KUALA LUMPUR – March 21, 2018: International research firm BMI Research is of the view that the manifesto of Pakatan Harapan for the 14th general elections will be detrimental to the Malaysian economy.
The firm under the Fitch Group said the opposition pact will struggle to implement its pledges, with its promises being populist and aimed largely at addressing the people’s complaints against the government.
Alternatively, BMI Research thinks that Pakatan would do better to focus on institutional reforms.
It pointed out that the unrealistic nature of the manifesto makes its credibility among voters questionable.
According to BMI, businesses are unlikely to be receptive to the pledges, especially with existing reports of smaller firms struggling to cope with the current minimum wage, which Pakatan vows to increase.
On the promise to abolish the goods and services tax (GST), BMI said this accounts for 17.9 per cent of the government’s revenues and has been growing steadily since the share of 13.7 per cent in the second quarter of 2015 and abolishment of GST would place downside pressures on the government’s revenues.
Increasing subsidy payouts will also present additional pressures, with the share of subsidies falling to 5.3 per cent of the total in the third quarter of last year, from 16.8 per cent in the second quarter of 2010.
Another point relates to China as one of Malaysia’s largest investors and trade partners, with BMI saying that promises to review contracts for infrastructure projects could jeopardise Malaysia’s relations with China.