Malaysian Politics: What Just Happened and the Political Outlook

Posted on October 24, 2021 by Tricia

This article was first published by the Heinrich-Boell Stiftung Southeast Asia on its website here, on 20 October 2021.

It is never a dull day in Malaysian politics, but there seems to be a brief pause – for the time being. The last two years saw a series of continuous and rapid political developments, starting with the change in federal government in early 2020, alongside shifts in many state governments, and ending most recently with yet another government change in August 2021. Malaysia has therefore seen three federal governments over a period of two years, with tremendous upheaval in between. This piece unpacks the political developments over the last two years in its various phases, and ends with examining the country’s future political outlook.

The rise of the Perikatan Nasional government

The Pakatan Harapan (PH) government, only having come to power a short 20 months earlier in May 2018, fell when its Prime Minister Mahathir Mohamad resigned from his position. A series of developments in that critical week at the end of February 2020 led eventually to the installation of the country’s 8th Prime Minister, Muhyiddin Yassin, in March 2020.

Muhyiddin’s government, the at the time newly-formed coalition Perikatan Nasional (PN), comprised the parties that previously helmed federal government since the country’s independence: the United Malays’ National Organisation (UMNO), the Malaysian Chinese Alliance (MCA), and the Malaysian Indians’ Congress (MIC), all three of which were already component parties of the Barisan Nasional (BN).

The key difference was that the PN coalition would now also consist of parties that were previously in opposition to the BN: the Pan-Malaysian Islamic Party (PAS), well-known for its longstanding hold on the Malay-Muslim East Coast state Kelantan, as well as Muhyiddin’s own Parti Pribumi Bersatu Malaysia (PPBM).

Mahathir, alongside Muhyiddin and other leaders, had in 2017 left UMNO to form PPBM at the height of the infamous international 1MDB scandal. Then allies, Muhyiddin’s move to join forces with UMNO and PAS in 2020 saw the two leaders parting ways. Central to Mahathir’s decision not to align himself with UMNO in particular was that he was deeply opposed to a partnership with those who had pending court cases related to 1MDB. Mahathir, after all, had launched a highly public campaign against former Prime Minister Najib Abdul Razak in the previous 2018 national election, criticizing the case of grand corruption, unprecedented only in scale, but not practice – which, arguably, alongside other factors such as his teaming up with the PH coalition – led to the downfall of BN for the first time in the country’s history.

That BN was back in power, but under a different coalition name, struck a raw nerve for many who decried it as a “backdoor government”, having been voted out in the 14th General Election. Nevertheless, Malaysia’s system of parliamentary democracy premised on a constitutional monarchy means ultimately that the King has the legitimate right to appoint as Prime Minister the parliamentarian who, in his judgment, commands the majority of the Lower House. Obtaining statutory declarations and meeting parliamentarians individually was his chosen method that informed this decision. This was not unprecedented, the practice of which was accepted in the case of the Perak constitutional crisis of 2009, in which the then Pakatan Rakyat state government was toppled by the Barisan Nasional, on the basis of three state assemblypersons defecting by way of statutory declarations.

The precarious state of Muhyiddin Yassin’s government

Then Prime Minister Muhyiddin Yassin took over federal government at a most crucial time, precisely when the second wave of the COVID-19 pandemic was escalating rapidly. A regional evangelical Muslim tabligh had just been held, the source of a major cluster of infections in March 2020. His administration had to launch immediately into the business of managing the pandemic, issuing the first nationwide lockdown (the first Movement Control Order, or MCO, beginning in March 2020).

Each of the following pandemic waves in the country was successively worse, with exponentially increasing daily cases. The Sabah state election that took place in September 2020 led to a rapid wave of infections, peaking at 2,525 new daily cases by the end of the year. The perception that this came about as a result of politicians “bringing the virus back” from East to West Malaysia, coupled with an almost year-long series of poor public policy coordination resulting in confusion (instructions from the police often conflicted with that from ministers and standard operating procedures from ministries had to be revised multiple times), meant that there was already growing frustration with the Muhyiddin administration.

Muhyiddin’s government was already dangerously unstable. After all, when he took over, he had a razor-thin majority, which even then continued to be questioned throughout his leadership. In October, Muhyiddin requested but was denied a national Emergency; his reason was that the government needed to respond to the national COVID-19 crisis, although it was widely speculated that this was done on political grounds given his precarious position. Muhyiddin’s legitimacy had not yet been determined in Parliament, and calling for a general election in the middle of a pandemic was impractical. Of course, the Opposition could have, but failed, to use the tabling of the 2021 Budget in November 2020 as a way to unseat the PN coalition. Thus, 2020 ended with Muhyiddin’s government still intact, but barely.

Grasping for straws and the rapid decline

In January 2021, again Muhyiddin requested that an Emergency Proclamation be announced, which this time the King agreed to, and Parliament was suspended on account of the Emergency. This Emergency would last from 12 January till 1 August. A slate of Emergency Ordinances were issued, which gave the Prime Minister the unilateral ability to spend without seeking parliamentary approval, enabled the government to withdraw RM5 billion from a National Trust Fund for the first time on COVID-19 related spending (representing almost a third of the fund’s total deposits), and restrict freedom of speech under a specific “fake news” Ordinance. In reaction, civil society organisations protested against what was considered infringements of fundamental liberties.

Throughout this period, the relationship between PPBM and UMNO was already weakening, and by March, the latter announced it would not co-operate with PPBM in the next general election. One of its most vocal spokespersons was Azalina Othman, the Deputy Speaker, also decried parliamentary suspension publicly, which won over some public sentiment. The previously semi-authoritarian dominant party of UMNO, despite being back in government,  was no longer in the driver’s seat and in fact issued public statements against PPBM’s increasingly poor handling of the worsening COVID-19 crisis. The intra-coalition cracks were beginning to widen into rifts, and very visibly so.

As Malaysia entered its third nationwide lockdown in June, while pandemic cases escalated at an alarming rate, the nation saw the King – who by convention plays a ceremonial role and by constitution acts upon the advice of the Prime Minister – intervening into what descended into a constitutional crisis. On 9 June, the King met with leaders of the political parties, and on 16 June, he issued a statement calling for Parliament to reconvene as soon as possible to allow debate of the Emergency Ordinances and a COVID-19 recovery plan. Although Muhyiddin appointed UMNO parliamentarian as his deputy in early July, UMNO still withdrew support for the coalition and called for Muhyiddin’s resignation over pandemic mismanagement.

What followed was a very unusual and unprecedented public spat between the Palace and the federal government regarding the Emergency. On 26 July, the day of the special parliamentary session, the PN law minister announced that there was no need to debate the Ordinances, as they had already been revoked, which was then publicly rebuked by the Palace three days later, saying that the revocation was done without the King’s consent and is not in line with the country’s constitution and laws. Muhyiddin eventually agreed to consider debating the emergency laws in Parliament.

However, after maintaining that he held the majority of Parliament throughout his embattled tenure, Muhyiddin finally conceded on 13 August that he did not have a majority. Stunningly, he offered an attractive reform package to the Opposition in exchange for support in a confidence vote, and committed to elections taking place by July 2022.

