As I wrote these lines, I can say that this is just the beginning of much worse problems to come to Malaysia. We are probably not in an acute crisis position yet but let’s face it, Malaysia does face a series of serious problems. Today, our political crisis has not only dragged this country to a society crisis but now, it is extended to external problems like our current prospect of foreign bilateral relationship, assurance on FDIs as well as our future economic trajectory. Today, with Singapore's exit on HSR, we are definitely expecting more crises (both internal and external) than solutions ever since GE14.
While we are seeing our neighbouring countries Indonesia, moving ahead with Kereta Cepat Indonesia China and at the same time, Indonesia's prospects are growing in a faster pace with more FDIs flowing in these days, what about Malaysia? Sadly, we are nowhere near to either of that. With political instability that breeds uncertainties on policies, no new transformation plan to thrive for the post Covid’s later on, Malaysia would probably be the last option to be considered as the new hub for foreign direct investment. Believe it or not – if we didn’t tackle the crisis promptly, we might be dealing with the longest economic downturn phase in history, which would lead to a potential social crisis as the nation would be the one facing the direct impact of the downturn.
Malaysia ever since GE14 is facing regression mode and will continue to have regressing economic growth for until to date, even when the new government is formed and led by ex Pakatan Harapan leaders voted by the majority, the current government is still struggling on determining the right economic policies to drive this country.
1. Votes for PH are votes for cancellation:
Back in 2015, Andrew Chen Kah Eng, DAP’s assemblyman had constantly emphasizing the failure potential of connecting city-state Singapore and Kuala Lumpur by specifically pointing out on Spain’s failure but he failed to look into the success story of China’s 2008 Beijing Shanghai rail which pretty much the same model with KL-Singapore line that aimed to connect two economic clusters cities. And do note that China’s success stories of modernizing their rails have attracted the World Bank to produce 15 targeted studies on China’s high-speed rail as an example of a successful model of sustainable infrastructure development plan and since then have been publishing the studies through a unit called TransFORM convened by both China and the World Bank. This is an effort done in ensuring the nations around the world are able to achieve one of the infrastructure goals as outlined in the Sustainable Development Goals guideline. And knowing Malaysia for the past decades of Barisan Nasional’s governance, Malaysia under Barisan Nasional had always planned and measured our performance through goals established by the World Bank. Hence, Malaysia and Singapore's initial blueprint as initiated by Barisan Nasional is definitely modelling to what has been outlined by the World Bank’s studies. BN’s and Singapore’s government framework consists of a defined work structures that each has its own specific role in ensuring all technicality, financial, procurement down to delivery aspects are covered via the establishment of MyHSR, SgHSR, JDP (Joint Development Partner), PDP (Project Delivery Partner), AssetsCo, Opco, and International Opco. One can be assured that our framework is definitely going to be a successful turnkey for the era of transportation modernization if it is to be realized. In fact, HSR KL Singapore should serve its purpose in localizing technology both for Kuala Lumpur and Singapore.
In 2017, when Mahathir spoke his views on HSR, we know that if PH took over this country, we will face a series of mega projects delays, cancellation, abolishment of good policy like GST. Even when all of them are key plans and policies to drive Malaysia's economy. So, Malaysians who voted PH should have expected this, really. If not, it means that most of PH voters have failed to analyse in details of what Pakatan Harapan could offer to the nation, or whether they have the competency and capabilities by looking into Pakatan Harapan's campaigns and their manifesto itself. One should be able to realize that the mathematic of Pakatan Harapan’s manifestos doesn’t added up - to abolish GST that gave more than 40 billion revenue per year, reviewing the entire mega projects which will lead to delays and risked Malaysia on penalties, as well as impacting the PDP that has already been awarded to MRCB Gamuda and YTL, and which in returns, PH government is expected to give free education, funding 1 Million job banks– Surely, that sounds like a forever unsolved formula.
