Office of YB Wong Chen
“Should Malaysia Wait Until November for Transition?” Speech
Last night, I delivered my speech on the transition of power at the “Should Malaysia Wait Until November for Transition?” forum. I have since then uploaded the video on my previous posting (https://www.facebook.com/wongchenpkr/videos/474569899875561/). The speech text is as follow:
1. Thank you, ladies and gentlemen, for taking an interest in this matter. Thank you YB William Leong, who organized tonight’s forum.
2. The question before us is not whether should Tun Mahathir transition power to Dato’ Seri Anwar Ibrahim as the next prime minister. That question whether to transition or not has largely been resolved by both Tun Mahathir and Dato’ Seri Anwar and by all the Pakatan Harapan leaders in the Presidential Council. The transition will happen.
3. The question before us is a question of timing, when should it happen?
4. So far, we’ve had two solid dates, one is on May 2020, which is the anniversary of the end of the second year of Pakatan Harapan government. The second date is after APEC, which will happen in November 2020. If after APEC, then it would most likely be in December 2020, latest January 2021. The topic today is whether the transition should happen before November 2020.
5. So, the question is about timing. There are pros and cons for everything in life, so let’s explore the pros and cons of the timing of the transition of power. Please bear in mind that the change of Prime Minister doesn’t mean there’s going to be a substantial change in the power structure of Pakatan Harapan in the Cabinet. Bersatu will still have their ministers, DAP will have their ministers, Warisan will have their ministers, PKR will have their ministers, Amanah will have their ministers.
6. When we talk about transition timing, we’re talking about why we need it earlier as opposed to later. The pros and cons for why earlier or later. Let me touch upon 3 aspects: (1) economics, (2) policymaking, and (3) political interests.
7. We start by looking at economics. As we can see, the economy is not doing excellent. It is humming along and under the latest World Bank report, which was published in November last year, we can see, and all of us can feel it, that the only thing really going for the Malaysian economy, is that domestic consumption is holding the economy intact. Consumption of goods and services, in times of festivities and in basic essential goods are thankfully continuing as usual. In terms of big-ticket items, we’re seeing some rebounds and some drops. Car sales are better due to the Proton X70. But housing has continued to underperform. Hopefully, we can get out of the housing trap this year. International trade is up by 2% to 3% due to opportunities arising from the US-China trade war.
8. But this trade gain is set to reduce this year as the trade war winds down. Shares, as reflected by the stock market, have been lacklustre, to say the least. The worst performing bourse in the region.
9. Now, what we really need is an investment boost from domestic players, the local tycoons and businessmen to start investing in order to grow capacity for the economy. When the locals lead, the foreigners will follow. Has this happened or not?
10. You would think that under Tun Mahathir’s leadership that there should be a new found confidence in the Malaysian economy, because many of us equate Tun Mahathir’s leadership style back in the 1990s, with high economic growth. Of course, some of us remember the darker side, which is rampant crony capitalism.
11. So, the question is, why is it that under Tun Mahathir’s leadership this time, we have not seen an economic boost. Note that in budget 2019, Pakatan returned some RM37billion to the business community via GST and income tax rebates. So why is there no domestic investment? The answer is simply because the tycoons, investors and bankers are not sure what the short-term political future looks like.
12. Will the new PM bring in new policies? Will Anwar carry out systemic reforms? Will we get a more open economic model? These are the fundamental questions investors are asking.
13. Because there is great uncertainty regarding the timing of the transition, the issue has unfortunately morphed into “will Tun Mahathir even handover to Anwar?” If we can set the date, if the prime minister can confirm a timeline for the handover, it will basically inject a lot of confidence into the local domestic players to finally invest in the country, therefore giving us a second boost to supplement domestic consumption. Therefore, from the economic front, there is a clear argument that we need to have clarity and certainty of the timing of the transition. And the mood of the business community is, the faster the better.
14. Now, we turn to the policy front. Any policy-making will require some data analysis, some construction of a model and plan of actions. Then we need to get stakeholders’ approval, we need to get the civil service to be ready to implement them, to communicate actively the policy to get the buy-in from the public, and the public to receive it. In some policy issues, we need to even pass laws. So, the process of introducing a new policy is actually very time-consuming.
15. Let me give you a very simple real-life policy to illustrate the situation. Maternity leave. According to Budget 2020, we know that maternity leave in Malaysia has just been increased to 90 days recently. There is a lot of argument to extend it. By giving more comfort to working women, and women represent 30%-40% of the workforce, the policy will cost some money, but it will have a longer-term positive impact to encourage more women into the economy. We see strong productivity gains from this policy.
16. A simple policy such as increasing the maternity leave from 60 days to 90 days, actually took one and a half year to plan and implement and this policy just required a simple directive from the government.