Amongst the reforms promised were a two-term limit of Prime Ministership, lowering the voting age to 18, equal constituency funding for all members of parliament, an anti-hopping law, more parliamentary special select committees to involve all MPs with 50% opposition chairpersonship, pre-tabling consultation of bills and budgets with all MPs, and remuneration and facilities for the Parliamentary opposition leader on the rank of a senior minister (Wong, 2021). Enticing as it was, the deal was felt to be ‘too little, too late’ and was rejected unanimously by all PH parties. Muhyiddin stepped down as Prime Minister, and Ismail Sabri was installed as the country’s 9th Prime Minister on 21 August 2021.

The final (for now) shift of power – and new ‘understandings’

The most significant development of Ismail Sabri’s new premiership thus far has been his success at securing Malaysia’s first-ever confidence and supply agreement between the federal government and the Opposition, officially known as a ‘Memorandum of Understanding on Transformation and Political Stability’ (MoU). What is crucial to note throughout this series of political events is that no single party commands a strong majority of Parliament, which is what likely led to Ismail pushing for the MoU to be signed even after having ascended into power. Despite some glaring gaps (for instance, there are no commitments to a political financing law to address political corruption), there are many positive elements that address both COVID-19 management and institutional reform.

The MoU committed to, for example, the National Recovery Council including public and private sector experts as well as Opposition members, cash aid of RM10 billion, for the Opposition to contribute meaningfully to the 2022 Budget, limiting the Prime Minister’s term to 10 years. On institutional reforms, the MoU committed to hastening the implementation of lowering the voting age to 18, automatic voter registration, an anti-hopping law and having balanced representation between government and opposition MPs in Parliamentary Select Committees.

There has been some skepticism over whether or not the government would be serious in implementing these commitments, while others believe it is a step in the right direction. Most recently, the new memberships of Parliamentary Select Committees has been announced, which saw the inclusion of 50% of opposition MPs in each one. The Opposition leader has also been granted ministerial-level status and the necessary corresponding amenities.

Yet, after all the developments that led to the most recent change in government, the Cabinet composition of Muhyiddin’s and Ismail’s governments are not very different. Critics have observed that the move reeked more of a Cabinet reshuffle. For example, a few short weeks after the government change, Muhyiddin was appointed as National Recovery Council chairman, the position considered a minister-level appointment. In short, while UMNO holds the position of Prime Minister, the government is still very much influenced by PPBM.

The future of Malaysian politics

What accounts for the unusual composition of, and hence influence within, the current federal government is simply, as alluded to above, the doing away of dominant party politics in Malaysia. The term that best characterizes Malaysian politics over the last two years is ‘fragmentation’. A stalwart party as old and institutionalized as UMNO has suffered the consequences of deep factionalism, while many of its key leaders continue to be weighed down by their associations with 1MDB. UMNO Cabinet members, for example, do not hold key positions within the party itself.

The PN experiment seemed to be ideal partnership when it was formed. Indeed, in September 2020, a public poll by Merdeka Center for Opinion Research placed the coalition as the most popular of the available options. Painting itself as the grand Malay-Muslim coalition that stood for the rights of the majority Malay community in the country, it was meant to attract the support of constituents. Ultimately, however, electoral politics in Malaysia requires competition – and the three parties PPBM, UMNO and PAS would be contesting against each other in similar seats, hence the eventual breakdown between PPBM and UMNO. This leaves Malaysia, then, with the options of the BN consociational model and the multiracial PH model, the latter of which did not have the time it needed to test its potential success over at least one term.

What makes of the Opposition throughout this tumultuous period? There were instances in which Opposition Leader Anwar Ibrahim claimed to have the majority of parliamentary support – in September 2020, January 2021 and again in August 2021 – but at each turn he was not ultimately able to swing things in his favour. Sitting at the table to contribute to national plans is probably the best outcome for the Opposition at this time. For example, members of the PH coalition have been invited to provide their input at consultation meetings on Budget 2022, which will be tabled in Parliament at the end of October. There was also no public criticism of the recently announced 12th Malaysia Plan by the Opposition, which may be a sign of this new political realignment.

Of course, time will tell whether this partnership will remain. There will be increasing pressure on both the government and opposition to follow-up on concrete commitments in the MoU, including the tabling of an Anti-Hopping Bill, lowering the voting age to 18 and the 10-year Prime Ministerial limit by the first parliamentary sitting of 2022. And there is a clear deadline, since there is assurance that Parliament will not dissolve before 31 July 2022 – but what then, after this date? The decision to hold elections will also be determined by COVID-19: will there be yet another wave, with waning vaccination efficacy?

The 15th General Election must be held by May 2023. It can be called anytime sooner, but this is highly unlikely to happen, since there are tremendous incumbency advantages held by the sitting government. In the meantime, all political parties will be using this relatively peaceful period to oil their ground machinery, which is so imperative in the grassroots and community service typology of Malaysian politics. UMNO especially will make use of long-established and deeply-rooted networks to its benefit. Over the next two years, funds – it is impossible to determine what is legitimate since the country does not have a Political Financing Act – will be raised, circulated and distributed.

One thing is certain. The single-party dominant nature of Malaysian politics has changed for good. Unless rapid consolidation can take place, which is highly unlikely, no one party will have the ability to dominate, and parties will have to compete to be part of strong(er) coalitions. And one positive outcome is that such negotiations are now premised on better-quality policies, a step in the right direction of policy-driven politics. At such an acute time of economic and political uncertainty, this is surely something to be hopeful about.

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Tricia Yeoh is CEO of IDEAS (Institute for Democracy and Economic Affairs), an independent public policy think tank in Malaysia. She is also a PhD candidate at the School of Politics, History and International Relations at the University of Nottingham Malaysia Campus. She writes on national socio-economic policy and has delivered various presentations at national and international platforms.

The views expressed by the author are not necessarily those of Heinrich Böll Stiftung.

Posted in Elections, Ethno-Religious Politics, General Politics, Reflections | Leave a comment

CPTPP as Malaysia’s opportunity for post-Covid growth

Posted on October 10, 2021 by Tricia

This article was published on The Malaysian Insight on 7 October 2021, here.

IN a webinar held by the Institute for Democracy and Economic Affairs (IDEAS) recently concerning a progress update on the Regional Comprehensive Economic Partnership (RCEP) and the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), the lead negotiator from the Ministry of International Trade and Industry (Miti) shared that their target for tabling the CPTPP to the cabinet is end-2021. The CPTPP could be a major catalyst to rejuvenating global trade and economies following the Covid-19 pandemic. Unlike other free trade agreements (FTAs) that solely focus on tariffs, the CPTPP extends its coverage to non-tariff measures, movement between member countries and many other provisions that further ease trade between members.

In such global conditions where many countries are hesitant to open their borders due to discrepancies of Covid-19 SOP, the CPTPP with its blanket coverage of quality standards could be a mitigating measure. With its current 11 members equivalent to 13.5% of total global trade, the CPTPP also further integrates the markets of its members with reduced trade barriers.

