we must give them time, not in months but in years.

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.