Full statement from Ng Yeen Seen, the CEO of Centre for Research, Advisory & Technology (CREATE) on May 2, 2018.
If the Opposition (Pakatan Harapan) wins:
1. ECRL, TRX, Country Garden and all the China projects will be halted and Malaysia will be sidelined from OBOR (One Belt One Road).
China will buy more palm oil from Indonesia rather than Malaysia. Malaysia’s palm oil industry, after being boycotted by the EU, will have more problems with China’s boycott.
Our port industry, especially at West Port and Port Tanjung Pelepas, will decline and many Malaysians will lose their jobs.
Shipping, logistics and even manufacturing will decline as Malaysia, strategically positioned between the East and West sea lanes via the Straits of Malacca, will lose its significance.
It will become cheaper for factories to relocate to Thailand. Industry 4.0 (the current trend of automation and data exchange in manufacturing technologies) will also take a bad hit, not to mention the DFTZ (Digital Free Trade Zone).
2. GST will be abolished and the Government will lose a huge income stream.
With Petronas not as formidable as it was in the 1980s, 1990s, and the first decade of the 2000s, the Government will have to find alternative income sources.
Privatisation will be increased to sell more assets to “friendly parties” via cheap loans guaranteed by the Government.
The national debt will go up like it did in the 1980s and 1990s. Remember the debt-to-GDP ratio back then?
3. Tolls will be abolished by the Government to buy back (highway) assets, as Tony Pua has said.
Without oil money, and with China and the Middle East not as strong as before due to the decline in oil prices (plus, they have been focusing on their own super projects like Dubai, Qatar and Bahrain) and with Saudi Arabia also modernising, Malaysia has nowhere to go except to borrowing money from, say, the United States, while at the same time privatising other assets.
Without GST, government employees will also be retrenched to work with corporations, which are already overburdened with high labour costs, with many moving overseas especially the Chinese tycoons.
So privatisation to cronies to hire these government servants will only make sense.
Crony capitalism will return where indirect taxes in other forms like in the 1980s and 90s will return.
Think about it, with the oil subsidy in the 1980s and 90s, the price of petrol at the pump was three to four times the price of Brent crude oil.
Now without the oil subsidy, the price ratio of pump to Brent is only 1.3 times.
If the opposition wins , they will gloss over taxes and call it a subsidy to hoodwink the rakyat.
4. BR1M will also be abolished and the B40 people (those in the bottom 40% of income) will be encouraged to work hard and be thankful to newly privatised companies.
However to be globally competitive, these privatised companies will have to keep costs low and our high income nation dreams will be destroyed.
Foreign workers will return as in the 1980s and 90s to compete with locals. Industry 4.0 modernisation, which the whole world is going through, will not happen in Malaysia.
The NEP (National Economic Policy, affirmative action for bumiputras) will come back stronger.
Prior to the NEP in 1974, our GDP per capita was only behind Japan and Singapore in the whole of Asia. But by 2003, our GDP per capita had become lower than Korea, Taiwan and Hong Kong.
If the opposition takes over, by 2023 we will be behind Thailand, Vietnam and Indonesia.
This is because as China evolves, their manufacturing costs will be only 20% cheaper than the United States and China-friendly countries will inherit their low-cost economy. But remember, Malaysia will not be one of them.
5. All said and done, privatisation and crony capitalism will return, only that this time, there will be little oil money to bail out mistakes.
The only way is to have fake subsidies funded by the rakyat. The rakyat will suffer but will still clap their hands.
The happiness index will be the key KPI, just like in some countries, where the poorest people in the world are also the happiest.
Note: Ng Yeen Seen is a public intellectual and a young thought leader. She was appointed as an ambassador for TN50 (National Transformation 2050) by the Government of Malaysia.
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