Malaysians elect new government as economy continues to recover

After days of exhaustive campaigning, the former government under Barisan Nasional or the National Front is confident in making a comeback and reinstating Ismail Sabri Yaakob as Prime Minister for a second term in view of his resounding success in putting the economy back on track and securing employment for thousands who had lost their jobs during the pandemic.

Taking over the helm of the government at a time when the country's economy plunged to negative growth in August 2021, Ismail Sabri successfully turned around the economy in a span of just 15 months and most economic sectors subsequently showed an upward trend.

Economists were overwhelmed by his performance. Gross Domestic Product (GDP) reached 14.2 percent in the third quarter of the year compared to 8.9 percent during 2Q 2022 and 5.4 percent in 1Q 2022.

Malaysia's total net Foreign Direct Investment (FDI) inflows for the first nine months amounted to RM54 billion compared to RM29.7 billion recorded during the same period last year, exceeding the levels recorded prior to the pandemic.

Total trade registered double-digit growth in September 2022, expanding by 31.4 percent, reaching RM256.9 billion as compared to RM195.5 billion in the preceding year.

Meanwhile, exports increased by 30.1 percent to RM144.3 billion in September 2022 while imports amounted to RM112.6 billion, rising by 33.0 percent year-on-year (y-o-y).

Trade balance continued to record a surplus, with a value of RM31.7 billion, an increase of 20.9 percent from the previous year.

Ismail Sabri's policies have enabled the country to register better growth as well as keep inflation at bay, recording an inflation rate of 4.5 percent in September compared to 4.7 percent in August, despite having to spend RM77.7 billion on subsidies to control prices of food items which soared due to global warming and the Ukraine-Russian conflict.

It is for these reasons the party's leadership has collectively agreed to name Ismail Sabri the nation's 10th Prime Minister should the party returns to power.

Malaysia's economic performance is being monitored closely by foreign economists such as Shan Saeed who described Ismail Sabri as an action oriented leader and delivers economic outcomes that have created investor confidence.

"Investors expect consistency and this can be seen during the last one-and-a-half years. The government has been able to maintain economic consistency. They have provided the framework and let the private sector run the economy," said Saeed, Chief Economist with Dubai based Juwai IQI, an international real estate technology group that powers property transactions and ownership locally and globally.

Saeed believed that the Malaysian government has given the policy framework and economic confidence to the people that have attracted FDI into the country due to consistent policy.

"One of Ismail Sabri's achievement is maintaining the macroeconomic stability and maintaining economic confidence in the country, global investors like us and many others, view macroeconomic stability as perhaps the most important variable, just like what the government of Ismail Sabri has done," said Saeed.

Policy consistency is equally vital to ensure growth in a structured manner and investors prefer experienced people who understand the economy and can drive the economy in a much more professional manner.

Currently, Malaysia is ranked second in ASEAN, ahead of Singapore and Indonesia and other economies in terms of how government faired since September, Saeed said adding that the main focus has been to get the population vaccinated, so 98.99 per cent of the population is vaccinated.

According to him, that's why the Malaysian government was able to open the economy ahead of its northern and southern neighbours. The others were struggling but Malaysia was the first to open its economy giving it a boost and that gives a positive signal to global investors that Malaysia is ready for business.

He acknowledged that the Malaysian government has done a "pretty good job" in strategising its economy while the global economy is on the edge of a massive recession and systems are cracking up.

"For instance, oil prices and coal prices are up while the bond and equity markets are taking a beating. So, what the government has done has given confidence to local investors. Once you have confidence in local investors only then FDI will come into the picture, he said.

"When Intel made the biggest investment in ASEAN region of US$7.5 billion (RM30 billion) which include Malaysia, that sends a positive signal not only to the region, but also to global investors that Malaysia is on the move. And that's why a lot of investors are moving to Malaysia.'' he said.

Another factor that have drawn investors consideration is Ismail Sabri's policy in curbing corruption in his administration.

"He has said nobody is above the law, and everyone has to obey the law and the prime minister has proven his words when a former leader of the country was charged in court for corruption, the government did not interfere. The rule of law is strong, the judiciary is strong in Malaysia," he added.

He added that when the judiciary is strong, that gives positive signal to global investors and also to local investors.

Some 945 candidates representing various political parties will be contesting for the 222 parliamentary seats in the 15th General Election on Saturday. A party which wins a simple majority of 112 seats will form the next government. However, if any of them failed to secure the seats needed, the next option is for the political parties to form a coalition government.