Anthony Loke in his statement recently despite having a disagreement on current HSR's direction seems pretty much contradicting himself really. For the deferment, the downgrading, the review of the entire plan must have been discussed even when PH was still the government of the day. After all, the same Pakatan Harapan minister, Azmin that was leading the first deferment in September 2018 is still a minister in Perikatan Nasional's cabinet before we had our second deferment right after PN was formed. Regardless of how people want to put things in perspective - you see, even with Perikatan Nasional, we literally have quite a number of ex Pakatan Harapan's MPs helming the country, leaders with no vision but merely here for power.
Talking about power, Pakatan Harapan government is nothing but a group of parties (DAP, PKR, PPBM, PAN) that have no choice but to ally for the sake of seizing power. The only vision they have if there is, is to seize power. And that pretty much proven these days, for their fall was mainly due to power struggle within Pakatan Harapan itself. So as much as they managed to seize power but that’s about it, for they don't have a clear direction nor vision as to how to run a country. After all, what kind of progress can Malaysians hope from a government that is clueless on so many aspects to manoeuvre a country, even on taxation as efficient as GST policy, knowing that taxation collection is a core revenue to any government in the world?
So when people voted PH, they are literally voting for all the ideas sold by Pakatan Harapan on GST policy, and that includes the risk of cancellation of mega projects considering that part of their objectives are to review all mega project plans even when those plans are well planned, remained only to be executed and will put Malaysia in the right economic trajectory. So PH's voters naturally should be less surprised by the recent news of HSR compared to their non-voters.
Fast forward to year 2021, Malaysia, even when they are now under Perikatan Nasional, they are still clouded by Pakatan Harapan's decisions of going against Barisan Nasional's previous blueprints. To no surprise really, Perikatan Nasional's "Big Bosses" positions are still held by the likes of Pakatan Harapan. After GE14 and even before the global health crisis began, Malaysia was portrayed by Pakatan Harapan as a poor country with 1 Trillion debt, and at the moment was pretty much synonymous with the idea that more projects of social infrastructure will eventually lead Malaysia to an economic slump. Regardless, we are basically having less future economic prospects when there is no local expansion on infrastructure projects like ECRL and HSR coupled with loss revenue from GST abolishment. Today, Ex -Pakatan Harapan leaders namely Muhyiddin, Mustapa Mohamed and Azmin even when they are already in Perikatan Nasional, again failed to realize that today's expansions, developments are assurances to our future revenue.
Surely, Malaysia is paying a heavy price when they gambled for a “change” today for Malaysia’s parliamentary is still occupied with the likes that allied merely for power and I foresee that our political instability crisis is here to stay – for now.
2. Infrastructure – Unlocking the future revenue
For the past years prior to and even after GE14, our mainstream news has failed to continuously play its social corporate role in delivering factual, constructing ideas of how Malaysia’s infrastructure transformation plan during Barisan Nasional era, via our China, Singapore bilateral agreement on blueprints such as HSR, ECRL are ways of moving forward, and are the key factors for Foreign Direct Investment (FDI) surplus. This somehow led us to a society that is facing a crisis of weighing on what lies ahead in future in comparison to what has been diverted by the mainstream news – looking mainly on the aspects of scandals. Reasons why, people were pretty much clueless how them voting today will determine the future direction of the country, and voting Pakatan Harapan surely led us to a bleak future considering that Malaysia is still settling with ex Pakatan Harapan leaders leading this country even with a new government alliance is formed.
When Malaysia’s minister Mustapa Mohamed giving an excuse of Covid 19 as part of the reason for downgrading the specification, changing route, removal of AssetsCo, it signals that Malaysia is not taking the adherence of the agreement seriously nor that they are preparing themselves for future prospect post Covid 19, considering that HSR line is to serve the future Malaysia and certainly not for the current Malaysia.
