About Nick: i am an economist based in malaysia. I write about development economics, while sneaking in a pop culture reference or two.

May 9th 2018 and the Evolution of a Nation

Published in The Edge, May 2019.

Next week marks the one year anniversary of Malaysia’s historic 14th General Elections, where, for the first time since Independence, the incumbent Barisan Nasional government lost to the Pakatan Harapan coalition at the polls. Since then, much has transpired on multiple fronts, but if there was one news item that could perhaps provide an overarching view of events since the Election, it would be the recently released Merdeka Center poll results on the approval rating of Prime Minister Tun Mahathir Mohamed and the Pakatan Harapan coalition that he leads.

In the survey, the Prime Minister’s approval rating took a nosedive, falling from 71% since August 2018 to 46% in April 2019. Furthermore, the survey also found that 39% of Malaysians gave Pakatan Harapan a positive rating, compared to 66% in August 2018. The proportion of voters who felt the ‘country was headed in the wrong direction’ increased from 24% to 46% over the same time period. The Merdeka Center identified the likely factors for the decline as, “…the state of the economy as perceived by ordinary consumers, the perceived performance of the administration, and concerns over Malay rights and privileges as well as fair treatment of other races in Malaysia.”

In fact, the ‘to-do’ list of the Pakatan Harapan government is very long. In addition to the issues quoted by the Merdeka Center, it also has to deal with, among others, rising inequality between the B40 and T20 – as per the Khazanah Research Institute’s State of Households 2018, the re-negotiations of mega infrastructure projects, reforms of important institutional pillars, a youth unemployment rate that is approximately three times the national unemployment rate, the weeding out of corruption, and much more. And all this amidst a global environment that is tepid towards emerging markets, and a United States – China trade war that is still ongoing, as well as a domestic environment where household indebtedness is close to 90% of GDP, and where government finances are stretched and limited. 

Critics of the Pakatan Harapan government would argue that some of these issues are self-inflicted. It’s true that the government has made some avoidable missteps. For one, in the initial months of the administration, it seemed as if certain members of the Pakatan Harapan coalition underestimated the weight of their statements and how they may impact capital markets and investors. After all, investors were always going to pay more attention to their statements when they were in power, not when they were in the opposition.

These mistakes have strengthened the case for the opposition and their supporters to say that the current government is clueless, and that everyone who voted for them in the 14th General Elections should be feeling really dumb about themselves and remorseful. For the record, I don’t think the current government is clueless; I think they have made mistakes and I do hope that they learn from them. But it is the latter point which I am seriously opposed to – believing that a change in government in the 14th General Elections was a mistake completely misses the point of May 9th, 2018.

While the General Elections itself was between the 61-year incumbent Barisan Nasional and Pakatan Harapan, frankly, they could have been between the 61-year incumbent Avengers Party and X-Men Party for all I cared. What really mattered is that, for the first time in our history, we know that we can change the government. Of course, at the state level, we have seen state governments change hands, but never the federal government. All we have known is the potential for a government change in Malaysia via the General Elections, we have never actually seen it happen.

And now we have. And, in the really big scheme of things, that matters. A country’s history is, hopefully, not limited to a mere 61 years and change. If we are building something that is meant to last, it should last for as long as there are Malaysians to call this piece of land home. And in that long stretch of history, there will be pivotal moments. Of course, 31 August 1957 is one such moment. As is 16 September 1963. As is 13 May 1969. And many others. 9 May 2018 is such a moment as well in a way that 5 May 2013 could never be. 

Because on 9 May 2018, the nation took a collective step forward. We had a peaceful change of regime at the polls; all fears of riots and unruly unrests were unfounded. We saw millions of Malaysians come together – as voters, as volunteers, as politicians, as postal vote transporters, as police officers – gotong-royong at its very best. And, in the grand scheme of things, that matters a lot more – showing what we can be as a nation – than the argument on whether or not Pakatan Harapan will end up being a good government.

People who do not share this view will argue, with some merit, that I am being naïve. They will argue that a given government cycle, even of five years, can lead a country into a never-ending vicious cycle of tragic outcomes, or can doom a country forever, or whatever else. Sure, it’s always possible, of course, and yes, a bad government will certainly have very significant collateral damage on the rakyat even in the short-term, but let’s try to take a broader look. Countries around the world have recovered and thrived, even, from things like World War One and World War Two, the Great Depression, fascist rule by Hitler and Mussolini, a Great Famine, nuclear bombs, the Black Plague, Civil War, and many others. 

The danger is when we put greater importance on who the ruling party should be, as opposed to what the nation can be. I frankly don’t care who the ruling party should be as long as it does its best for what is best for the country and the rakyat. And every ruling party should always look to earn the vote of every single Malaysian. Now, that’s not to say that we expect the ruling party to always be perfect. Of course, for many of the politicians, even the most seasoned ones, in Pakatan Harapan, this is their first time as government-of-the-day. They were always bound to make mistakes. And, after 61 years of institutional, cultural, economic, societal and political path dependence, surely there was going to be a J-curve for the new government. It is not realistic to expect their trajectory to be exponentially better immediately. 

That said, we do expect them to make the right steps to a better Malaysia. And if they fail to do so, never forget the real message of May 9, 2018. If you don’t like an incumbent government, by all means, vote them out. Make any ruling party earn your vote. In the grand scheme of things, as long as Malaysia remains true to the values its rakyat (not necessarily its politicians) hold dear, we will be fine. May 9, 2018 was never about Barisan Nasional or Pakatan Harapan, it was always about Malaysians.

Complexity and the Services Sector

The Necessity of a Hand-in-Hand Institutional and Societal Reform