Election Fever

It seems ironic now that I wrote about “Election Fever” a year ago! This is because the government seems to have had cold feet for all this time, not willing to call for an election it probably expects to do badly in. In any case, this was first published in theSun on the 23rd of March 2012.

Election Fever

Talk of the 13th General Election is underway, and not without reason. Political pundits have given their respective reasons: this is possibly the only window of opportunity Prime Minister Najib has, with a relative lack of controversy (note: relative), and one ought to act quickly before something new surfaces.

The National Feedlot Corporation issue is somewhat resolved with the “sacrifice” made by government in not renewing Minister of Women, Family and Community Development Shahrizat Jalil’s position; the new civil service remuneration scheme that courted resistance by the civil servants has now been withdrawn; the RM500 cash aid for household income of below RM3000 is being distributed.

What are the conditions going into an elections this year? On the official front, things seem to look rosy. The World Economic Forum’s Global Competitiveness Report 2012 ranked Malaysia at 21st position, gaining five ranks and registering improvements across the board. The report praised Malaysia’s improvements in its efficient and sound financial sector, and its highly efficient goods market, although stating the need for improving on our budget deficit, educational and technological performance.

The World Bank’s Doing Business 2012 Index also saw Malaysia rise from 23rd to 18th position, the most significant positive change coming from the ease of starting a business and the enforcement of contracts. Foreign direct investment increased by 12.3 percent in 2011 (RM32.9 billion) from 2010, and the GDP grew by 5.1 percent in 2011.

Although this seems to reflect a healthy economic picture of Malaysia, these figures must be given a reality check. Although investment grew year-on-year, this is only relative to that achieved in 2010, where Malaysia along with the rest of the world was still recovering from the global economic slowdown of 2009. Recall also that pre-2009 investment figures were still higher, with RM33.4 billion achieved in 2007 and RM46.1 billion in 2008.

Secondly, the 2011 growth rate is still lower than the target of 6 percent annual growth rate by the government’s Economic Transformation Programme (ETP), all the way till 2020. And finally, the Central Bank has just revised our growth forecast downwards, to between four and five percent in 2012.

More important indicators perhaps for political parties to be cognisant of are those that are reflective of the issues that people on the ground truly care about: the ringgit and sen concerns. The subsidy cuts initially planned for by government have had to be halted because of inflation rates that are at a 27-month high of 3.5 percent (June 2011). Rising commodity prices have increased the cost of living significantly. And with 40 percent of Malaysian households earning less than RM1,500 a month, these are the real figures that paint the picture of the country’s economy.

Funding the Elections

On a different but related note, going into an elections will mean a great amount of money being passed around. It is impossible to go into greater detail, simply because hardly anyone would have clear, transparent, published and accountable records of the funds being used to finance an election. And the stakes are certainly much higher in the upcoming elections, with talk of wresting back state governments previously lost to the Pakatan Rakyat coalition.

Interestingly enough, both Najib Razak and PEMANDU CEO Idris Jala have recently waxed lyrical about the need to reform political financing. More specifically, they said that all funding would have to be channelled to an official party account and that all federal and state government bodies would not be allowed to include any party member who is an office bearer on their tender board.

It is good news indeed that some national leaders are talking about it, but how seriously can Malaysians take them, in all honesty, especially given the sort of financial scandals emerging from within the ranks of government political parties?

But it is certainly true that unless political financing is reformed in the country, there will be very little change to all talk of transformation. This is where clear rules and regulations must be set in place to regulate the relationship between the business sector and political parties. Failure to do so would mean the continued dependence of parties upon businesses’ financing means, thereby creating and maintaining the web of cronyism we are all too familiar with.

Whilst parties still need funds to run, new laws and policies should be introduced to govern political parties, accompanied by stringent enforcement and monitoring. For example, Transparency International recommends a laundry list of possibilities including parties’ public disclosure of sources of financing and expenditure. There should also be limits on the amount of money an individual can donate. Another option which may be debated is allowing state financing of parties, as practised by countries like Germany. There, public funds are distributed according to the percentage of votes won by certain political parties.

Of course, realistically, these mechanisms will not realistically be implemented anytime before the upcoming election. Having said that, the conditions going into the election are mixed: a macroeconomic outlook that is not all gleaming, and with telltale signs of a lower and middle class unhappy with the increase in costs of living.

Another potential landmine the government has to watch out for is the Lynas Corporation rare earth plant in Kuantan, not to mention numerous issues in Sabah and Sarawak (on immigration, land), the hotbed of politics that both parties will be targeting. It will be an exciting next few months, so either sit back and enjoy the show – or think about how to participate in the process of ensuring a free and fair electoral process.

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