Market integration is key, because integrated markets ease production for the global value chains (GVC) that are vital to the manufacturing sectors of  each member’s economy – a golden opportunity for recovery. IDEAS calculates that ratifying the CPTPP would boost our GDP by over RM14 billion (a 1% increase) and create 140,000 new jobs. Post-pandemic, this is a much-needed low-hanging fruit that Malaysia can immediately benefit from.

New market opportunities await 

In fact, as more countries join the CPTPP, the amount of markets, trade networks and supply chains will increase. What started out as a more exclusive club among select countries is rapidly becoming more inclusive as more have applied for accession. With the United Kingdom, China, South Korea and Taiwan formally applying for accession, the potential gains increase even further.

While Malaysia has welcomed China’s bid to join the CPTPP, stating that it is confident that bilateral trade and investment ties between the two would grow, only member countries are able to make decisions over new applicants. Not having ratified means Malaysia’s opinion does not carry much weight. Yet, member countries such as Australia have signalled that China must convince its members of its track record of complying with existing trade agreements, and hence fully implement its commitments under the CPTPP’s high standards.

As well, the benefits to Malaysia for Taiwan joining the fray are also very apparent given the existing GVC integration between both economies. Malaysia and Taiwan already share a strong trade and investment relationship – Taiwan is Malaysia’s fifth-largest trading partner –  and deep underlying industrial collaboration. Taiwan’s participation in the CPTPP would further liberalise trade in electronics, machinery and chemicals, in turn encouraging Malaysia’s efforts to upgrade and innovate in its Fourth Industrial Revolution (4IR) adoption. IDEAS’ research also found that Taiwan’s membership of the CPTPP would further increase Malaysia’s GDP by over RM2 billion and create 20,000 additional jobs. Taiwan has revised several domestic laws and regulations to meet the agreement’s high standards over the past five years, which would make accession smoother.

How SMEs can derive benefits from the agreement

For Malaysia, examining how the CPTPP would create value for manufacturing SMEs is crucial since manufacturing contributes to almost 20% of SME activity, registering a share of 34.6% of SME GDP, and representing 16.3% of SME total employment (Department of Statistics, 2019).

The CPTPP with its trade diversification measures has the potential to reach new markets, thereby extending export opportunities for local SMEs. With the standardised trade measures put in place, SMEs will be able to export at a higher rate without complications of certification or quality control. Given Malaysia’s existing strengths in manufacturing and electronics, this may bring about added potential. In addition, Malaysian SMEs would be enabled to source cost-effective raw materials, parts and components. 

A 2021 Center for Strategic and International Studies report shows that firms in existing CPTPP member countries have already experienced gains. After two years of the agreement being in force, 45% of medium and larger firms report that the CPTPP has helped them gain new customers, 39% have scored new sales and 36% have diversified into new markets. Even micro and small exporters have experienced similar gains, with 31% able to diversify markets and 29% reaching foreign customers. More impressively, small online sellers on e-commerce platforms such as Shopee and Lazada also reported gains in diversifying markets (51%) and reaching foreign customers (36%).

Finally, there is a dedicated SME chapter in the CPTPP, which is designed to support the growth and development of micro and other SMEs. For example, the Cooperation and Capacity Building chapter addresses SMEs’ specific needs, which would allow participating members to learn from each other. Other economies like Australia, New Zealand and even new applicants such as Taiwan and the UK that have transitioned rapidly into high-value economies, can provide valuable lessons for Malaysia. Taiwan’s SMEs at the same time have an inclination for overseas investment, which will benefit Malaysia’s overall FDI condition and improve the competitiveness of Malaysia’s SMEs.

Taken collectively, these reforms would strengthen our production capabilities as we work towards a more healthy and competitive environment. CPTPP or not, SMEs will require these reforms to prepare our domestic economy for the challenges that lie ahead. The ratification presents us a valuable opportunity to make these reforms happen now.

Potential pitfalls to avoid and mitigate for

That said, Malaysia must prepare for potential pitfalls as well. For instance, ratification might mean that although both imports and exports will be boosted, Malaysia is expected to experience a trade imbalance, resulting in more imports than exports, to the amount of US$2.4 billion per annum (Banga, 2019). Ultimately, if there are benefits to both consumers who can access a wider selection of goods, as well as to local exporters who can access more markets for export, this should not be considered a devastating loss.

Second, there may be some concern over the liberalisation of technology digitalisation and e-commerce, where for instance some provisions call on non-discriminatory treatment for digital products and a ban on data localisation. However, upon deeper analysis the CPTPP actually includes robust digital regulations, provides for deep market access and can help shape firms already using data in their operations. Firms operating within existing CPTPP member countries in fact report that the e-commerce provisions are “very or somewhat beneficial” for their businesses (Center for Strategic and International Studies, 2021).

Malaysia has in the past already successfully achieved significant carve-outs for matters of national interest, including Bumiputera procurement and on SOEs. On the balance of things, while there may be winners and losers as a result of ratification, what is more important is for Malaysian economic policymakers to plan well, and to place the agreement within a more broad-based and long-term economic policy for the nation.

This would send a strong signal to the international community that Malaysia is ready to be a competitive player in the region and the world, comply by international standards, and more importantly, prepared to provide a robust institutional framework and system to accommodate these intentions. As Malaysia plans for the structural economic changes ahead, it is clear we cannot isolate our economy from global reach. As long as transparency, good governance and strong communication is provided for by the government with industry players, Malaysia can once again be an open economy – and invest and reap the benefits of multilateralism with other member countries, as well as be open to welcoming new economies on board, especially those we already have strong economic ties with. – October 6, 2021.

* Tricia Yeoh is CEO of IDEAS.

Posted in Economics, Transparency and Good Governance | Leave a comment

PM Muhyiddin Yassin’s resignation signals UMNO’s back in driver’s seat

Posted on August 28, 2021 by Tricia

This was first published on Channel NewsAsia on 16 August 2021, here.

KUALA LUMPUR: Malaysian Prime Minister Muhyiddin Yassin submitted his resignation letter to the King on Aug 16 (Monday) which the latter accepted, but the political impasse has still not yet been resolved.

Though Muhyiddin has been appointed caretaker prime minister until a new prime minister is identified, the political crisis has only deepened.

And yet Muhyiddin felt he had no choice. His hand was forced when it became clear in the last few weeks that his already razor-thin majority was coming into sharper focus.

His government has come under fire for the country’s COVID-19 situation, which has seen infection numbers skyrocket to more than 20,000 cases and a few hundred deaths each day.

Last Friday (Aug 13), he offered a slew of political reforms to the opposition that curb the powers of the ruling coalition and office of the prime minister while strengthening diversity of representation in Parliament, in exchange for support for a confidence motion.

This last-minute gesture was rejected wholesale by Pakatan Harapan, alongside other opposition parties.

While the opposition would have opposed the deal regardless of what it contained, they knew they had the upper hand. These proposed reforms – including limiting the prime minister position to two terms – could only have been offered by a weak government.

Yet now, these reform promises are likely to be out the window. It’s a huge pity.

Now that the cards have been dealt, the next few weeks will be fraught with even more uncertainty.

