PAKATAN Harapan is in trouble if people do not feel they made the right decision in changing the government on May 9 last year, Lim Guan Eng said.

The finance minister said this when he met the Malaysian diaspora in Washington DC on Saturday.

“The people of Malaysia must feel they made the right decision of changing the government.

“And that choice is only correct when they feel that not only has life gotten better under the new PH government as compared to BN, but their children have brighter futures.

“If we are unable to make the people feel that, then we are in trouble,” he said in his speech.

On Saturday, PH lost the Rantau by-election – its third in a row – to Barisan Nasional.

The administration, which celebrates its first year in power next month, has been criticised for not solving bread-and-butter issues, like reducing the cost of living; fulfilling some of its election manifesto pledges; introducing some unpopular policies; and flip-flopping on others.

Reforms crucial

Lim, who is DAP secretary-general, said Malaysia needs to improve its economy and make its comeback as the Asian Tiger.

To do this, he said the PH government must reform the nation’s institutions and build the industry of the future.

“I cannot over-emphasise the importance of institutional reforms. Malaysia can no longer grow by building more and more mega projects.

“These institutional reforms will help raise our growth quality and make it inclusive so that everyone has a rightful place under the Malaysian sun,” he said.

Lim said economic policies, fiscal consolidation, institutional reforms and clean governance must be based on competency, accountability and transparency, and be people-centric to generate growth and jobs, improve incomes and purchasing power, and enhance entrepreneurship.

Some reforms done

Lim acknowledged criticisms that the PH administration had been slow in delivering some of its election promises, but so far, some major reforms had been successful.

He said PH had restricted the prime minister from taking on the finance portfolio and removed political interference from government-linked companies by appointing professionals to the boards of directors.

The government also made broadband industry players half their prices while doubling their speeds to drive digital economic growth, and released its hold on the media, Lim said.

“The government no longer controls the media, unlike last time when Umno held Media Prima and MCA owned The Star while in power.

“Today, if you read the mainstream newspapers, you will find that these opposition-linked media can be quite courageous in their criticism of the government.

“The fact that the government is not taking action against them proves the government’s commitment towards freedom of the press.”

Lim also told the crowd of “clean-up jobs” done by the present government at 1Malaysia Development Bhd, Tabung Haji (TH) and Felda that were mismanaged under the last administration.

“The government is serious about the clean-up and is pumping RM17.8 billion into TH and RM6.3 billion into Felda to save these institutions from ruin and to rebuild them into the respected institutions that they once were.”

He also spoke about slashing the cost of “over-designed and overpriced” public projects like the LRT3 (by RM16.6 billion of 47%) and MRT2 (by 22% or RM8.8 billion) by re-adjusting its scope to cater to more realistic traffic projections without hurting the quality of service and construction.

Better management of finances

Lim also spoke about how the open tender system was now the practice of the public sector to curb power abuse and corruption; as well as zero-based budgeting.

“These measures should increase the efficiency of government spending and reduce wasteful expenditure that we regularly read before in the auditor-general’s annual reports,” he said.

The way Malaysia keeps its accounts has also changed from cash-basis to accrual basis accounting to increase accountability and transparency in public finance.

This, Lim said, will consider off-balance sheet debt and off-budget spending more systematically into the government’s books.

“The previous government was prone to committing off-budget financing in order to achieve low fiscal deficit. But in truth is such low figures did not reflect the actual situation.

“After accounting for various off-budget expenditure into the government’s books, we have reset our 2018 deficit target to 3.7% of GDP, from the previous target of 2.8% set under the previous administration.”

This deficit level will be gradually reduced to 3.4% this year, 3.0% in 2020 and 2.8% or less in 2021, he said.

“We have shared this with Fitch, Moody’s and S&P. After listening to our plan, they have decided to keep the Malaysian government’s credit ratings at A-/A3 despite the fiscal challenges we face from prolificacy and corruption of the past.

“This is the level of confidence the top three credit rating agencies have in Malaysia. Ultimately, they understand that these reforms are necessary to make sure that past abuses and corruption would not be repeated in the future.

“And they also understand that if a corrupt government deserved such A- or A3, then an honest cleaner government at least deserves the same rating,” he said, adding that if Malaysia could clean up in less than three years from now, the country has a good chance of getting an upgrade.

Investor confidence

Lim also stressed that foreign investments are “coming into Malaysia in grand fashion”, with approved foreign direct investments rising 48% to RM80.5 billion last year from RM54.4 billion.

He said this is a good leading indicator of the actual investment trend for the next three years, and a sign that Malaysia was gaining from the China-US trade war.

Approved manufacturing FDI from China into Malaysia last year rose 410.8% to RM19.7 billion, he said, while US FDI rose 184.9% to RM3.2 billion.

Lim said the government was also mindful of the need for high-quality growth and jobs, so it was pushing for industries to digitalise and leap towards Industry 4.0.

He said policies and funds in billions of ringgit in the form of guarantees and outright loans are available to support activities involving artificial intelligence, big data and robotics. – April 15, 2019.