A tough year lies ahead

Talks and speculations are directed as the year when Dr Mahathir would step down and allow Anwar to assume the top office


THE new year is just around the corner and is set to be a very eventful one for the country.

2020 starts off with the Visit Malaysia (VM2020) campaign and the country will host the Asia- Pacific Economic Cooperation (APEC) Summit towards the end of the year.

The VM2020 year-long campaign should attract a greater number of inbound tourists, while the APEC summit — the second such event hosted by the country since 1998 — would put Malaysia on the global centre stage for a few weeks.

But it is the development on the political front that will make 2020 especially important. Talks and speculations are directed as the year when Prime Minister Tun Dr Mahathir Mohamad would step down and allow PKR’s Datuk Anwar Ibrahim to assume the top office in Putrajaya.

Anwar, in recent reports, expects that to happen by around midyear, while Dr Mahathir has voiced his intentions to remain till the APEC Summit is over.

If there is a friction to the process would the ruling Pakatan Harapan coalition see its own form of “Brexit”? The outcome of this political risk factor could very well be a make to break moment for many.

Other major events to look out for will be if the government scales down it role in the economy as part of its fiscal consolidation efforts.

Putrajaya will float the fuel prices next year and economists are already predicting inflationary pressures.

While some sections of society will be given a cash subsidy to survive the removal of the subsidised fuel mechanism, household income needs to rise to moderate the price pressures.

At the heart of the scale down will involve how the government and sovereign wealth fund, Khazanah Nasional Bhd, deals with stakes in companies like highway operator PLUS Expressway Bhd and loss-making national carrier Malaysian Airlines Bhd (MAB). Both will be politically sensitive decisions.

The toll road operator is being eyed by a few businessmen and companies while the Employees Provident Fund’s management has voiced it intentions to hold on to its stake in the company.

New reports so far suggest MAB has attracted a handful of bidders. The carrier is losing an average RM100 million a month and has gobbled up some RM20 billion in public funds over the past two decades for its various turnaround plans and cash topups without much success.

There’s hope for the national flag carrier as the business model change by China’s Geely Auto Group at the former national carmaker, Proton Holdings Bhd, is anything to go by.

National oil company, Petroliam Nasional Bhd (Petronas), will continue to remain in the limelight as some states try to seek their fair share of the hydrocarbon wealth.

Sarawak state government’s move to take the company to court to claim some RM3 billion in state sales tax on petroleum products annually will eat into the money Petronas gives to the federal government and its capital expenditure.

The proposed move to encourage state government to become shareholders in Petronas and the possible listing of Petronas Carigali Sdn Bhd on the local exchange, much like Saudi Arabian Oil Co on the Riyadh stock exchange early this month, could fundamentally change the way the company is run.

In 2020 all major political and corporate development will lead to an end in Putrajaya it seems.

Bhupinder Singh is the corporate desk editor of The Malaysian Reserve.