Published May 18, 2009

MALAYSIA INSIGHT
Political row overshadows Najib's economic reform

BN should work to enable all concerned to move beyond the Perak crisis and to look forward

By PAULINE NG
KL CORRESPONDENT
Email this article
Print article
Feedback

IN the past month, Prime Minister Najib Razak has liberalised 27 services sub-sectors and further pried open the financial services sector.

In short, he has acted speedily on economic reform since becoming prime minister in April.

The country's first leader to be trained as an economist, many believe his training and grounding likely afford him clearer insights as to what needs to be done to restructure Malaysia's stagnant economy.

They could be right.

From his early speeches and measures, Mr Najib appears to be on the ball in what ails the local economy and what needs to be done to push it up the value chain.

Whether it is because he has a better grasp of the problems, or has come in at a time when the globalised economy has evolved to a point where there is little option but to act lest the domestic economy is left trailing further behind, Mr Najib has so far demonstrated a greater political will and determination to do the necessary despite the misgivings of some within his own party who would prefer the status quo be kept.



He has assured of continuing reform of the economy, some speedier and others more gradual, including the New Economic Policy - the affirmative action programme which favours the majority Malays and which is often cited as one of the main causes for the many structural inefficiencies within the local economy.

Market-friendly policies can only serve to boost local and foreign investments and to spur economic activities so that unemployment is kept at a manageable level.

The stock-market response has been bullish, year to date higher by some 15 per cent, with economists noting its 'positive' wealth effect on domestic consumption.

It is unfortunate then that the wrangling on the political front has overshadowed the good engineered on the economic front.

Nothing better illustrates this sad state of affairs than the paralysis gripping Perak.

The constitutional impasse is now into its fourth month with neither the Barisan Nasional (BN) nor the opposition coalition Pakatan1 Rakyat (PR) budging on their claim to be the rightful government.

In the past fortnight, the debacle has turned into a bigger legal and legislative circus, possibly the most damaging being scenes of the Pakatan Speaker being physically hauled out of the state assembly.

Mr Najib remains adamant BN's majority in the Perak legislature - only achieved after three PR lawmakers defected, two of whom were facing corruption charges - gives it the mandate to rule.

But he cannot ignore the increasing public clamour - even within members of his coalition - for Perakians to be the final arbiter of this mess, which has led to investments in the state plunging as investors recoil from the imbroglio.

Mr Najib is banking on his economic reform to reverse the anti-BN mood, which saw it lose four out of five by-elections since August.

Even though BN is perceived as the underdog should a fresh state election be held, the coalition ought to support calls for a dissolution of the state assembly, if only to enable Perakians and everyone else to move beyond the crisis and to look forward.

By so doing, Malaysians can better appreciate and acknowledge the strides Mr Najib has made on the economic front, which in turn could help BN regain some of the support lost in the past year.

Allowing the crisis to prolong only detracts from it.