Big challenges for new Cabinet

MAKING A POINT By JAGDEV SINGH SIDHU

Jagdev Singh Sidhu says ministries need to fulfill election pledges while maintaining fiscal prudence.
THE stock market has shown it likes the results of the general election.
It means a continuation of policies that had won investor approval sometime ago.
Stocks
are up, maybe no more than the bunch of counters from Sarawak. Blue
chips have rebounded after election risk was removed. But it's now time
to get down to business with the Cabinet now formed with a blend of old
and new faces.
Certainly, it will be business as usual when it
comes to policy implementation. But it will be new territory when it
comes to other aspects.
For one, Prime Minister Datuk Seri Najib Tun Razak
as finance minister will have his work cut out for him. The manifesto
promises are abundant and it is going to be costly. An expansion of the
MRT and LRT networks is on the cards, along with other mega projects
like the 2,300km Pan Borneo Highway and other expenditure-laced
programmes.
In naming his Cabinet this week, the Prime Minister
has certainly picked a group of ministers who will oversee not only the
implementation of existing policies and election pledges, but also
ensure that it will not be business as usual in some areas.
From
a business perspective, the efficiency of all ministries play a role in
building investor sentiment and improving efficiency. After all,
business and politics are infused with one another where prosperity of
one part, in my opinion, is leveraged off the other. If businesses do
well, then it's better politics.
The public and investors expect
tougher crime fighting, more transparency, less corruption and better
governance, and the Government should respond to those needs. In this
case, better politics is better business.
I am going to look at
just a handful of ministries where the eyes of investors will be
focused on. For sure, it starts with the money and that's where the
finance ministry comes in.
Investors and the public will be
watching just how the ministry is going to revamp the revenue base of
the country plus reduce wastage. Capping the fiscal deficit will be
important and it will also be interesting to see if a goods and service
tax will be introduced.
It sure will be unpopular, if not it
would have been introduced by now. If the need outweighs the political
cost, then it should be introduced sooner rather than later.
Black and white
But
first a comprehensive awareness campaign needs to be conducted so
people really know what's black and white with a new tax regime.
Whether subsidy rationalisation gains momentum will also bear watching
out for as deferring it will certainly strain the fiscal position.
Next,
eyes will be on PR1MA, which reports to the Prime Minister's
Department. A bold promise of building 1 million homes was made during
the campaign. It's an astonishing number of new homes to be built but
it's something that is sorely needed.
The young are finding it
increasingly difficult to own a home these days. Pickings for
affordable housing in decent areas are slim at best and a massive
public housing programme that is connected to public transportation
routes and networks is essential.
That will give the young and
other prospective home owners an avenue of owning a house and lowering
their cost of living, which is already a growing concern among most
Malaysians.
The appointment of Datuk Seri Abdul Wahid Omar as a minister should see him work closely with Datuk Seri Idris Jala, who heads Pemandu. Wahid has a terrific track record when it comes to implementing.
He oversaw the restructuring of the UEM Group after the financial crisis, brought changes to Telekom Malaysia Bhd and certainly injected far more dynamism into Malayan Banking Bhd as president and CEO of the country's largest bank.
Wahid,
as the head of the Economic Planning Unit, together with the ideas man
in Idris should certainly work in tandem to bring further and speedier
transformation to the country's economy.
Weak external demand
Then there is Datuk Seri Mustapa Mohamed.
Economic growth in the first quarter wasn't the strongest but was
supported by domestic demand. Net exports shrank but investments,
especially domestic, is strong. Weakness in net exports is a result of
weak external demand and also higher imports.
Mustapa continues
where he left off and the technocrat in him will aid in ensuring the
ministry gets on with the job of attracting investments and creating
jobs for Malaysians.
Acting business features editor Jagdev
Singh Sidhu is waiting to see just how different things will be when it
comes to implementation.