UMNO’S RETURN TO POWER?

To start, there doesn’t seem to be consensus over who the prime minister will be.

At the time of writing, no one Member of Parliament clearly commands the majority of the Lower House of Parliament.

With political leaders distracted with ensuring their survival and earning a plum position in the new government, public policy could be left largely in the hands of the civil service.

There are also questions surrounding the leadership of the national immunisation programme and the national recovery plan, both crucial parts of the country’s COVID-19 management.

Malaysia is at a pivotal point in its COVID-19 battle and is clocking some of the highest cases the country has seen. It will be unfortunate if the turn of events results in a setback in the pace of Malaysia’s vaccination efforts.

Second, UMNO is set to return to power since it is the largest party in the ruling coalition, with 36 of the 222 parliamentary seats, compared to Bersatu, which has 31 according to the Malaysian Parliament’s official website. It holds most of the cards if it can maintain party unity.

The situation primarily benefits UMNO as it will likely be given key ministerial positions in any deal it makes with other parties to form a ruling coalition. UMNO’s grassroots networks will be strengthened with the eventual distribution of government funds through these prime positions.

However, UMNO is split several ways, meaning it is unclear which faction will have its say over the prime ministerial candidate.

Even if they coalesce around a single candidate, this may only represent a weak minority of support within the party and may not guarantee certainty. Let’s not forget Members of Parliament can defect to another party – leaving any government formed fragile, even shaky.

For now the frontrunners are Ismail Sabri and former deputy prime minister Tengku Razaleigh Hamzah.

UMNO president Zahid Hamidi seems to be in support of the latter, while former prime minister Najib Razak’s name has not surfaced as a potential candidate, possibly due to his ongoing 1MDB-related court cases.

For Malaysians, the return of UMNO is a signal that the country has regressed from its path of democratic consolidation. The very party voted out in the 14th General Election (GE) in 2018, rejected by voters, has not only returned to hold all the keys to forming just the government, but the choice of prime minister.

In Malaysia, the prime minister wields the most power and control over the government’s administration, with access to an extremely wide network of public resources.

If that scenario plays out, UMNO is in a stronger position to consolidate between now and the 15th GE. This includes the ability to entice MPs back from Bersatu, or even force a situation in which Bersatu would have to dissolve as a party altogether.

Being the party in government with the largest number of MPs would also restore its position of “big brother” within the coalition, determining who contests in which seat for the 15th GE, as well as eventually overshadow the other parties.

For all its years in BN, UMNO operated as the dominant party, while coalition parties like Malaysian Chinese Association and Malaysia Indian Congress were only ever given rudimentary decision-making powers, if at all.

If that happens, Malaysians could revert to a culture of political party patronage and corruption that has plagued the political system for far too long.

UMNO has been used to operating as the party synonymous with government, and hence has been able to make use of state institutions to gain political advantage without being too concerned over any conflict of interest.

UMNO as a dominant party until May 2018 has also never seriously embarked on any reforms despite the progressive wing of the party pushing for a rethinking. This is likely to be its position when it returns to power.

REFORMS MUST COME WITH CHANGE IN GOVERNMENT

 A last scenario is the formation of a unity government held together by a Confidence and Supply Agreement (CSA) – which bundles together bills and a motion of confidence that MPs vote on, in exchange for allocations of funds for use in their constituencies.

It was a huge pity when such a CSA was already part of the deal Muhyiddin had offered. The package would have essentially given the opposition a seat at the table through opportunities to co-lead pandemic and economic management and positions within Parliamentary Select Committees.

Other reforms that Muhyiddin had promised included equal constituency development funding to all political parties alike, the lowering of the voting age to 18 years, and laws to prevent MPs from defecting to another party – deals the opposition had previously pressed for.

Had Muhyiddin been given the chance to push these through in Parliament and carried them out as promised by July 2022, these would have strengthened the opposition’s position ahead of the 15th GE. There is no guarantee a new CSA to support a unity government can match the reforms Muhyiddin had put on the table.

Three weeks remain until the next parliamentary sitting is due to take place on Sep 7. Until then, all political parties including those within Perikatan Nasional and Pakatan Harapan will likely be negotiating an advantageous solution that works for them, at least until elections can be safely held.

Tricia Yeoh is CEO of the Institute for Democracy and Economic Affairs.

Posted in Elections, General Politics, Public Administration | Leave a comment

This political impasse in Malaysia is a calm before the storm

Posted on August 8, 2021 by Tricia

This article first appeared on Channel News Asia here, on 6 August 2021.

Should a motion of confidence in PM Muhyiddin Yassin succeed, the Opposition might still attempt a defeat of 2022 Budget, says Tricia Yeoh

Events over the last week have deepened Malaysia’s political crisis.

Prime Minister Muhyiddin Yassin’s already questionable majority was publicly challenged when an UMNO minister resigned and the party announced the withdrawal of 11 of its Members of Parliament.

This followed a special Parliamentary sitting, in which it was revealed the Cabinet wanted – but failed – to revoke the Emergency Ordinances, resulting in tense public exchanges between the prime minister and the king about whether royal consent was required, unprecedented in a constitutional monarchy like Malaysia.

Despite UMNO’s withdrawal from the Perikatan Nasional coalition, Muhyiddin’s government is still in place for several reasons.

First, Malaysia’s federal constitution does not recognise political parties, and stipulates that only the king shall appoint as prime minister a Member of the House of Representatives (lower house of Parliament) whom he believes commands the confidence of the majority in the Lower House.

Second, there are only three ways in which any one parliamentarian’s majority can be tested: Through a general election, a vote of confidence (or no confidence) in Parliament, or through evidence submitted directly to the king, for example statutory declarations affirmed by members of the Lower House, as was the case that paved the way for Muhyiddin’s assumption of the top office in February 2020.

THE OPPOSITION MUST DECIDE ON A LEADER FOR PM

The record surge of COVID-19 infections in Malaysia has given Muhyiddin an out. For public health reasons, he can fend off calls for a parliamentary motion of confidence earlier than his announced September session.

That at least 11 COVID-19 cases were reported in Parliament last week bolsters the public impression that lawmakers meeting when a pandemic is raging can be risky, despite the fact that all parliamentarians already have been vaccinated and hence parliamentary sessions can actually be held safely with the appropriate restrictions in place.

But this doesn’t render the Opposition – which now claims to hold the majority – inert. In fact, opposition MPs have three options at its disposal.

First, they can lobby the Agong, for he can advise the government for another special parliamentary sitting to be held sooner rather than later in September.

Second, if Parliament is not brought forward, the Opposition has one month to strategise and plan for the September sitting.

Doing well entails for the motion of confidence to be submitted to the Speaker Azhar Azizan and any necessary procedure according to parliamentary standing orders to be strictly adhered to so that the Speaker has no procedural grounds for rejection.

Apart from a motion of no confidence in PM Muhyiddin, like the one Opposition leader Anwar Ibrahim submitted in late July thrown out on the grounds it was “too early”, the Opposition must also ensure it also submits motion(s) of confidence in a Member of Parliament it is prepared to support as prime minister, whether Anwar Ibrahim or otherwise.

