Hung parliament won’t help economy, market sentiments, say analysts


Ravin Palanisamy

Researchers say the post-election crisis and latest political developments are not helping the economy or market sentiments. – The Malaysian Insight file pic, November 23, 2022.

THE delay in appointing a prime minister and formation of the government will only affect the already pummelling economy and market sentiments, political analysts said.

The outcome of Saturday’s general election, where no party or coalition could muster a simple majority, resulted in a hung parliament.

Pakatan Harapan (PH) won 82 seats and Perikatan Nasional (PN), 73 seats. Both coalitions need to form alliances with other coalitions to set up a new government.

PH and Barisan Nasional (BN), which has 30 seats, have held talks of working together, but to date, the outcome is not officially known.

Yesterday, PH chairman Anwar Ibrahim, after having an audience with Yang di-Pertuan Agong Al-Sultan Abdullah Ri’ayatuddin Al-Mustafa Billah Shah, said no decision has been made yet.

PN chairman Muhyiddin Yassin, who also had an audience with the king, later told reporters that they will not work with PH.

The imbroglio is expected to continue today when BN lawmakers have an audience with the king. The palace said this will allow the king to decide who to appoint as the 10th prime minister after having an audience with them individually.

Researchers said the post-election crisis and latest political developments were not helping the economy or market sentiments.

International Islamic University Malaysia’s Tunku Mohar Tunku Mohd Mokhtar said economic uncertainty is projected to continue until a government is formed.

“The delay in appointing the prime minister and the absence of any timeline has negatively affected the market’s confidence,” he said.

“There is uncertainty over which coalition is able to form the government. I think the longer the delay, the lower the confidence will be.

“The local financial market will respond to the political situation once it becomes clearer. It would rather wait until there’s an assurance that the government that is formed is friendly to the market, with stable policies that are conducive to economic growth.”

It was reported that Malaysia’s stock market and currency dipped after the polls.

On Monday, the ringgit fell almost 0.8% against the US dollar in early trading before recovering slightly yesterday, as markets weighed the possibility of an extended period of political instability.

Kuala Lumpur’s benchmark index also fell.

Pakatan Harapan chairman Anwar Ibrahim says the coalition is working to form a unity government with Barisan Nasional for the country’s stability. – The Malaysian Insight pic by Kamal Ariffin, November 23, 2022.

University of Tasmania’s professor of Asian studies James Chin also echoed Tunku Mohar, saying that the crisis has to be resolved soon.

Chin believes that the country could suffer more and, hence, should not prolong the issue of appointing a prime minister.

“The bottom line is that the king realises that he has to resolve this very quickly because the market will be very much unstable,” he said.

“The current situation in Malaysia is already bad and they can’t prolong this any longer.”

Chin claimed that Anwar would need to get the support of a Malay party to form a stable government.

“The king believes Anwar can put together a coalition the fastest and that is why he has given Anwar the chance,” he said.

“So now the responsibility has been shifted to Anwar, and he, in my opinion, has to now get one core Malay party to support the unity government. If not, it may possibly not work.”

On Monday, Anwar said the coalition was working to form a unity government with BN for the country’s stability.

However, no final decision has been reached. – November 23, 2022.


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