LETTER | Malaysia may pay heavy price with policy flip-flops

LETTER | For the longest time, Malaysia is a regional haven for foreign investors due to our stability. Unlike countries like Thailand, Cambodia, or the Philippines, we have a stable government and foreign investors know what to expect.

They know that they won't wake up one morning to see tanks rolling in the streets following a military coup and their assets nationalised.

Consistency and stability are the cornerstones of our economy. As a small-time business owner who regularly mingles within corporate circles, especially in social events, I can vouch that entrepreneurs generally prefer long-term stability over incentives like tax breaks.

So, it came as a surprise when Prime Minister Anwar Ibrahim recently announced that his government was not averse to policy flip-flops if it was for the betterment of the people.

This is over his administration's decision to keep subsidies for chicken and eggs, although it had earlier announced that prices would be floated starting July 1.

Slippery slope

Putting aside the economic merits of the decision, the optics have raised concerns among the investment community about the slippery slope the government now finds itself in.

If today the government can so flippantly disregard its earlier decision on the poultry industry involving billions of ringgit, what's next?

Will it next withdraw incentives for foreign direct investments announced in the budget? Will foreign investors see their assets nationalised? While the two examples above are not likely to happen anytime soon, Anwar buckling under political pressure to continue with the subsidies for chickens and eggs has caused worries among the business community.

A government cannot have a "let's flip flops for the sake of the rakyat" as a policy. This spooks investors and spoils their long-term plans. This also shows that the government is not efficient and can be easily swayed by political pressure into making decisions that may be detrimental to the country in the long run.

A government that is prone to making policy U-turns also does not instill confidence in the rakyat. Let's not forget that one of the reasons why former prime minister Abdullah Ahmad Badawi's government lost its two-thirds majority in the 2008 general election was because of his administration's frequent flip-flops.

Let's hope that Anwar will be able to stay the course when running the country and not be easily swayed into flip-flops. Otherwise, not only will we see capital flight from spooked investors, Anwar will pay a dear price just like Pak Lah did.

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