In such a scenario, it is possible that parliamentarians from UMNO will support Anwar. However, the Opposition must also be aware of potential parliamentarians from its side of the bench who may not necessarily vote in favour of the selected candidate.

Apart from Anwar, the other likely candidate is former Prime Minister Mahathir Mohamed. But he is unlikely to command the favour of PKR, given how dynamics between Anwar and Mahathir was what precisely ignited the political crisis of February 2020 in the first place.

If both motions are successful, the power vacuum would be filled and the position of prime minister and the government would be determined. But these steps will require detailed planning and careful coordination.

WOULD OPPOSITION VOTE DOWN THE 2022 BUDGET?

Third, if the Opposition is unsuccessful in unseating Muhyiddin Yassin as Prime Minister in September, there is still one remaining opportunity this calendar year, when the 2022 Budget must be tabled in October.

Attempts last October to defeat the 2021 Budget failed after the government launched a campaign to lobby for support, with the king also urging politicians from both sides of the aisle to unite behind the goal of safeguarding economic recovery and people’s well-being.

It will be very politically unpalatable for the Opposition to oppose the Budget when livelihoods and businesses are at stake, but this seems like the final opportunity this year for the Opposition to demonstrate that Muhyiddin no longer controls the majority of the House.

However, the Opposition could also vote down the Budget on the grounds that it disagrees with certain allocations, and if played well, could reverse this sentiment.

(Parliament is scheduled to sit between Oct 25 to Dec 16 to debate the Budget.)

The problem is the longer the political impasse drags on, the more time there is for parties and political leaders to entice, cajole and persuade individual parliamentarians over to their respective sides.

In the Sabah state election campaign, the Pakatan Harapan had claimed that as much as RM32 million (US$7.6 million) was offered to each state assemblyman to defect.

Settling the question about political leadership and bringing forward the vote of confidence as soon as possible would reduce the window for such dealings.

However, that decision lies solely in the hands of the prime minister. We also cannot rule out further backdoor dealings even after one side has won the prime minister’s office.

PLAYING THE INCUMBENCY CARD

Prime Minister Muhyiddin Yassin continues to have the upper hand at present, if only because of the power of incumbency. Notwithstanding any plans the Opposition might have, there are still steps that Muhyiddin can take to shore up his position.

If he plays his cards right, he could still steer things in his favour and even maintain a minority government if no other parliamentarian possesses the confidence of a majority.

The Opposition’s uphill climb to build a consensus on a PM candidate may even help Muhyiddin. The longer they take to coalesce around a single leader, the better for Muhyiddin.

After all, it’s really up to him and the Speaker of Parliament to allow a motion of confidence in Parliament.

Alternatively, Muhyiddin might also decide to tie the motion of confidence with the tabling of the 2022 Budget, upping the stakes and tying his fate to the popular desire for more government aid.

It would be extremely challenging, given the economic circumstances and the need for government to approve and distribute additional aid, for the Opposition to be seen blocking the Budget.

Muhyiddin could also engineer a confidence and supply agreement (CSA) with political parties like the Democratic Action Party (DAP) to win favour, taking a leaf from UMNO’s playbook.

In Perak, UMNO managed to secure sufficient support to oust the Bersatu Chief Minister in December 2020 in a no-confidence motion after providing constituency development funds to opposition state assemblypersons in exchange for support, and subsequently had one of its representatives assume the role.

Providing lucrative constituency development funds to opposition Members of Parliament can be attractive at this stage when politicians are increasingly depended upon to provide cash and food aid to hungry and pandemic-struck constituents.

Finally, Muhyiddin could capitalise on government institutions to discredit opposition leaders in the public eye, for example, putting pressure on the Malaysian Anti-Corruption Commission to fast-track investigations of corruption.

Already Syed Saddiq, founder and sole MUDA parliamentarian has been charged on Thursday (Aug 5) with two counts of corruption which he pled not guilty to. Opposition MPs who attempted to enter Parliament last Monday are also being investigated by the police under the Penal Code and Peaceful Assembly Act.

Unless the impasse is resolved quickly, Malaysia’s national outlook will be plagued by the consequences of political instability, as a pandemic continues to ravage the country.

A final note, however, is that whichever political coalition comes to power will likely function with a small majority. We have witnessed the end of dominant party politics and both Malaysian politicians and society will have to adapt and react likewise.

Tricia Yeoh is CEO of the Institute for Democracy and Economic Affairs.

Posted in Elections, General Politics | Leave a comment

In the fight against COVID-19, what can states do?

Posted on July 20, 2021 by Tricia

This article first appeared on Malaysiakini here, on 14 July 2021.

As the country continues to battle Covid-19, several states have attempted to take matters into their own hands. For example, as of July 13, the Sabah and Sarawak state governments allowed dine-in at eateries, despite not being allowed to do so under the federal government’s National Recovery Plan (NRP).

Both states have moved from Phase 1 to Phase 2 of the NRP, whereas the NRP only permits dine-ins for states in Phase 3.

Separately, some have called on local governments in Selangor to use their powers to take stricter measures against factories. The Local Government Act 1976 gives power to local governments to issue operating licences to factories.

So local councils – which receive instructions from the state government – could withdraw licences for factories to operate, superseding the letters that some factories received from the Ministry of International Trade and Industry (Miti) allowing them to continue operating under the enhanced movement control order (MCO).

These incidents call into question the overlapping and conflicting powers of the federal and state governments in Malaysia, which have arisen multiple times since the start of the MCO issuances in March 2020.

Can the states contest nationally-set rules with regard to the MCOs and on what grounds can they do so? What can federal and state governments do better – separately and together – in addressing the public health and economic crises we currently face?

How can cooperative federalism, where both federal and state governments work together flexibly to achieve common goals, be put into action?

Contestation and conflict between federal, state and local governments

First, all MCOs in the country are currently issued under federal law, specifically under the Prevention and Control of Infectious Diseases Act 1988 (PCIDA).

Because a corresponding order defines the “infected area” to include all states and the three federal territories of Malaysia, one legal interpretation is therefore that all states must comply with the MCOs as gazetted by the Attorney-General’s Chambers.

Further, Article 81 of the Federal Constitution requires that states must “comply with federal law to not prejudice or impede the executive authority of the federal government”.

However, an alternative view (that I previously wrote about here) is that the Federal Constitution places public health, sanitation and prevention of infectious diseases within the Concurrent List in the Ninth Schedule, which means that both federal and state governments must jointly decide on these matters.

And since all laws need to adhere to the supremacy of the Constitution, even the PCIDA and all regulations related to it should have had joint state approval. That the states were not meaningfully consulted on the regulation of these MCOs (whether full MCO, enhanced MCO, recovery MCO or otherwise) could be a matter for future debate.

Secondly, what has been obscured by the thicket of government jargon is that the NRP is not grounded upon any law or federal Act. It is just a plan – for now.

Because of this – and precisely because federal and state governments constitutionally have joint jurisdiction over public health, sanitation and prevention of infectious diseases, there is a strong argument to be made that state governments can interpret the finer details of what is entailed within the NRP, either jointly with or separately from the federal government.

