malaymail.com | KUALA LUMPUR, 03-Mar-2015 — The growing anxiety among Malaysians bracing themselves for a lean year ahead had likely forced down Prime Minister Datuk Seri Najib Razak’s approval rating in the latest Merdeka Center survey, analysts said.
“The world economy right now is not in good shape, so many people are unhappy,” Dr Zakariah Abdul Rashid, the executive director of Malaysian Institute of Economic Research (MIER), said.
“Furthermore Najib is implementing reforms. Reforms can be quite a painful exercise.”
MIER had in January last year warned Putrajaya to be flexible when implementing key economic reforms, noting public resistance to such moves and growing complaints from the public over the rise in living costs.
But since then, global fuel prices have continued to plunge, which has led Malaysia’s oil-dependent economy to suffer. To manage the impending revenue shortfall, Najib’s government has taken steps for a shift towards fiscal prudence, removing subsidies for sugar and fuel, and introducing a new consumption tax system this April.
Hoping to cushion the impact, the government continued its cash handouts under the 1 Malaysia People’s Aid (BR1M) programme and introduced a managed float system to calculate fuel prices according to market fluctuations.
The system, said Najib last year, would ultimately benefit Malaysians as the increase in savings from subsidies could be better channelled towards the country’s socio-economic development.
But a more discerning Malaysian electorate has only grown more jittery over the state of the economy, the analysts observed.
Last week, independent pollster Merdeka Center’s latest survey revealed that Najib’s approval rating had fallen four percentage points to just 44 per cent in January this year, compared to October last year.
Additionally, almost half the respondents, or 47 per cent, believed that the country was headed in the wrong direction, citing high living costs and an unfavourable economy.
“It’s a long-running theme. Every time there’s a rise in things like fuel, there’s an adverse response,” Merdeka Center’s director Ibrahim Suffian explained to Malay Mail Online.
“But notwithstanding this, there’s dissatisfaction because a lot of economic growth hasn’t trickled down, real incomes haven’t grown, and household debt is rising.”
Yin Shao Loong, executive director of PKR’s think-tank Institut Rakyat, agreed.
“Among the major issues are the rising prices of basic goods, the lack of affordable housing, sluggish wage growth, and an economy that has yet to recover to levels prior to the 1997 financial crisis,” he said.
Penang Institute’s political analyst Dr Wong Chin Huat said the BR1M handouts would only temporarily appease Malaysia’s poorer communities.
“While he gives BR1M to the poor, such handouts could not sustain the voters’ positive move for long.
“Cronyism and nepotism have led to attacks from within his (Najib) party, led by (former prime minister Tun Dr) Mahathir (Mohamad) himself,” Wong added.
Yin also suggested that the new consumption tax system — the Goods and Services Tax (GST) — which is due next month has caused anxiety among consumers and confusion among businesses who feel the policy still lacks clarity.
“This chaos over the major new revenue instrument of the government has undermined confidence,” he said.
“The recent drop in oil price has put further pressure on government revenues. The government has made it clear that they are rolling back subsidies and passing more costs on consumers and businesses.
“While the recent drop in oil price at the pump has eased some consumer pressure, it has also been accompanied by a dramatic fall in the value of the ringgit, making it one of the worst performing currencies in Asia,” he observed.
DAP’s Dr Ong Kian Ming echoed Yin’s observations, and said Putrajaya has done little to address the public’s “serious concern” over the economic uncertainties they expect to face this year.
“The fact that people’s perception has been more negative even though oil prices have dropped showed serious indication of the lack of confidence in Najib’s administration,” the Serdang MP claimed.
“People are aware that although fuel pump prices have dropped, global oil price would affect the government’s budget and they’re not confident that Najib has the ability to manage that properly.”