December 29, 2016
(FMT) – KUALA LUMPUR: The massive infrastructural investments being undertaken, and planned, are major game changers for Malaysia.
And the administration of Prime Minister Najib Razak has introduced some sound policy initiatives, including market-friendly policies, which would have been gladly accepted in the past.
Yet, argues, analyst, Abdillah Noh in an opinion piece in the Straits Times, Malaysians are not excited.
The reason: They do not trust the government.
How The Wall Street Journal dissected the biggest financial scandal in the world, 1MDB https://t.co/835is1URYw
— Patrick McDowell (@pmcdowellsea) December 22, 2016
Abdillah, a visiting research fellow at the Sir Walter Murdoch School of Public Policy, Murdoch University, and Assistant Professor at the Tun Abdul Razak School of Government, Universiti Tun Abdul Razak, says: “What is apparent is that Najib’s policies attract sceptics. Malaysians, it seems, are less willing to go along with government policies no matter how attractive the long-term benefits are.”
Nagging political issues, he says, continue to cloud the many positives of Najib’s policy initiatives.
“People in Malaysia are not quite done with the 1MDB issue. The international media has also kept turning the spotlight on 1MDB and Najib, reinforcing public scepticism. What is obvious is that Malaysians are stuck in second gear, unwilling to move beyond the 1MDB issue.”
Ex-BSI banker Seah convicted of three charges tied to #1MDB case – Najib how? https://t.co/V8AdXAD5eD pic.twitter.com/C03DnsIH7v
— Zashnain Zainal (@bedlamfury) December 16, 2016
“It seems so,”, he says in answer to his own question as to whether Malaysia is paying a heavy price for its political crisis.
Abdillah notes that the nation is suffering from a trust deficit, and that trust between the governed and the government is in short supply.
He quotes the 2016 Edelman Trust Barometer which found that only 39% of Malaysia’s general population trusts the government.
“That needs addressing because a trust deficit prevents the state from garnering policy collaborators. Policy ‘buy-in’ becomes difficult as stakeholders are unwilling to be part of the policy process,” says Abdillah.
Worse, he contends, a trust deficit could also see stakeholders subverting what otherwise could be effective policies.
As an example, he says, Malaysians are still unwilling to accept the goods and services tax even though GST receipts have clearly buffered Malaysia’s huge losses in petroleum revenue in the past year.
Najib’s Portrait Taken Down In International Expo For Embarrassing Malaysia https://t.co/OrlBwZ9RYP #1MDB #NajibRazak via @worldofbuzz
— Zashnain Zainal (@bedlamfury) December 14, 2016
Warning that a trust deficit could potentially lead to more damaging systemic risk, Abdillah says: “Thinning public trust and greater tendency to talk down the economy could amplify Malaysia’s political, social and economic risks.
“A self-fulfilling prophecy may set in, creating a case where the public runs down the economy more than it should and triggering a crisis of confidence.”
Speaking to village chiefs, PM Najib says not Malaysia's fault #ringgit is weak, blames offshore speculation. pic.twitter.com/cfpULqOkDq
— Sumisha Naidu (@SumishaCNA) December 8, 2016
Referring to the value of the ringgit as a benchmark of this confidence, he notes that it is currently Asia’s worst-performing currency.
Click to read original article here.
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