• Office of YB Wong Chen

Replying Economic Questions

3rd March 2016 

Here is a reply to the “economics” questions posed by one of my readers, VW Williams. Thank you Williams for the questions, you are right that we should find solutions rather than just criticise the Najib government. I understand that a lot of readers like Williams, are frustrated that the economy is slowing and the prospects are very grim. So you have every right to ask what is the Opposition doing about it. Let me try my best to explain.

Firstly, the job of Opposition MPs in Parliament is broadly to do two things. One is to legislate, that is to create, debate and make laws. In order to do that effectively, MPs must be adept in legal language as well as socio economic and political policy considerations.

Our second duty is to scrutinise government spending, in particular the Budget. This means questioning government economic priorities and policies, and exposing corruption and mismanagement.

Hence when we expose cases like 1MDB, we are in fact carrying out one of our two primary jobs. The problem in Malaysia is that even after exposing corruption and mismanagement, nothing ever happens. This is what we call a pervasive culture of impunity. If a similar case happened in a real democracy, guilty politicians will be forced to resign and prosecuted.

So what can the Opposition do to help a slowing economy? The truth is we have no power to run economic policies because simply we are not the current federal government. We only have persuasive powers via parliamentary debates and media statements. When we debate, we present alternative economic ideas to the government of the day. We stress for greater clarity of policies. We stress on accountability of actions and policies. We ask for cost benefit justifications.

But will the government ever listen to us and our ideas?

Do the government help us by providing us with real data? No, we have the Official Secrets Act for that. Very, very rarely the government will listen. But that also depends largely on the minister in charge. When I was in the TPPA caucus, the MITI Minister, to his credit is a decent enough fellow and he was open to some of our views and in fact implemented some of our concerns. Before I was elected an MP, Bernard Dompok who was then Commodities Minister, graciously invited me for a chat on export duty policies of palm oil after I raised a media ruckus. To his credit, he was willing to listen to my suggestions..

But do you think the Prime Minister who is also the Finance Minister care about our economic policies and ideas? Will he listen to us? I am not optimistic. I will be most grateful to survive my first term as MP without being charged an economic saboteur.

Now we go to the question of what Pakatan state governments of Selangor and Penang can do. These two are certainly very rich and productive states. But what can these state governments do?

Selangor has a mere budget of RM2 billion and Penang RM1.1 Billion for 2016. In comparison the Federal Budget 2016 is RM267 billion. Najib alone had at one time RM2.6 billion in his account, which is bigger than the entire annual Selangor budget.

What can these state governments do with these limited budgets to make any real impact to the entire Malaysian economy? Short answer is, nothing.

When a country faces an economic crisis, a good government can do several things. It can pursue infrastructure projects in order to pump prime the sluggish private sector. It can pursue monetary policies to stabilise currency and stimulate bank lendings. It can alter tax and pension policies to stimulate consumer spending. It can also choose to crack down on corruption and wastage and build up government finances for redistribution back to the economy.

But the above economic policies only applies to a federal government.

The two states of Selangor and Penang have no budget to pump prime the economy. It does not have a state central bank to run monetary policies. It does not control EPF or the IRB. It does not have a police or MACC to curb corruption. The states only have 3 very limited job scope; land matters, local governments and religions.

So we basically cannot do anything active to prevent the coming economic crisis. However we can alert the public to prepare or avoid it themselves, which means to advise them to save money for rainy days are definitely ahead.

My office will continue to provide alternative economic policies. We will continue to do economic research despite all odds. We continue to think out of the box to make the most of the little data we get. At the moment I am using government revenue numbers and then working backwards to gauge economic performance of individuals and corporations. The good news is we are getting better at what we do. My team is driven and we are truly committed to improving policies. Policies that one day we can implement to rebuild our economy and deliver social justice when we get to power.

Lastly, what I want to say to my readers is this. Surely, we are living in evil times where impunity and governance is at rock bottom. This evil in our political system has contributed significantly to our current economic woes.

But there are many MPs in Pakatan Harapan, who have not given up and we continue to prepare ourselves as a government in waiting. What we ask is you, the readers, to also not to give up on us.

If 2017 turns out to be the perfect storm, economic fence sitter voters will swing to us and a mere 5% swing will deliver us a mandate to rule in 2018. The real recovery work will begin then. However, if the Prime Minister should choose to honourably resign, then maybe the recovery may start sooner.