Sabah’s Deputy Chief Minister Jeffrey Kitingan has also urged for Sabah to enact state legislation over public health, to avoid confusion over the matter.

Third, it is certainly important to consider the role played by local governments. The Local Government Act 1976 grants local governments a wide array of powers, including the ability to preserve public health and prevent the outbreak and spread of diseases, to regulate and enforce quarantine and the disinfection of persons and of places and things.

Equally relevant is their authority to regulate business operating hours and to set conditions for issuing licences and permits.

While it is true that state governments can direct local councils to withdraw or suspend operating licences from factories as urged by some, this however may not be an ideal move as withdrawals are of a permanent nature and may cause unnecessary bureaucratic hurdles in re-issuing them again.

This would also send a negative signal to investors already jittery about the worsening business conditions in the country, given the prolonged political instability.

Strengthening shared rule and self-rule

What, then, can state and local governments do in the fight against Covid-19? In considering available options, one must consider how to strike that often delicate balance between shared rule and self-rule, where shared rule refers to how subnational units like states can participate in decisions that concern the entire nation, and self-rule refers to the extent to which states can decide, finance and implement their own policies.

First, the federal government must incorporate state governments meaningfully into the decision-making process. What Finance Minister Tengku Zafrul Abdul Aziz as the Coordinating Minister for the NRP must now do – if not already being done – is to consult directly with all heads of state governments, regardless of their political affiliation, on a daily or weekly basis.

However, some questions remain. Will this replicate or replace the role currently played by the National Security Council? Will NRP updates be provided publicly and transparently? Instead of duplicate federal bodies that make top-down decisions, a Federal-State Pandemic Council should be set up immediately that makes states equal partners with the federal government.

Regardless of institutional set-ups, a free flow of data must be exchanged regularly between federal and state governments with regard to:

  • Sources of infection (raw data, as well as analysed data on clusters, positivity rates and more)
  • Testing (location, number and types of tests being carried out)
  • Vaccination (location, number and types of vaccinations being given)

This includes a regular exchange of data from respective state government mobile applications, such as Selangor’s SELangkah.

Second, as called upon by many, the federal government must decentralise the vaccination process more widely. Again, it is a good thing that states like Selangor have begun trying to procure their own vaccines independent of the federal government’s National Covid-19 Immunisation Programme.

States can independently procure vaccines if they have the resources to do so. State governments (and through private initiatives like Pikas) should also be allowed to embark on massive vaccination education programmes, including public relations campaigns to discourage vaccine hesitancy, which is still a problem, especially in the more rural constituencies.

Third, the federal government should consider devolving some of the decision-making over lockdowns and loosening up of lockdowns to state governments. State and local governments are in closer proximity to the affected areas and are thus in better positions to make informed decisions over potential highly infectious areas.

This is premised on subsidiarity, which is the principle that a central authority should have a subsidiary function and perform only those tasks that cannot be performed at a more local level. Successful pandemic management in some states may further incentivise other states to mimic best practices.

Conversely, state and local governments should also be empowered to decide over loosening strict lockdowns, especially in green zones where small businesses should be allowed to operate.

Small traders and micro, small and medium enterprises (MSMEs) in low-risk districts should not have their livelihoods adversely affected if it is safe for them to operate.

Instead of painting the entire state as high-risk, more detailed and systematic analysis over which districts or regions within states are safe should be conducted.

Strict compliance of SOPs (for instance, not crossing between districts) can be monitored, but within those green bubbles – and the geographic lines can be jointly determined between local and state governments – activities should be allowed to operate.

Schools within these green bubbles should therefore also be allowed to reopen. On this note, all teachers and educators should be given priority in the national vaccination programme.

Emergency as a wild card – and long-term planning

On a final note, there may be questions arising as to the impact of the emergency on state rights. No regulation or plan was actually implemented by the federal government with regard to combatting Covid-19 itself.

But because the current emergency extends throughout the country, the federal government could therefore dictate state government behaviour and step into state public policy matters, which includes how state governments manage the NRP.

Hence, if the federal government wants to, it could legally step in to take action against the Sabah and Sarawak state governments under the guise of the emergency.

However, this will be greatly unpopular, especially since the emergency is slated to end in less than a month from now, on Aug 1.There is a possibility that the present federal government will request for the emergency to be extended, but this would be a foolish move by all measures.

Finally, over the longer term, there should be a consideration over moving Medicine and Health from the Federal List in the Constitution to the Concurrent List.

As of July 2021, public hospitals in the Klang Valley are critically short of medical equipment (which private initiatives such as this have resorted to raising funds for).

A state like Selangor which has adequate financial resources to support such distressed hospitals would be able to contribute funds, which it currently is not permitted to.

Malaysia needs to prepare for future pandemics or medical emergencies. Emerging from Covid-19, the public healthcare system will require innovative and sustainable financing.

The Covid-19 pandemic continues to pose important questions as to the dynamics of the relationship between the federal and state governments in Malaysia. Developments over the last one and a half years reveal that it is time for a thorough review to be done over the Ninth Schedule.

In our highly administratively centralised government, steps can be taken in the immediate future to consider how some – not all – public policy or health policy areas can be decentralised to state and local governments for increased efficiency, effectiveness, responsiveness and equity.

While national standards and norms can be set by the centre, state and local governments should be empowered with the capacity, skills and knowledge to implement these regulations. A national crisis is a good time to begin the decentralisation planning process.

TRICIA YEOH is the CEO of the Institute for Democracy and Economic Affairs (Ideas). She is also a PhD candidate at the University of Nottingham Malaysia.

Posted in Federalism, Health, Public Administration | Leave a comment

Will Pakatan Harapan’s Hold on Selangor Continue?

Posted on January 22, 2021 by Tricia

This was published as a Trends by the ISEAS-Yusof Ishak Institute in January 2021, and the full publication can be accessed here.

Executive Summary

• When the Pakatan Harapan (PH) federal government fell in
February 2020, PH also lost control over the states of Johor,
Malacca, Perak and Kedah. In Sabah, PH-aligned Warisan was
replaced by the PN-aligned United Alliance of Sabah.


• PH maintained its hold on three states—Selangor, Penang and
Negeri Sembilan. Selangor’s position is of unique interest, given the
largest share of PH assemblypersons comprising members from the
People’s Justice Party (Parti Keadilan Rakyat, or PKR), the party
which has faced significant elite splits in 2020.


• The present stability of PH’s survival in Selangor can be accounted
for by the sheer majority it possesses within the legislative
assembly, comprising forty-one out of fifty-six state seats. Unless a
significant share of assemblypersons were to defect, the change in
state government would be highly unlikely.


• PH built a strong base in Selangor during its time in power over
more than a decade, securing performative legitimacy and rooting
itself strongly within the community.


• PH has benefited from the highly urbanized and educated
demographic profile of Selangor. However, the economic fallout
from the COVID-19 pandemic has likely changed the landscape,
which may in turn affect how constituents will now respond to
goodies offered by the federal government.


• Although PH in Selangor has survived the national storm, its future
performance remains uncertain. This year’s political realignment,
public opinion towards PN and the 2018 redelineation exercise
where the number of Malay-majority seats has grown may hamper
PH’s ability to maintain its strong margin.