Instead of evaluating short term constraints, Muhyidin’s government should look into China’s basis in making their first high speed train line a success – the 1,318km Beijing Shanghai high speed line. China’s HSR lines have been modelled as one of the successful infrastructure transformations and even the World Bank have produced 15 targeted studies on China’s rails as part of technology and knowledge transfer efforts. If one thing that Muhyiddin’s government can take a lesson on China is how China had visioned their first high speed line by looking up to 15 years ahead in future and that is what puts China in their position today as a global leader of high-speed rails. As much as I didn’t fancy on the idea of their current mega HSR expansion covering larger geographic area of more than 20,000 km that includes low population area of China for its questionable revenue, and that could potentially extend the deep in debt crisis BUT China’s first Beijing Shanghai HSR line should be a whole different story. China’s first Beijing Shanghai rail connects two major cities in China and has proven to be profitable with an estimated 220,000 passengers that use the trains each day and definitely a model that should be referred to as a successful model for a smart, high revenue generating infrastructure industry. China has managed to profit by having a fare structure that is made affordable to average income earners but at the same time, introducing special service fare structure that could boost their revenue, hence profits. Not just that, even the World Bank has published numbers of studies on urbanized sustainable development via infrastructure transformation plans by capturing China’s high-speed rail as their targeted study. Today, its industry has expanded their revenue and it was even quoted in the news that China’s Beijing Shanghai is profiting more than the Apple industry.
Likewise, it is a similar concept if we are to compare with Malaysia-Singapore HSR, to connect two economic clusters between Kuala Lumpur and city-state Singapore. By looking at the market target offered for Singapore travellers alone, we are looking at portion of about 10 million travellers to Malaysia annually and try to imagine how wide the market target can be expanded considering that we still haven’t look into the market target by EU, USA, UAE, Saudi Arabia and Asia travellers that travelling to Kuala Lumpur before leaving for Singapore and vice versa. The revenue potential of connecting two dynamic economic clusters of Kuala Lumpur city and Singapore city is without doubt going to be huge if realized just from the infrastructure industry alone.
So, Malaysia going ahead with the original blueprint is one step of unlocking the future revenue, hence putting Malaysia at par with other neighbouring countries, which could be extended to securing more potential FDIs in future.
After all, the key to foreign direct investment is a solid development plan by the government coupled with future economic and society transformation and HSR line is exactly the plan we need especially now, Malaysia had already abolished GST and replaced it with regressing taxation SST.
While our economic policy is in question today, so does our economic order.
3. Infrastructure - a powerful trajectory for social and economic development
It is a proven scenario that when there is a global crisis, citizens and private sectors would pretty much rely mostly on the government to drive the economy, establishing economic policies as well as expanding the works share distribution for them – and this should not stop just at the short-term social economic priorities but also needs to be extended to the future revenue projections. For the existing companies could not survive the years to come if we are to be based solely on the government’s short-term recovery.
One needs to ask in order to gauge the performance of the government after the fall of Barisan Nasional. What are the economic policies that have been made by Pakatan Harapan or Perikatan Nasional today in navigating us towards a sustainable development? I would say most of the plans are mostly short-term planning just for us to survive through the pandemic but that’s about it.
As such, how is it wise for the PN government to stop just at the near-term survival plan as their only agenda while every organization is already looking into restructuring the business order in preparing themselves so they can be in the strategic position once Covid crisis has passed? Especially now, when we are already at the final stage of mass production and distribution of Covid 19 vaccines? Shouldn’t the government of Malaysia consider restructuring the economic order by supporting the infrastructure industry as part of a bigger effort for Covid 19 recovery?
Looking into the broader view of the impacts of Covid 19 - apart from tourism, our manufacturing and construction industries are currently facing the worst decline in history due to the adjusted demands as well as disrupted supply chains from unconsumed manufacturing materials to bulky inventory of construction materials due to project delays or postponed. Ever since the early Covid crisis, Malaysia’s manufacturing industry is at risk as they are facing a series of plunging demands in the aviation sector, automotive sector as well as oil and gas sector. Having to experience this direct impact, the industry is struggling to secure its position for the next years to come just by relying with the current works and within the current market share prospect available. Even worse, global economic reorder has shifted most of the countries to move along with urbanization plans via development of less carbon emission technology infrastructure like HSR lines and even Indonesia has taken a lead on such an effort. Hence, we should foresee that post Covid’s demands may not go back to the Pre Covid rate on production of aircraft industry nor automotive in years to come, for the world is now looking ahead in achieving sustainable technology such as low carbon emission like HSR line as promoted by the World Bank via Sustainable Development Goals (SDG).
