THE “100 days” score card is pretty meaningless in the context of economy policy and reform but now is as good a time as any to ask whether there have been tangible signs that Prime Minister and Finance Minister Anwar Ibrahim has begun to stabilise the economy since assuming premiership.

The background is not strong. We had two recessions and an inflationary boom under the previous finance minister that caused high interest rates, closed tens of thousands of businesses, hundreds of thousands of jobs lost and wiped out the pensions of millions of people.

So we are in a much better situation under Anwar as finance minister. The economy and the financial markets are calmer now and Anwar is well known and well respected internationally with a reputation for sound economic policy.

We expect lower but more stable growth, lower inflation and hopefully more stable interest rates, although there is still a chance of another small increase. Debt management is high on the agenda and the deficit is forecast to fall as a percentage of GDP. Fiscal policy has been refocused in terms of revenue and spending and overall the foundations look more stable.

It has been a very short time and it is rather too early to expect much impact. Nonetheless some policies will be beneficial. The problem is that government communications on economic policy have been terrible so we need to identify the successes for ourselves.

For example, freezing utility tariffs will benefit millions of households and 98% of firms and will hold down price increases, helping to slow inflation during the year.

Bringing forward social assistance payments to January helped with the cost of living for millions of people.

Rescheduling and retendering development projects has identified billions of ringgit in savings and overall development spending has increased.

A refocus on agriculture and food security offers the promise of significant reform of the agricultural sector and the communities that rely on it.

The amnesty on foreign workers that have overstayed their visas releases 380,000 workers to take up employment immediately avoids expensive rehiring and agency fees linked to forced labour.

Budget 2023 was more pragmatic than populist with few “wow” factors but many initiatives show Anwar’s administration is moving away from the subsidy and cash handout culture.

The government has made some useful changes especially to the B40 group with incomes below RM2,500. This is the start of a universal basic income scheme and the government should be more assertive about this. The RM600 food vouchers to this group should be scrapped and converted to cash transfers.

The reforms of taxes in Budget 2023 are small but hopefully signal the start of a full review of tax and revenue including the Capital Gains Tax and even the efficacy of the Goods and Services Tax and it is good that the immediate reintroduction of GST has been resisted.

The T20 tax and the luxury goods tax will have no effect on investment and very little effect on incomes. The luxury goods tax would have to be 35% to raise just 1% of government revenue. The T20 income tax will affect fewer than 150,000 people and raise only between RM1.7-3.4 billion or 0.6-1.2% of government revenue. Nonetheless they do signal a more equitable approach to taxation overall.

Against this mostly positive background we have seen some disappointments on reform and no clear reform agenda. The minimum wage increase has been postponed, making poor people poorer.

The reform of PTPTN has been ripped up and it is now in a very precarious state.

The targeted subsidies are no closer and we are relying on policy projects which are subsidies in disguise. The Menu Rahmah scheme is well-meaning but unsustainable and will fail, so it should be quietly scrapped. The new People’s Income Initiative looks expensive and cumbersome. It is not a full reform and will not remove the need for cash handouts.

The Parliamentary Budget Office has not been announced yet even though it was promised in the Pakatan Harapan manifesto.

Some argue that institutional reforms have been put on the back burner in place of political stability and that Anwar’s comparatively low support from the Malay community might influence his economic policy moving forward.

In reality, Anwar has wide support across the whole of electorate, including the Malays. The government is not at risk of imminent collapse despite what opposition leaders might dream of and the upcoming state elections will have little or no impact on the overall political balance.

Against this backdrop Anwar can and should be more confident about pushing forward the reform agenda but it must be much more structured and communicated much more clearly for the benefits to be maximised.

* Professor Geoffrey Williams is an economist at the Malaysia University of Science and Technology and Mohamad Shafiq Sahruddin is a student at the Arsyad Ayub Graduate School of Business, UiTM.

* This is the opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insight. Article may be edited for brevity and clarity.