How COVID-19 has Strengthened an Unlikely Malaysian Government’s Position?

By Edika Amin | April 17 2020, 7:40 PM SGT 

Introduction

One does not need to look far to see how a crisis can quickly sway public perception. The recently concluded South Korean legislative elections held on Wednesday, 15 April has not only given President Moon Jae-in and his Democratic Party a majority but his 180 seat win in the 300-member National Assembly has catapulted his party to a supermajority status. To put this into context, President Moon Jae-in’s ruling Democratic Party has claimed the biggest majority in the National Assembly by any party since the country’s transition to democracy in 1987.

Moon’s party win is a vindication of his government’s response to the coronavirus outbreak. It also paves the way for him to push on with his agenda, which includes “inclusive” economic policies, reform of the prosecution system, the Korean Peninsula peace process and transformation of Korea as a data economy. It is worthy to note that just six weeks ago, President Moon’s approval rate stood at 42 per cent. However, due to this Administration’s handling of the virus he reached a high of 55 per cent in early April, a number last reached in November 2018.

On the other side of the spectrum, we can look at President Donald Trump who has received his lowest approval rating over the past five months, according to a new Gallup poll shared on Thursday (April 16). Trump’s 43 per cent approval rating shows a six percentage point decline from a 49 per cent approval rating he received in mid-March (his all-time best). The newest poll results come amid the COVID-19 pandemic where many feel that he has downplayed the severity. His handling of this crisis will make or break his reelection campaign come November 2020

The case of Malaysia

February 2020 marked uncharted waters for Malaysia. A political debacle due to succession planning of the Prime Minister post resulted into the implosion of the Mahathir led Pakatan Harapan (PH) Government and the defection of Mahathir’s Bersatu party from the PH coalition. After almost a week of internal politicking, the following unfolded on 29 February 2020:

1. In a twist of events, Mahathir realigned himself with PH and as a result, garnered the support of Warisan who have been loyal to Mahathir. (This partnership collapsed after the announcement of PM).
2. In the afternoon, the King made the announcement of Muhyiddin Yassin from Mahathir’s Bersatu Party as the eighth Prime Minister of Malaysia.
3. In the evening, key East Malaysian Parties namely Gerakan Parti Sarawak an East Asia coalition formally announced that they support Muhyiddin Yassin as Prime Minister, but is not part of the Perikatan Nasional Government (Consisting of Bersatu, Malaysian Islamic Party and Barisan Nasional).

Till this day, the Palace has not revealed the numbers of MPs that are in support of Muhyiddin. Therefore, the Malaysian political situation remains soft:

1. A government that is formed by a simple majority (112 seats) is inherently unstable since a small move in MPs can result in the fall of the government.
2. Bersatu Deputy President Mukhriz Mahathir has also questioned how 36 MPs of Bersatu are in support of Muhyiddin Yassin if six of them are backing Mahathir.

Given this, there may still be changes once parliament reconvenes on 18 May which may call for a no-confidence vote for Muhyiddin. What is clear at this juncture is that this is a backdoor government as it bears no resemblance to the government that was originally elected in 2018.

How Muhyiddin Yassin’s Government Made the Best of COVID-19

A triple whammy

Malaysia’s sluggish economic conditions have resulted in Bank Negara Malaysia revising the country’s GDP outlook for 2020 to the range of -2.0% – 0.5%. This is a result of a triple whammy that has plagued the country’s economic conditions which consist of:

1. Lockdowns (domestic and international) resulting to key sectors in Malaysia such as tourism, manufacturing, exports, commodity, construction and public consumption which have either come to a grinding halt or slowing to levels that have only been seen during Global Financial Crisis;
2. The collapse of oil prices which has stifled the country’s revenue; and
3. Capital flight due to the political instability in Malaysia which saw over RM2.5 billion of foreign capital outflow during the week of political instability in February coupled with newly released data in March which recorded another further RM17.8b sell-off of Malaysian bonds, equities by foreigners (highest since May 2018) due to the ailing economic conditions.

The Stimulus Package has helped shift public perception

To address the issues above, Malaysia announced two stimulus packages on February 27^th and March 27^th. Total spend (on paper)was worth RM250 billion (17% of Malaysia’s GDP). Although this looks like a ‘healthy’ stimulus package the numbers are rather deceiving.

• Over 40% of the quoted stimulus package amount is in the form of a moratorium on all loans for a period of six months (RM100 billion) which does not incur any cost to the Government.
• The stimulus package also factors in the Employee Provident Fund contribution deductions and i-Lestari and Private Retirement Scheme withdrawals facilities totalling RM50 billion
• The Government has merely created a channel to allow citizens to withdraw their own retirement savings which comes at no cost to the Government.

A great deal of the stimulus package is also in the arena of one-off cash payments which would not have lasting effects. Furthermore, the Prime Minister has also achieved political mileage to strengthen his position in the eyes of the public for the upcoming no-confidence vote in Parliament on May 18. This was done through:

1. All Ministers and Deputy Ministers have pledged two months of their salary into a COVID-19 fund that will help the daily expenses of COVID-19 patients in Malaysia; and
2. The stimulus package also targets small infrastructure projects in East Malaysia as the new coalition attempts to strengthen their hold on the region.

Garnering Silent Support

As the country remains occupied with the Movement Control Order and rise of COVID-19 cases, silent manoeuvrings are taking place to ensure that when Parliament meets in May, it will have the necessary number of MPs to survive a no-confidence vote. This is done by placing MPs in key management positions in Malaysian Agencies and Government Link Companies. As covered by Malaysia Focus Chief Editor, Mr P. Gunasegaram, some key movements that have gone under the radar include:

1. According to an April 3 report by Singapore’s The Straits Times, Tan Sri Mohd Bakke Salleh had been shown the exit at the Malaysian Palm Oil Board (MPOB).
2. On April 3^rd Dr Nungsari Radhi stepped down from Khazanah Research Institute.
3. Termination of Datuk Noripah Kamso as Bank Rakyat chairman on April 3
4. Datuk Noor Farida Mohd Ariffin had been removed as Human Resource Development Fund (HRDF) chairman. Her entire board was sacked, too.

• Noor Farida had been replaced by Datuk Nelson Renganathan, the chairman of Regent International School and former MIC Youth chief.

A lot more heads are expected to roll in the coming weeks paving the way for politicians to helm these key positions in exchange for support to the current Government.

Commendable work nonetheless

All and all, given the cards the Prime Minister and his Administration were dealt, his Government has done a decent job in containing the COVID-19 pandemic. Malaysia’s mortality rate remains at 1.6% far below the global average which stands close to 4%. Criticisms of the stimulus package were taken into account especially for Small and Medium Enterprises which have been given additional funding for cashflow purposes both in the forms of business loans and payroll support. The Prime Minister has also spoken about the importance of social security during the emergency ASEAN Summit held earlier this week which signals that he is interested in revamping Malaysia’s current social protection framework which has been in a state of fragmentation for decades. In his words “This is not the Government you voted for but we care for you”

If I had a crystal ball, I would put my money on the Prime Minister and his Government surviving the no-confidence vote in May and continuing to govern Malaysia until the next election in 2023.

Sources:

1. https://www.pmo.gov.my/prihatin-economic-stimulus-package/
2. Muhyiddin’s grand plan, P Gunasegaram, Focus Malaysia 9 April 2020
3. https://www.bbc.com/news/world-asia-52304781
4. https://www.newsweek.com/amid-coronavirus-crisis-donald-trumps-approval-rating-hits-5-month-low-new-gallup-poll-1498401

Image credits: Anadolu Agency