When it comes to rating one’s economy, nation's wealth, the world does not measure based on our GDP alone. Instead it was also based on the SDG guideline as established by the World Bank which contains sets of other economic indicators for a nation’s economic prospects, and as how Malaysia is moving forward today, it looks like we are diverting from the objective goals outlined by the World Bank. Going back to the affected manufacturing and construction industries, imagine how many workers that have already been retrenched, companies going through with downsizing activities in both their facility and other resources due to the downtrend in both industries over in Malaysia? Looking at the latest stat, our current amount of unemployment in August 2020 alone is close to 750,000 people and that could potentially increase in a period to come if there is no future plan lies ahead for our current existing industries.
In view of such impacts, a government in pulling the efforts, should have considered to proceed with an effective infrastructures stimulus package such as High-Speed Rail Singapore-Kuala Lumpur instead of pulling handbrakes on our infrastructure development.
In view of the infrastructure benefits, Boston Consulting Group has calculated that infrastructure can help to create at least 10,000 total jobs for every $1 billion invested. So an estimated $17 Billion will be spent on HSR rail in Malaysia, and that could easily create 170,000 jobs. As such, one should doubt how the PN government fails to see the potential recovery from going ahead with the HSR plan as it is? How can the PN government neglect the importance of post Covid 19 recovery, especially now that we are so close to getting the vaccine?
And not just that, reviving HSR project as it is, should be able to serve as a part of the effort to revive the construction industry that already suffered huge losses, cost overrun due to pandemic this year. Just looking into HSR alone – we are seeing potential future development from UEM Sunrise on their 4,550 acres of freehold land in Gerbang Nusajaya (Iskandar Puteri station), to IOI properties on 1,000 acres of land in Ayer Keroh (Ayer Keroh station), Iskandar Waterfront City on Bandar Malaysia (KL terminal) to Sunway Properties on their 1,700 acres Sunway Iskandar (Iskandar Puteri station). HSR alone has proven to revive the construction industry not just from the civil works construction of its rail but also the future property development that is seeing their worst decline ever since Covid 19 crisis started.
The biggest question that one should ask is why Malaysia’s government chose to finalize their proposal with drastic adjustment that will risk shortening its revenue range while having insignificant reduction in cost? Furthermore, our initial HSR’s blueprint initiated and led by Barisan Nasional is similar to China’s first Beijing Shanghai - gaining through connecting two economic clusters.
When World Bank established their studies made on China’s High-Speed Rail’s Beijing Shanghai through TransFORM – a unit convened by both China and the World Bank, they highlighted that the key to a successful transformation plan in China is by allowing only minimal changes once the plan and framework is approved. And Muhyidin’s government knowing that Malaysia has almost zero knowledge had decided to make drastic changes on a plan that was visioned since 2010 by taking out potential spur in trade, increasing infrastructure industry revenue from pushing on a reformed connectivity between to promising city-state Singapore.
All I can see on the HSR line proposed by Muhyidin’s government is nothing but just another plan to fail and is one plan that could potentially drag Malaysia into a deep debt crisis if it is to be continued as proposed.
4. Trust Deficit that will impact Malaysia’s FDI In the Long Run
Our political instability crisis may not be the only concern today for foreign investors. Malaysia, with the recent direction of HSR that involves major changes made on HSR Singapore Kuala Lumpur plan, has put Malaysia as a country with high uncertainties when it comes to their policies and economy reorder, even on how we respect our bilateral agreement.
