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Johari on 3 critical factors needed to heal the economy

KUALA LUMPUR: A former second finance minister has underlined the importance of political stability, competence and trust in helping the country fix its struggling economy.

Johari Ghani, who is also Titiwangsa MP, said the country must brace for some short-term pain for the sake of future generations.

On Tuesday, during a debate in the Dewan Rakyat, Johari outlined the challenges facing the economy, such as a slower economic growth, reduced household incomes, unemployment and underemployment, lower government revenues and rising poverty.

“We can’t afford to have three prime ministers in four years again. Investors will lose confidence,” he told FMT in an interview, adding that all parties must do their part to ensure political stability.

He said political stability was key to ensuring that necessary but unpopular policies will not be abolished whenever there was a change of government.

In 2018, the government led by former prime minister Dr Mahathir Mohamad abolished the unpopular goods and services tax, a move which led to an estimated RM20 billion annual revenue shortfall.

“Secondly, we need a team, an experienced and competent team to fix the problems faced by the country and chart short-term and long-term strategies.

These strategies need to be communicated to the masses, including the realities of facing some short-term pain and the longer-term benefits.

He cited the example of targeted oil subsidies, saying it was not an easy move but one that was needed.

The government has been considering the use of targeted fuel subsidies, which could help to reduce government spending. Last year, some RM37.3 billion was spent on fuel subsidies.

“Thirdly, we must have a government with integrity and credibility, so that the people, who will endure short-term pain, will trust us.

“When you see a doctor and he prescribes you the bitter pill, you’d take it as you believe it will heal you, right? That’s because you trust the doctor. But if you don’t trust your government, would you be willing to tighten your belt if they ask you to? No, you won’t.

“So if the government has the ability, credibility, experienced and competent leaders, and political stability, it can execute (its plans) and the people will trust you,” Johari said.

Source : FMT

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