Distorting market order, undermining the spirit of honouring contracts and reversing logic of economics, Pakatan Harapan may cause economic downturn

MCA Deputy President Dato' Dr Mah Hang Soon expressed his concerns over the worrying condition of Malaysia’s domestic economy, especially in recent days, whereby international rating agencies such as Fitch and Moody’s Investment have poorly rated the financial outlook for Malaysia. The hidden risks add more worries to the country’s future economic prospect, coupled with the uneven gap between administrative and development expenditures in Budget 2019. This may eventually lead to a domestic economic downturn. 

Since the Pakatan government came into power, the country has for the first time witnessed a distortion of market order, undermining the spirit of honouring contracts, where economic logis has been reversed, which Malaysia has never witnessed before.

Our country having been ruled by the Pakatan government for 6 months, has seen our international reserves fall sharply consecutively since 9 May 2018. Analysts even believe that with influences from external factors, there will be more instant cash outflows from Malaysia. Obviously, the market’s confidence in the current government is seriously depleting. Following  several policy announcements by Pakatan, such as cancellation of large-scale infrastructure projects, a total of RM14.6 billion has vanished in just 6 months.

Furthermore, the uneven gap and imbalance between the administrative and development expenditures in the tabling of Budget 2019 may further lead to an economic downturn in 2019.

The government should tighten the gap between administrative and development expenditures, reducing more on administrative costs while boosting the development funds, thereby promoting the domestic economy, especially at a time when Malaysia is also affected by the trade war between the United States and China. The government should strengthen funding in this aspect. However, viewing the Budget 2019 tabled, development needs were greatly ignored, with administrative allocation accounting for RM25.96 billion and development allocation rendered at a mere RM54.7 billion, a serious imbalanced ratio.

From a series of 'austerity measures' taken by the government, the loss of revenue from the cancellation of mega projects, abolition of goods and services tax, as well as fuel subsidies – these  exemplify the fact that the government is a dire states to make end meets, and may soon lay its finger on people.

Dato’ Dr Mah Hang Soon
MCA Deputy President

-MCA online-