Change in unity govt will bring more instability

CHANGE of government, or “Cabinet Changes” as it is called, is an essential indicator of political instability. It is the number of times in a year in which a new prime minister is named and/or 50% or more of the cabinet posts are occupied by new ministers.

It has been found to be associated with lower economic growth. Greater political instability leads to greater uncertainty concerning future economic policies and, consequently, to lower economic growth. (See Jong-a-Pin, “On the measurement of political instability and its impact on economic growth” European Journal of Political Economy 2009)

Studies have since provided clear empirical support for the hypothesis that political instability adversely affects economic growth, with “Cabinet Changes” always statistically significant. (See Ari Aisen and Francisco Jose Veiga, “How Does Political Instability Affect Economic Growth?”, IMF Working Paper 2011)

Aisen and Veiga wrote in their working paper for the International Monetary Fund as follows:

“Political instability is likely to shorten policymakers’ horizons leading to suboptimal short term macroeconomic policies. It may also lead to a more frequent switch of policies, creating volatility and thus, negatively affecting macroeconomic performance.”

On their empirical study to determine the effects of political instability on economic growth, they said:

“Our results are strikingly conclusive: in line with results previously documented, political instability reduces GDP growth rates significantly. An additional cabinet change (a new prime minister is named and/or 50% of cabinet posts are occupied by new ministers) reduces the annual real GDP per capita growth rate by 2.39 percentage points. This reduction is mainly due to the negative effects of political instability on total factor productivity growth, which account for more than half of the effects on GDP growth.”

The message is clear: political instability is harmful to economic growth.

The current unity government, as Kamarulzaman Mohd Nazeem and Shankar R. Santhiram wrote, may not be living up to expectations in offering “something different from what we had under the past administrations.”

Kamarulzaman wondered if it was time for a better alternative.

But there will be more instability with another change of government.

Remember what Johor ruler Sultan Ibrahim Sultan Iskandar said in voicing his concern over rumours concerning the stability of the government?

“Enough is enough. How long more must the 30 over million people of our country endure this situation?” His Majesty asked in a Facebook post. – June 26, 2023.

* Hafiz Hassan reads The Malaysian Insight.

* 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.

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  • Government leadership force changes don't do any good to our Nation. We've seen these the past decade....of late our past leadership ate only interested in their personal agendas and little did they think of the Nation...just look at why we're still championing Malay agendas after NEP was implemented in the mid 70s....still we're a 3rd World country. Get rid of these personal agendas leaders, I believe some changes may happen....please get rid of them.

    Posted 7 months ago by Crishan Veera · Reply

    • Why we are RM 1.5 trillion in debt and ringgit and KLSE is !@#$%!!!!

      Posted 7 months ago by Malaysian First · Reply

  • What UG?

    UMNO/BN/GPS may be pushing back on "reformasi" .... preventing PH from carrying out some promises in it's Election Manifesto.

    That may explain why TP is frustrated.

    P/S When is PM going to get rid of idiotic leaders in his cabinet, civil service, academia, commerce and industry, etc?

    Posted 7 months ago by Malaysian First · Reply