KUALA LUMPUR: Economists feel that a snap election is the last thing that Malaysia needs right now.
They believe that it is crucial for policymakers to remain focused on efforts to put the economy back on track, given the slow growth and Covid-19 outbreak, as well as a prolonged trade war between the United States and China.
Nevertheless, in light of the political mess, they said calling for a snap election could be a viable option for Malaysia to move forward.
Malaysia has been thrown into political quandary after Tun Dr Mahathir Mohamad submitted his resignation as prime minister to Yang di-Pertuan Agong Al-Sultan Abdullah Ri’ayatuddin Al-Mustafa Billah Shah yesterday.
The king, however, later decreed that Dr Mahathir should continue to helm the nation as the interim prime minister until a new government is formed.
“A snap election is one of several possible scenarios (to end the political deadlock), especially if none of the possible candidates for prime minister can command a majority in the Dewan Rakyat,” public affairs specialist KRA Group director Amir Fareed told the New Straits Times yesterday.
He said a snap election would take a month to materialise given the electoral process and regulations in the country.
“However, it (snap election) may lead to a longer period of uncertainties, what more if the outcome is inconclusive,” said Amir.
Putra Business School business development manager Associate Professor Dr Ahmed Razman Abdul Latiff agreed that snap elections should be the last resort.
“There are more important matters that need to be addressed, such as the fiscal stimulus package that is supposed to be announced on Thursday,” he said.
Juwai IQI Global chief economist Shan Saeed said all stakeholders fully understood the importance of safeguarding the economy and how to maintain a growth trajectory in the long run.
Asian Strategy & Leadership Institute’s Centre of Public Policy Studies chairman Tan Sri Ramon Navaratnam said the king might advise the prime minister candidate to hold a snap election.
“However, it depends on the parties that have the majority of members of parliament supporting them. Then they can form a government with the Yang di-Pertuan Agong’s permission,” he said.
Amir, meanwhile, said it was unclear and highly unlikely that a new government could be cobbled together in time for the planned unveiling of the stimulus package on Thursday.
“This is highly unfortunate as policymakers should be prioritising national and public interest first and foremost.
“Malaysia’s economy desperately requires fiscal measures in light of the weaker than expected economic growth last year and outbreak of Covid-19.”
Amir said there needs to be a swift and conclusive resolution to the political crisis.
“If it drags further, it will take a longer time for Malaysia to repair its reputation and regain the confidence of investors,” he said.
IQI’s Shan said the political turmoil was a wildcard for Malaysia as it happened at a crucial time when the global economy was navigating through tempestuous times.
“While it is premature to say, the crucial stimulus package to mitigate the effects of Covid-19 is unlikely to be announced this week.
“It is crucial to resolve the political impasse quickly to get the economy back on track. Economic growth is heavily dependent on macroeconomic stability.”
Shan said foreign fund managers might revisit their strategy in terms of Malaysian asset allocation, citing that the coronavirus outbreak would be forgotten as it subsides, and focus turns towards domestic politics.
“We believe economic growth remains intact and foreign direct investment will continue to pour into Malaysia.”
He said global investors wanted to park or allocate their funds where there was economic, financial, infrastructure and lifestyle stability.
“We believe Malaysia continues to be on the global investors’ radar due to its strategic geography and significance in trade routes.”
Areca Capital Sdn Bhd chief executive officer Danny Wong Teck Meng said Bursa Malaysia’s weak performance yesterday was a knee-jerk reaction to the news flow over the weekend, and did not reflect market fundamentals.
“We expect stocks receiving the brunt of the sell-off will be those with high foreign holdings, in which we have minimal exposure,” he told the NST.
We regret a photo error in the print version of the above story. One of the photographs used wrongly identified MTEM's Ahmad Yazid Othman as Assoc Prof Dr Ahmed Razman Latiff.