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Thursday, November 24, 2011

Economic policies that do not add up

P36: Kubang Ikan, Kuala Terengganu. Anwar Ibra...

Analysis By Baradan Kuppusamy

The lack of economic expertise in Pakatan Rakyat underlines the many difficulties the Opposition would encounter if it captures Putrajaya.

WHILE Pakatan Rakyat has been quick to capitalise on Barisan Nasional’s political setbacks like the current controversy over the National Feedlot Corpora-tion, it is weak in its economic policy formulation, and one reason is the lack of qualified economists.

This shortcoming would weigh heavily on the coalition if it were ever to capture Putrajaya.

Its weakness in formulating economic policies like the Alternative Budget 2012 that Datuk Seri Anwar Ibrahim read out to reporters a day before Prime Minister Datuk Seri Najib Tun Razak presented his Budget in Parliament, is a sign of its incompetency in ruling the country.

The Pakatan Rakyat budget was a wishy-washy affair. More thought should have gone into it beyond a cursory glance at where revenue is coming from and the expenditure incurred.

Instead Anwar just “handed out cash to the poor, teachers and farmers”.

The failure to formulate a serious, alternative Budget is yet another example of the weakness of the coalition that would affect their ability to rule the country.

Its inability to go beyond making unrealistic and populist demands and criticising the policies formulated by the experts i.e. Bank Negara economists, is a setback to Pakatan growing into a valid and competent coalition.

Populist policies are easily made but their implementation is hard, if not totally unrealistic.

For instance, Anwar campaigned in 2008 that if you voted for him and he takes Putrajaya, the price of oil would be lowered the very next day..

He can do it by further subsidising the price of “subsidised oil” – and that is economic madness and unsustainable.

Furthermore, Anwar is economic adviser to the Selangor government, earning a fee of just RM1 – another populist measure that gels well with the rakyat in the state. But how much FDI (foreign direct investment) has he brought into Selangor?

Beyond sloganeering like merakyatkan ekonomi, what are the realistic economic steps that he has taken thus far?

The lack of qualified economic formulators is glaring and shows how the Barisan federal government is far superior in that respect to the proposed Pakatan government when it comes to administering the economy, warts and all.

This lack of economic know-how was apparent in a leaked US State Department cable by Wikileaks on Nov 8, which stated that Pakatan lacked economic policy formulators within its ranks and how this shortcoming weighs on them as a coalition.

It also speculated why this was so and suggested that it could be due to Pakatan’s failure to give them high wages and that “politics” could have frightened them away.

The lack of economic expertise among them underlines some of the many difficulties they would encounter if they capture Putrajaya.

While the Opposition-run states are struggling without competent experts, their politicians also show little aptitude for heavy economics.

Except for Tony Pua, the DAP MP for Petaling Jaya Utara, there are no competent economic advisers working with Opposition controlled states that are struggling to line up economic advisors, the cable noted.

Pua is a one-man-band and he has his hands full. Besides, “one swallow does not make a summer”.

And, if Pakatan captures Putrajaya, PAS will pull the country one way and PKR in another and the DAP, a third way – demanding that affirmative action policies are abolished immediately.

Each is committed to its own constituents in different ways. There is little cooperation among them on economic matters beyond agreeing on political matters like seat sharing and working to capture Putrajaya.

There’s is no deal on how Pakatan would rule the country, no documents stating the basis of their rule and no power-sharing formula.

They have no shadow Cabinet.

Their power-sharing formula, in the event they capture Putrajaya, is simply that Anwar would be prime minister and his deputies would be DAP’s Lim Kit Siang and PAS president Datuk Seri Abdul Hadi Awang.

There is also not much difference between Barisan and Pakatan in the broad policy framework for the country. They are both for an open economy and for FDI to grow the economy.

But there the similarities end and the differences emerge.

There are differences over affirmative action policies that is favoured by Barisan, PKR and PAS but not by the DAP. This is a cause for dissension.

While all three Pakatan parties are against corruption along with Barisan there is a realisation that much of the corruption is linked to the affirmative action policies and that corruption can only be defeated if that policy is abolished.

This is the DAP’s stand and it is markedly different from the rest.

Pakatan’s weakness in economic matters would show immediately and in a serious manner if they ever were to capture power. There would be chaos as they find their bearings, if at all.

The state will be pulled in different ways – between Anwar’s populist promises, PAS’ Islamic economics and the DAP’s desire to streamline the civil service and abolish affirmative action.

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