THE upcoming leadership transition is a critical factor that will affect the health of the economy this year, an economist said today.

This is because foreign and domestic private investors are keeping a close eye on whoever takes over as prime minister, and whether the policies and direction followed in the past 20 months will be continued, said Lee Heng Guie.

“Investors and businesses want three Cs – clarity, consistency and continuity – while maintaining a competitive and business-friendly environment,” said Lee of the Socio-Economic Research Centre (SERC).

“Investors know that there is a leadership transition coming. They want to know whether there is certainty and continuity that the policies of the past 20 months will continue,” said Lee, SERC’s executive director.

“What you start, you should continue,” he added in the SERC’s briefing on the 2020 economic outlook today.

The transition between Prime Minister Dr Mahathir Mohamad and Anwar Ibrahim is one of the most anticipated political events this year, and will set the tone and direction of the government until the 15th general election.

Dr Mahathir had indicated that he will hand over the office to Anwar in November after the government hosts the Asia-Pacific meeting.

However, some leaders in Anwar’s party, PKR, want the handover to happen earlier in May.

https://www.themalaysianinsight.com/s/212398

Lee echoed warnings by other political and economic analysts that bickering between and within Pakatan component parties would dampen voter and investor outlook.

“An unstable political environment may undermine investors’ confidence, reduce investment and hinder the pace of economic development.”

Besides a smooth leadership transition, the Pakatan Harapan government must set clear policy directions in the upcoming 12th Malaysia Plan, which is the first leg of its 10-year national development agenda, the Shared Prosperity Vision 2030.

Businesses and investors are also closely watching out for the new industrial master plan.

“The government must also start delivering on its election manifesto promises, and those that cannot be fulfilled must be explained.”

The administration must also have an effective strategy to communicate its policies and problems, and to listen to feedback from stakeholders.

“There must also be no delay or slowdown in the disbursement of funds earmarked in the national budget,” he added.

This is since leakages in government spending can affect the national economy via slowdowns in investment and consumption. – January 14, 2020.