17. So, if you want to implement any new policies, and I am sure Anwar will have his own set of policies, he will still require some time to legislate, implement and to roll-out, and then some time to get public feedback, followed by policy improvements and finally normalization.
18. Assuming if Anwar takes over today, and immediately rolls out his policy vision, and we start the clock running, the work of passing legislations, getting the civil service buy-in, promoting the law, implementing the policy all the way to full public acceptance and normalization will take two years.
19. Two years for a very simple policy. So, if we transition too late, Anwar may not be able to implement effective policies. There are a lot of policies that are more important than maternity leave, more groundbreaking policies such as parliamentary reforms, separation of powers, electoral laws, political financing, anti-corruption, Petronas, and reducing powers of the Prime Minister.
20. You can imagine if a simple policy like maternity leave can take up to 1 year to implement and half year to get feedback, what more the time needed for bigger policies that we have to implement. So, in other words, the transition needs to be quick, to enable effective policies to be implemented by Anwar.
21. Lastly and probably the most important, at least for the politicians, is the issue of political needs. The question of timing needs to be read from a political angle. Now, there are many reports out there about the idea of a one-term government. I have done some calculations too.
22. As you know, I was a co-founder of INVOKE. INVOKE has probably the most advanced modelling and mapping system to gauge political outcomes. Despite being a private entity now, that is INVOKE is not crowdfunded by the public anymore; INVOKE continues to do political monitoring from time to time.
23. I won’t talk about INVOKE numbers because I am not privy to them, but I did learn a thing or two. Now, I know, you know, everybody in this room knows, that GE15 is going to be extremely tough. If anything, we have a 50-50 chance of getting a second term. If you look at the Tanjung Piai by-elections, you know that something is just not right.
24. A united coalition of UMNO and PAS represents a clear and present danger to Pakatan Harapan seats. Some academics have predicted that if UMNO and PAS remain solid, Pakatan Harapan could end up with only 90 seats in GE15.
25. Of course, there can be many permutations in politics. Politics is an art, not really a science. But generally, it is going to be a tough battle ahead for GE15. I know some of you will say that with power, with position of being the incumbent government, PH will have an added advantage. Yes, I’ve factored that in a 10% gain, but you got to also factor in 6 million new voters for GE15. We have 3.6 to 4 million unregistered voters, new young voters about 1.6 million to 2 million. These voters are going to be largely economic voters.
26. In 2018, PH won 5.8 million votes, which is roughly 46% of the total electoral vote. But if you compare to UMNO and PAS numbers, if you combine their numbers, they actually had 6 million votes, 4 million from UMNO, 2 million from PAS, in 2018. Together they, in fact, got 48%. Bear in mind those numbers are from 2018 when the mood and sentiments were largely with us. Of course, a proper analysis is way more nuanced with the first past the post system but, we can clearly see that we will be in danger in GE15.
27. That being the case, and the fact that most of us agree that Tun Mahathir is not going to lead us into the next election, an earlier handover is clearly better for the prospects of Pakatan Harapan MPs, to be re-elected. So, if politicians are feeling a little bit lethargic about reforming, they should at least be concerned about their own personal seats and be worried about their own re-election prospects.
28. Senior leaders in Pakatan Harapan must surely be aware of this, and they must act, to save their own parties and their own seats. Now, I don’t see a scenario where there will be a vote in parliament for the timing of the transition of power. Especially not when we have a strong coalition. That is just crazy. I don’t see 222 MPs standing up in parliament and making a vote on timing. That is not going to happen. Because there is just no point to the exercise. The point is that Pakatan Harapan, in particular, the presidential council, need to decide and talk to Tun Mahathir and talk to Dato Seri Anwar about a firm transition date.
29. Once the date is sorted, then PH can proceed to get three things sorted; economics, policy and politics for re-election. First, get the economy back – give the necessary confidence to the domestic and foreign investors. Two, get the policies on track, to actively reform this country as fast as possible, implement separation of powers, independent parliament, political finance. And then, third, to make sure that PH politicians have enough time to win back and claw back some public support to win the GE15.
30. From these three main, broad topics of economics, policies and politics, and I’ll be very happy to answer some specific questions later during the Q&A. These three topics clearly favour an earlier transition.
31. To me, it is important to uphold the gentlemen’s agreement between the two very senior leaders, Tun Mahathir and Dato Seri Anwar Ibrahim, and for the sake of Pakatan Harapan staying intact together. I think it is also about basic fairness, the party with the majority of the MPs should lead. It is not unreasonable at all, that the biggest party should lead the coalition after 2 years. So, for me, for the sake of PH’s unity, the gentlemen’s agreement, should be honoured by all parties and we should prepare for a May 2020 transition.