MP SPEAKS | M'sia cannot recover from economic recession with stubborn leader

MP SPEAKS | Malaysia cannot address the financial plight faced by workers and businesses and recover quickly from the economic recession, when a stubborn Prime Minister Muhyiddin Yassin is serving his own political interest.

He seems to be willing to spark off a constitutional crisis by deceiving the king and using the executive to confront the constitutional monarchy. Amongst the three branches of government in the Federal Constitution - Parliament comprising the king, Dewan Rakyat and Senate - is clearly supreme over the executive and judiciary.

The prime minister on behalf of the cabinet had delivered a defiant, unrepentant and even rebellious statement in response to the unprecedented stern royal disapproval and stinging rebuke of the cabinet by the king. 

Clearly, the prime minister and cabinet are digging in against the constitutional monarch in a battle of wills to demonstrate that the executive is supreme.

This constitutional crisis is unnecessary when it is clear that the prime minister is wrong and must resign for refusing to accept the supremacy of Parliament. 

Revoking emergency ordinances without royal assent and refusing to put up the ordinances for debate and vote in Parliament, initially to approve and then to annul it, is clearly contempt for the Federal Constitution built on the foundation of the supremacy for Parliament.

Apart from the damage to public confidence engendered by this constitutional crisis, a quick recovery from the economic recession appears remote. The year 2020 was one of missed economic targets when Malaysia suffered a budget deficit of 6.2 percent of the gross domestic product (GDP) as compared to the initial projection of 6 percent.

It also saw the unemployment rate at 4.5 percent compared to the projected 4.2 percent and GDP growth at (-5.6 percent) compared to the projected (-5.5 percent). 

With continued incompetence, political instability, constitutional crisis and the surge in the Covid-19 pandemic, Malaysia’s economic targets projected under Budget 2021 is likely to be a repeat of the missed targets of 2020.

For 2021, the budget deficit will not be scaled back to 5.4 percent as projected but likely increase to 7 percent. The unemployment rate will not be reduced to 3.5 percent but is likely to increase to 5 percent. 

GDP growth is likely to be scaled down from the overly optimistic Budget 2021 projections of up to 7.5 percent to an anaemic 4 percent despite eight economic stimulus packages of RM530 billion and the RM322.5 billion Budget 2021, the largest in history. 

In other words, our economy will not be normalised by the end of 2021 and will still be smaller than the end of 2019, the last year that Pakatan Harapan was in power.

The contraction of the economy of 5.6 percent in 2020 has hit the ordinary worker and small businesses, particularly small and medium enterprises (SMEs), much harder. SME contribution to the GDP contracted by 7.3 percent in 2020 according to the Department of Statistics Malaysia. 

This 7.3 percent decline is much higher than the decline of non-SMEs GDP which registered a negative 4.6 percent in 2020. This was the first time the SMEs contribution to GDP was lower than Malaysia’s GDP and non-SMEs GDP since 2004.

When SMEs fail, unemployment at 4.5 percent now will only rise. A survey by the Entrepreneur Development and Cooperatives Ministry on June 4 reported that more than 90 percent of micro, small and medium enterprises (MSMEs) risked closure. The SME Association of Malaysia disclosed that 100,000 SMEs closed last year and 50,000 more are expected to suffer the same fate from the total lockdown.

A distracted prime minister fighting for his political survival and in the middle of a constitutional crisis confronting the king has neither ability nor interest to ensure the survival and sustainability of the nearly 1 million SMEs. These SMEs comprise 98.5 percent of all business establishments employing 7.3 million Malaysians in 2020, constituting 48.0 percent of the national employment.

Why is the government confident that the RM530 billion economic stimulus packages and RM322.5 billion Budget 2021 can save all the 1 million SMEs when nothing has worked so far?

LIM GUAN ENG is DAP secretary-general and Bagan MP.

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.