Published April 9, 2009

M'sia to speed up reforms pace: analysts

By PAULINE NG
IN KUALA LUMPUR

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TUESDAY'S triple by-election results have done Malaysia's ruling Barisan Nasional (BN) coalition few favours, but analysts view the outcome as positive for the economy because it will likely force the government to accelerate the pace of planned economic and political reforms.

Mr Najib: Most voters paid little attention to his early goodwill measures

Local newspapers said yesterday the poll results maintained the 'status quo' - with BN holding its Batang Ai state seat in Sarawak and the opposition coalition Pakatan Keadilan Rakyat (PKR) keeping the Parliamentary seat of Bukit Gantang in Perak and state seat of Bukit Selembau in Kedah.

The fact is, BN's fortunes took a turn for the worse. Despite BN pitting its entire machine against PKR, and despite the new and energetic leadership of Prime Minister Najib Razak, PKR not only retained two seats in what were previously BN bastions, but with bigger majorities. Consequently, the loose PKR coalition is now up 4-0 in West Malaysia, having inflicted convincing defeats on BN in four by-elections since August.

To claw back support that has been badly eroded since the general election last year - in which BN lost five states and its customary two-thirds Parliamentary majority - analysts expect Mr Najib to deliver faster on promises or risk his coalition, which has ruled since Independence, being booted out of office at the next general election due in 2013.

RAM Holdings chief economist Yeah Kim Leng expects an immediate focus on greater equality and more inclusive policies, rather than race-based ones, following the thumping support given by non-Malays to PKR on Tuesday.

Their further swing away from BN ensured opposition victory except in the remote district of Batang Ai, which is dominated by the Iban community and was always likely to go to BN because of its superior resources.

Most voters paid little attention to Mr Najib's early goodwill measures and gave greater weight to the PKR vision, which promises to uphold the rights and interests of all Malaysians.

'PKR's vision is gelling, and what's being implemented in PR-held states is visible to the public,' said Mr Yeah, which is why Mr Najib should urgently articulate and implement his 'One Malaysia' vision to render the ageing New Economic Policy less relevant in today's context.

To be fair, Mr Najib has been in office less than a week and fairer policies are being instituted. Whether mooted by him or his predecessor Abdullah Badawi, it was announced this week that government scholarships will be extended more fairly - the first 20 per cent going to the best, regardless of race.

To Maybank analyst Vincent Khoo, the 'feelgood' factor in the leadership transition and the usual rhetoric were simply not enough to help BN at the ballot box, and the by-election outcome now forces the new administration to deliver on the economic and social grounds, starting with effective implementation of a RM67 billion (S$28 billion) stimulus package. The question is: Will Mr Najib's party members, happy with the status quo, allow him to move as swiftly as he needs to?