In early January 2021, Singapore Malaysia had finally announced termination following the disagreement on major changes proposed by Muhyidin’s government. Surprisingly, Mustapa Mohamed leading the economic portfolio seems to act all poised over the whole situation despite that such move will without doubt erode foreign investors’ confidence into venturing trade deals in Malaysia. And as said earlier, Muhyidin’s government having Covid19 as one of the main reasons for the drastic changes show the world that Malaysia today has yet to reframe their future beyond Covid 19 crisis nor Malaysia is able to respect the bilateral agreement on infrastructure project even when the modernizing infrastructure between two economic clusters could easily spur the bilateral trade between two nations in future.
And to be honest, Hyundai moving their Asia Pacific’s HQ to Indonesia following the news of HSR termination is rather expected. After all, Hyundai through Hyundai Rotem Co and Hyundai Engineering and Construction Co Ltd is one of the key bidders for HSR’s AssetsCo. Moving to Indonesia sounds rather strategic for Indonesia who had not only made the plan realized for Jakarta-Bandung’s today but had also announced a further expansion plan on their rail to connect Jakarta to Surabaya in May 2020 as part of Indonesia’s modernization plan of their infrastructure.
Malaysia is without doubt is facing the worst political crisis that has extended to a series of economic crises that could potentially result in much worse functioning from increasing unemployment rate, lower incomes median foreseen, hence having a nation, organization facing financial hardship in long run if not dealt promptly.
Even since GE14, Malaysia’s foreign partners (Singapore with HSR and China with ECRL) have faced hurdles in continuing the previous Barisan Nasional’s projects that was once a ballyhooed infrastructure transformation plan. And after two years of project deferment since September 2018 that was first made 3 months after Malaysians voted for Pakatan Harapan, the project was finally terminated after major changes proposed by Perikatan Nasional led by ex Pakatan Harapan. It is pretty much expected really, for Muhyiddin that was once allied with Pakatan Harapan, would definitely still share the same sentiment and judgement over the mega projects. Malaysians should pretty much expect that voting Pakatan Harapan would lead to cancellation of mega projects considering that they have always visioned HSR KL Singapore as a potential project failure and that is proven today.
5. Malaysia going forward
It is hard to predict the end of the political crisis in Malaysia as it seems that the political struggle in Malaysia is here to stay for long. Malaysia had witnessed its worst political crisis ever since GE14 when the Prime Minister that was once voted over the idea of Malaysia Baru decided to resign in the midst of power struggle among the Pakatan Harapan alliance. Perikatan Nasional was formed after the government collapsed following Tun Mahathir’s resignation but let's face it, even with the new government in place, Malaysia still have the key economic positions filled by ex Pakatan Harapan leaders Muhyiddin, as well as Azmin from PPBM.
Obviously, the profound crisis in Malaysia is happening in three ways. First, Muhyiddin’s government has failed to curb the spread of Covid 19. These days, Malaysia’s daily cases can go from 1000 to 3000 cases, surpassing the total cases in China and this has led to the growing impatience of majority Malaysians towards how the situation is handled. Second, while the rest of the economy in other regions has prepared themselves for post Covid 19, Malaysia with no direction for domestic growth, no direction of urbanization plan, nor infrastructure industry plan is expected to have a prolong down trend of major industries that currently depending on government’s projects to revive their business. Third, Malaysia government, despite the fact that the main reason for the current political stability was initiated by the power struggle among Pakatan Harapan, may face the same political crisis even after the next 15th General Election. The past political turmoil event in Malaysia has shown that anything is possible in Malaysia's political structure. As obvious as it is, with each party, each alliance is facing an internal crisis, Malaysia will still be facing uncertainty even if we are to have an election any time soon.
Malaysia, since the fall of Barisan Nasional, has yet to see any strong potential alliance that could form a strong majority number. Malaysia’s political landscape through past events shows that we will continue facing risks of changes in the government until our politicians, our statesmen look into the nation agenda instead of their personal vendetta agenda. After all, politicians are indirectly shaping a nation’s characters - make it through their populist rhetoric speeches or playing on people’s sentiments or genuinely look into the prospect of a nation's growth.
