Three main factors should be on top of the list along with the 10 promises made by the new govt

By FARA AISYAH / Pic By ISMAIL CHE RUS

The new government needs to strengthen investors’ and public’s confidence, alleviate the cost of living, and reduce fiscal risks to expedite the recovery of the country’s economy.

Economist Prof Dr Yeah Kim Leng (picture) said that these three elements together with institutional reforms, enforcing rule of law, building trust, and improving governance and accountability are key to rebuilding the country.

“This will strengthen investor and public confidence that forms the bed-rock of a robust and resilient economy where quality of institutions is a necessary condition for high and sustained economic growth,” Yeah told The Malaysian Reserve (TMR).

He said it is important to alleviate the cost of living borne by the low-and middle-income groups, while boosting employment and wage growth concurrently, so that the deterioration in living standard experienced by these groups can be arrested and reversed.

He added that such steps would also be in line with the country’s growing prosperity, which would also induce more inclusive growth.

Yeah said the new government needs to reduce fiscal risks since a number of the popularly demanded measures such as the reversion of the Goods and Services Tax to Sales and Services Tax, as well as the targeted subsidies and abolishment of toll will require spending re-prioritised and new revenue sources.

The effort would also include cost-saving measures while increasing the efficiency among the government sectors.

“This will require the government to keep the fiscal deficit in 2018 to below 3% of gross domestic product that was achieved in 2017,” Yeah added.

Asian Strategy and Leadership Institute director Tan Sri Dr Ramon Navaratnam concurred that the new government must continue to strengthen the people’s confidence.

“First of all, the new government needs to get the people’s confidence which can be done by appointing the Cabinet soon — with members who are regarded as honest, dedicated and efficient people.

“Otherwise, the economy including the currency will not improve,” he told TMR.

He said the new government also needs to have a plan to finance the new concessions.

“People now want to know the cost or they will not feel confident. They want to know whether it is possible for the country to bear such cost,” Ramon said.

He added that after 60 years, there is a need of a major review on the previous administration, including its ministries and government agencies.

“We cannot do old things the old way for a new future. To be a progressive nation, we need to review and revise everything that is regressing,” he said.

Yeah also lauded the new Prime Minister Tun Dr Mahathir Mohamad’s intention to keep not more than 25 ministries compared to 35 in the previous administration, in an effort to minimise the size of the government and cut expenditure.

The government is also expected to consolidate overlapping functions among departments beginning with the streamlining of ministries.

“Besides cutting wasteful expenditure, a leaner and more focused government will enable more effective delivery of public services as resources can be better allocated and capabilities strengthened,” Yeah said.