SOME have interpreted the defeat of Pakatan Harapan (PH) in the Sungai Bakap by-election on July 6 as a sign that Malaysians reject the economic policies introduced by Prime Minister Datuk Seri Anwar Ibrahim.
The most talked-about issue is the introduction of a targeted diesel subsidy policy on June 10. Subsequently, the by-election result was perceived as evidence that Malaysians had rejected the targeted diesel subsidy policy.
That's incorrect.
Actually, it is a continuation of the trend to maintain the status quo in all by-elections after the 15th General Election (GE-15) in November, 2022, and the state elections in five states in August, last year, whether parliamentary or State Legislative Assembly (DUN).
Pas won the Kuala Terengganu by-election on Aug 12, last year, and the Kemaman by-election on Dec 2, last year as well, followed by PH-Barisan Nasional (BN) winning the Pulai and Simpang Jeram by-elections on Sept 9, 2023, Pelangai by-election on Oct 7, last year, and Kuala Kubu Baharu by-election on May 11.
Apart from the continuation of the status quo trend, internal and external factors also affect the outcome of a by-election. Weak machinery or internal sabotage due to factors unrelated to the government's economic policies but linked to factional politics are also possible causes.
Therefore, it is unwise to blame the government's economic policies for the Sungai Bakap defeat.
Simultaneously, urging the government to halt or review its economic policies, especially the targeted diesel subsidy policy and the proposed targeted petrol subsidy policy, following the Sungai Bakap defeat is neither appropriate nor logical.
The most solid evidence that the government is implementing the correct economic policies is the retention of Malaysia's good sovereign credit ratings by international credit rating agencies such as S&P Global Ratings (S&P), Fitch Ratings (Fitch) and Moody's. They reflect international stakeholders' confidence in Malaysia.
S&P based its rating on the country's strong external position and monetary policy flexibility. Furthermore, its economic growth rate is faster. It also expects Malaysia's fiscal deficit to narrow with the planned subsidy rationalisation measures.
Fitch also projects Malaysia's GDP growth to reach 4.4 per cent in 2024 and 4.5 per cent next year.
In addition, the government's economic performance was praised by Rajiv Batra, Head of Asia-Pacific Equity Strategy at JP Morgan, in a CNBC interview on July 10, where he stated that JP Morgan had upgraded Malaysia from "underweight" to "neutral".
Batra explained that policy reforms, including fuel subsidies, data-centred investments and ongoing infrastructure development in Malaysia, made JP Morgan positive about Malaysia. He added that what was more surprising was the rapid pace of progress, with GDP growth of 4.2 per cent in the first quarter of this year prompting the upgrade.
Batra also stated that JP Morgan sees the MADANI government "walking the talk" in almost one and a half years of their tenure, passing difficult policies and reforms, and most importantly, committing to fiscal consolidation without sacrificing growth, leading to increasing foreign investor interest and the return of foreign investment.
Meanwhile, Dr. Benjamin Laker, a leadership professor at Henley Business School, University of Reading, England, in his article on July 10 titled "Malaysia's Economic Recovery Under Anwar Ibrahim's Leadership" published by Forbes Magazine, also praised the economic reforms introduced by the prime minister.
He refers to the introduction of new taxes, subsidy rationalisation, Progressive Wage Policy, the enactment of the Public Finance and Fiscal Responsibility Act (FRA), the acceleration of foreign direct investment approvals, and investments in high-value sectors deemed crucial for economic recovery.
He noted that the prime minister's leadership and political acumen in managing public dissatisfaction, including the impact of economic reforms on the people — especially in terms of living costs — will be a critical determinant of the long-term success of his economic policies, potentially making Malaysia a model for other countries navigating post-pandemic recovery and similar structural transformations.
Recognition from international credit rating agencies and international experts is the clearest indication that the prime minister's economic policies are correct and should continue.
* The writer is the Deputy Vice-Chancellor (Academic and International) at Universiti Malaysia Pahang Al-Sultan Abdullah (UMPSA)