Additionally, with the voter’s voting design has shifted to racial based such as that it is very unlikely for the majority of Chinese nor Indian to vote MCA and MIC despites how previous MCA MIC ministers have performed. This is mainly due to their growing sentiment concern over “racial policies”. Despite that there is no racial policy for business grants, HRDF benefits, MIDA-MITI grants are easily attained by factories, organization, for construction projects awarded, BR1M, as well as public school education is free for all regardless races, and our health policy is still maintained at RM1 per person regardless races, still the hate sentiment on Malays for their special privilege are apparent. Surely, this is another crisis to be looked at for Malaysia - a society racial crisis.
The majority of Non Malays are sceptical over MIC and MCA as they believe MCA and MIC are not fighting enough for them considering they are allying with UMNO, a party that represents Malays. For now, it seems apparent that performance is not measured by delivering as per their ministers portfolio but based on how determined MIC and MCA to bring the end to Malays Bumiputera privilege. As bitter as it sounds, that is the real society issue we have these days and will eventually affect the voting result. With the growing usage of social media where people blasted their views, comments, and less Act to control hate speech, we should expect the racial divides will grow larger today and in future.
Last GE14 has shown that Malays votes have split into three ways – UMNO-Barisan Nasional, PH and PAS. With each Malays politicians still having disputes with one another, we could expect that Malaysia will still face the same split for Malays votes except that it would probably be UMNO-BN, Pakatan Harapan and Perikatan Nasional (PAS – PPBM) looking at how the internal crisis between Perikatan Nasional has grown for the past months.
The past decade-long propaganda movement on Malays Bumiputera and their privilege led by DAP and Pakatan Harapan has resulted in today's shift on how unity is defined. Unity since the era of Malaysia Baru is achieved only if Malays could stop being Malays and put aside their race and be “Bangsa Malaysia”despite it sounds heinous enough for anyone to eradicate one heritage by taking out their race status. Hence, It is probably hard to see Barisan Nasional ruling with a majority yet again even when for the past decades Barisan Nasional was ruling, Malaysia had never faced a political instability crisis as how we are seeing today after GE14.
Hence, if the nation is still looking into the propaganda prior to voting without weighing on the real economic indicators as measurement of the party performance, Malaysia may be stuck in a low-growth trajectory in the long run. While the other nations around this region are progressing on social infrastructure as part of the effort for post Covid 19 recovery, will Malaysia’s social infrastructure’s growth remain idle hence will lead to a slow growth of both construction industry, and other industries related, as well as FDI’s attraction? To be honest, Malaysia’s election result in future could only favor Malaysians once they chose to vote for their own future assurance, vote for better policies, vote for economic reform instead of voting based on politicians’ populist rhetoric and sentiments.
Until then, it will continuously be a loss to Malaysia, and a gain to our competitors.
It will come to a point that Malaysia might no longer be the economic player in this region but merely a reserve player in the South Asia region, if Malaysia’s political crisis is not dealt promptly.
Pray hard that Malaysia can find a formula that can pull them out from the worst crisis in their past decades of establishment for it seems that they will be years too late to be saved. As for me, I still hold hope for the future, given the chains of history and our flaws as a people, in time we will overcome these crises. All it takes is for us to embrace one another, make it as a nation or as politicians. If Malaysians once can accept the idea of unity while still holding to their race, their heritage, respecting others' privilege as how they have inherited from their ancestors, why can’t we do now for the sake of this nation’s future.
Nur Zaini is a mother of three, an engineer, an active writer in social media in giving her thoughts and views over the current issues.She is specializing in business relations, project management as well as on accreditation of AS9100. Nur Zaini graduated from UiTM Shah Alam, with a Bachelor Degree in Mechanical Engineering, and Master (Sc) in Quantitative Science. She now lives and works in Shah Alam, Selangor.
Join our Telegram Channel