Posted in Federalism, General Politics, Selangor | Leave a comment

State Governments and the 2021 Emergency: Unfettered Powers at the Centre

Posted on January 22, 2021 by Tricia

This commentary was first published on Fulcrum, ISEAS-Yusof Ishak Institute’s commentary website, here on 22 January 2021.

On 12 January, the Agong and the Prime Minister separately announced that the former had approved an Emergency Declaration for Malaysia that took effect as of 11 January. The justification for this decision was the seriousness of the Covid-19 situation, which in fact was already being dealt with by the Movement Control Order 2.0 to begin on 13 January. The Emergency has been considered by several analysts as unnecessary given the existing MCO.

That said, what are the implications of the Emergency on the 13 state governments throughout the country? What has been rigorously discussed is that Parliament is suspended and no general election will take place. On that note, state legislatures are also suspended and no state election will be allowed throughout this period. The most immediate implication of this is that the Sarawak state election that is due to be held by 17 August this year may have to be postponed – if the Emergency is prolonged beyond the scheduled end date of 1 August.

According to Emergency Ordinance 2021, the state governments and their executive councils or cabinets are still in power. Their legislative assemblypersons (Ahli Dewan Undangan Negeri, or ADUNs) are also supposed to continue carrying out their duties. On the surface of things, it would seem that the status quo remains since all state governments will carry on as per usual, exercising both their executive and legislative functions.  

In reality, there are many questions that arise.

First, without the legislators actually being permitted to conduct legislative assembly sittings, it will be impossible for ADUNs – as their federal counterparts in Parliament – to perform their “legislative functions” like scrutinise budgetary expenditure, amend or legislate new laws, or provide oversight over any executive decisions being made. Motions of confidence – or no confidence – will also not be voted upon during this period.

While it may be feasible for select committees to meet online, there has not been any precedent of the entire legislative assembly sitting taking place online. And even if permitted, not all legislative assemblies especially in the more rural parts of Malaysia may have the necessary internet connections and bandwidth to do so. So how will state assemblypersons actually exercise their legislative functions?

Second, can the federal government intervene into state affairs? The Federal Constitution says it can. Article 150(4) gives the federal government overwhelming powers to intervene into state matters during an Emergency. Despite the legitimacy of state governments, the federal government can legally step in to direct state governments to act in ways they dictate. The only exception to this would be for matters under Islamic laws, Malay customs, native laws or customs in Sabah and Sarawak, religion, citizenship or language. This is in line with Article 150(6A).

The federal government could very well step into state public policy matters, instructing state governments to transfer state land to the federal government, take over control of local councils, replace local councillors with their own appointees, and more. The Ninth Schedule of the Federal Constitution spells out what state governments control, the list of which includes land, local government, and agriculture and forestry. Regardless of whether this will actually happen, the fact is the federal government can legitimately step in to take control, and that’s alarming.

Finally, the Emergency also paves the way for political intervention of the centre in the case of inter-party or intra-coalition leadership disputes. In the past, the federal government did in fact declare states of emergency in several states when there were political disputes, and these resulted in changes in state governments: in Sarawak in 1966, and in Kelantan in 1977. The question is whether the current federal government would make use of the present Emergency to do the same within states if there were uncertainties surrounding the confidence of a certain leader’s majority, and hence command of the assembly.

While there are serious consequences of the Emergency at the national level, the effects at the state level are equally as chilling if followed through. In short, the Emergency has provided the Executive arm of the federal government unfettered powers, giving it far-reaching abilities to intervene into the very intricate functioning of all 13 state governments throughout the country if it so wished. Some have expressed frustration at having included Sarawak into the national emergency too; Sarawak had only recorded less than 2,000 cases when the emergency was announced. Indeed, these sentiments are fair.

It remains to be seen when the Emergency will be called off, and it would be wise at that point in time to examine what – if any – consequences would have been on the state governments then. Would state legislators really be permitted to perform their legislative functions as set out by the Emergency Ordinance? Would the federal government have intervened in any public policy matter under the states’ constitutional control? Would they have interfered politically in any state-level leadership disputes that arose? The next few months will provide a hard look into how the federal government might use its Emergency powers to intervene in state governments’ functions.

Posted in Federalism, General Politics | Leave a comment

Don’t derail EU-Malaysia trade relations because of palm oil biofuel

Posted on December 30, 2020 by Tricia

This article was first published in The Edge Malaysia here on 22 December 2020.

Malaysia recently agreed to join and ratify the Regional Comprehensive Economic Partnership (RCEP), which was welcomed and celebrated after many years of long negotiations.

However, one other trade deal has faced significant challenges, that of the Malaysia-EU Free Trade Agreement (MEUFTA). Negotiations began in 2010 but stalled in 2012. In 2016-17, a “stocktaking exercise” took place to assess if negotiations could resume, but since the 14th general election in 2018, there has been no action on the renegotiations.

One of the main stumbling blocks preventing the resumption of MEUFTA negotiations is the EU’s contention over Indonesia and Malaysia’s palm oil biofuel. In March 2019, the EU adopted the Delegated Regulation for its second Renewable Energy Directive (RED II), which has upped the tension over the EU’s concerns regarding biofuels.

In short, the EU aims to completely phase out the use of palm oil biofuel by 2030, on the grounds that oil palm plantations contribute to a larger carbon footprint than the forests they replace and hence are a threat to climate change. Following the decision, Indonesia filed a lawsuit against the EU last December, and since then Malaysia is reportedly planning to file a legal action with the World Trade Organization (WTO), claiming that the EU’s policy is “discriminatory” and “unreasonable”.

The political tension over the issue is set to continue. Malaysia has always been firm on its stand. Under the Pakatan Harapan (PH) government, the then Primary Industries Minister Teresa Kok termed the EU policy “the politics of protectionism”, which the present Perikatan Nasional (PN) administration’s Plantation Industries and Commodities Minister Dr Mohd Khairuddin Aman Razali has taken further in instituting legal action against the EU. In fact, he asserts that this discrimination by the EU brings adversity to “more than three million Malaysians involved in the palm oil industry, as well as over half a million oil palm smallholders”.

So, what is the EU actually doing? It is now saying that palm oil biofuel does not count towards renewables targets. This does not mean it is banned but that it would not qualify to obtain the subsidies and reliefs which other renewables benefit from.

What is the justification for this? The EU’s position is that, first, oil palm plantations are a deforestation threat, resulting in a number of problems. Many plantation owners choose to clear their land for the following year’s cultivation through burning, which contributes to carbon emissions and has led to the region’s perennial air pollution of haze.

Second, the EU believes that biodiversity is reduced as the rainforest ecosystem, the habitat of wildlife, is destroyed owing to deforestation for oil palm plantations. According to the International Union for Conservation of Nature (IUCN), oil palm estate expansion is a threat to 54% of the world’s threatened mammals and 64% of the world’s threatened birds. With the implementation of RED II, the EU hopes to preserve wildlife such as orangutans, gibbons and tigers.

Third, the EU recognises that the global population is estimated to grow to 9.7 billion by 2050 and expects that food demand will rise by more than 50%. Thus, it is essential to make more efficient use of agricultural land. Forest management has become crucial for the purpose of food security in the future. The EU therefore wants to avoid any policies which promote the use of land to produce biofuels over food.

It is important to recognise that the action by the EU is not a “ban” per se, and also is motivated by important sustainability concerns which Malaysia needs to take heed of. However, there are also a number of problems with the approach taken by the EU. First, the EU is taking this action unilaterally. Without the collaboration of other major palm oil importers such as India and China, the demand for palm oil is expected to shift to other markets rather than reduce. Consequently, palm oil producers may need to lower their price to clear the surplus in other markets which ultimately promotes demand for palm oil, leading to a net increase in unsustainable production and deforestation.

Second, the policy is applied as a blanket policy to all palm oil — punishing sustainable and unsustainable producers alike.

Third, imposing universal sustainability certification standards may amount to a disproportionate cost burden inflicted on producers and smallholder farmers. A recently released report by the European Parliamentary Research Service has in fact concluded that smallholder farmers in Malaysia could be forced to deal with an average of 8% loss in net income per hectare.

As the cost is borne by producers and passed to EU consumers through higher prices, this may prevent smallholder producers from being certified. In fact, this certification is only required of “foreign” producers, suggesting that the move “could be considered by the WTO as arbitrary or hidden protectionism”.

Finally, the methodology for disqualifying palm oil, but not other products such as soya and rapeseed, has been criticised as being arbitrary. This exacerbates the perception that the move is protectionist as it favours biofuels produced in Europe and North America.

Aside from these issues, perhaps the biggest gripe Malaysia has with the EU action is the role it plays in the broader narrative that palm oil is unsustainable. Following an effective consumer-driven movement, palm oil has been associated with deforestation and the destruction of natural habitats. And it is this negative perception — which affects all palm oil products, not just biofuel — which is what worries Malaysia the most.

So, how should we move forward? First, we need to recognise the validity of the arguments on both sides. Yes, the EU’s policy may be flawed. But it is also being misrepresented as a ban and reflects important sustainability concerns that Malaysia needs to take seriously. We also need to put the issue in its proper perspective: Dr Ruslan Abdullah, director of science and environment at the Malaysian Palm Oil Council, stated at an IDEAS forum in 2019 that about 800,000 out of 19.5 million tonnes of palm oil were exported by Malaysia to Europe for use in biofuels, which indicates that EU’s phasing out only affects 4% of Malaysia’s annual palm oil.

Second, we need to address the bigger issue of the negative perception of the palm oil industry. Instead of crying that it is not being fair, Malaysia must make concrete improvements. The country has been making progress towards sustainability: as at Dec 1, 2020, 88.1% of Malaysia’s oil palm plantations had Malaysian Sustainable Palm Oil (MSPO) certification. However, the MSPO is not regarded as being as strict as the international Roundtable for Sustainable Palm Oil (RSPO) standards, and a number of recent cases highlight ongoing concerns in connection with Malaysia’s palm oil industry.

Finally, we need to ensure that we manage this issue without compromising Malaysia’s broader relationship with the EU. Yes, palm oil is important — but palm oil products other than biofuel would benefit from liberalised trading terms, which an FTA could deliver. Not to mention the rest of Malaysia’s economy, which could benefit from increased trade and investment from one of the world’s largest trading blocs.

So, let us move forward constructively through dialogue in the best interests of palm oil and Malaysia as a whole.

Posted in Economics | Leave a comment

Federal-State Relations under the Pakatan Harapan Government

Posted on November 6, 2020 by Tricia

This was published as a “Trends” by the ISEAS-Yusof Ishak Institute Singapore, at which I am a Visiting Research Fellow (July to December 2020) in October 2020.

The full publication can be accessed here.

Executive Summary

• On 9 May 2018, Malaysia’s Barisan Nasional (BN) government lost
the country’s 14th general election (GE14). Replacing it was the
Pakatan Harapan (PH) coalition, made up of four parties, three of
which had had experience cooperating with each other for a decade,
namely Parti Keadilan Rakyat (PKR), the Democratic Action Party
(DAP) and Parti Amanah Negara (Amanah). The fourth was the
new Parti Pribumi Bersatu Malaysia (PPBM) led by Dr Mahathir
Mohamad.


• The election also saw equally significant changes at the state
government level. PH now controlled seven states in total, up from
two, while BN went from controlling ten states to retaining but two.
PAS regained Terengganu and with its control over Kelantan now
held the two East Coast states. The Sabah state government, held by
Parti Warisan Sabah (Warisan) aligned itself with PH, while the
Sarawak state government chose to stick with BN.


• As many as ten of the sixty promises listed in the PH 2018 election
manifesto related to federalism and Sabah and Sarawak, an
indication of the growing importance of these two states (and of
state issues more generally).


• The PH administration’s two significant set-ups were the Special
Select Committee on States and Federal Relations and the
Special Cabinet Committee on the Malaysia Agreement 1963
(MA63). Serious attempts were made to address concerns by
both committees, with achievements being more visible in the
Special Cabinet Committee on MA63, possibly due to the greater
attention given on Sabah and Sarawak. Issues brought up within
the Parliamentary Special Select Committee were not substantively
addressed.


• PH’s time in power saw how states aligned to it maintained a
smooth working relationship with the federal government. What was
more interesting to note was that even non-PH aligned states such as
Kelantan, Terengganu and Perlis also received favourable attention
from the federal government.


• Federal-state relations were much more aggressively tackled under
the PH government than under any other preceding administration.

Posted in Uncategorized | Leave a comment

The Rise and Fall of State Governments in Malaysia: Institutions, Constitutions and Political Alignment

Posted on October 6, 2020 by Tricia

This piece was published as a “Perspectives” by ISEAS-Yusof Ishak Institute Singapore, at which I am currently a Visiting Research Fellow (July to December 2020), on 11 September 2020.

The full publication can be accessed here.

EXECUTIVE SUMMARY


• The Pakatan Harapan-aligned Sabah state government held by Parti Warisan Sabah (Warisan) fell in late July 2020 when 13 state assemblypersons defected to align with former Sabah Chief Minister and Sabah Barisan Nasional chairman Musa Aman.


• The Sabah state election will be held on 26 September 2020, ahead of a general election which is widely expected to be called before the end of the year. The outcome of the Sabah state election will therefore carry important lessons for all political parties at the national level in crafting their political strategies.


• Historically, political alignment with the federal government seemed to be the most decisive factor in shaping the outcome of state government formation. Nonetheless, the Rulers or governors of respective states have played a crucial role on various occasions, by exercising their discretion on whether it was appropriate to appoint a new Chief Minister or allow the dissolution of a state legislature to hold new elections. The Rulers in turn have to operate within the framework of the state constitutions.


• The electoral strategies at state level have become extremely complicated, given the existence of multiple parties, the fluidity of their collective and individual members’ political loyalties, and the ongoing negotiations over leadership and prime ministerial candidacies.

Posted in Uncategorized | Leave a comment