But rather than offering evidence of any tangible economic achievement, these experts have chosen to dwell on the potential impact of his policies going forward.
Sunway Business School economics professor Yeah Kim Leng spoke about how the political stability achieved in Anwar’s first year in office will bring economic benefits, while Australian-Asean Chamber of Commerce vice-president Nordin Abdullah gives him credit just for putting in place “strategic plans” such as the Madani economy framework.
Geoffrey Williams of the Malaysia University of Science and Technology was a little more on the spot, touching on the economic growth achieved in the past year under Anwar’s stewardship.
“His approach is different, and this obviously disturbs some vested interests. From an objective perspective, he has been very effective in a short period of time,” Williams said, giving a ringing endorsement on Anwar’s leadership which he describes as probably “the most effective of the six surviving prime ministers”.
Anwar took office exactly one year ago, on Nov 24, 2022. However, he did himself no favours when he took the mantle of finance minister.
This meant that the people, as well as his political opponents, held him to a higher standard of accountability as he is deemed to be directly responsible for steering the economy.
Slap in the face
Support for Anwar appears to have waned during the course of his reign, as concerns over the economy are top of voters’ minds.
His approval rating has dropped to 50% from 68% last December, according to the Merdeka Center. The survey, conducted last month, revealed that dissatisfaction over the government’s handling of the economy climbed to 43% from 19%.
The unity government’s rating also dropped to 41% from 54%, with 78% of voters citing economic concerns as the biggest issue that they face.
Whatever positives economists may say about Anwar’s economic stewardship, the people’s dissatisfaction over the state of the economy is a slap in the face for the government, and especially Anwar as the finance minister.
One can argue that the economic gods conspired against Anwar, as his administration was not spared the global economic slowdown and effects of high inflation and interest rate hikes.
The World Bank in October downgraded Malaysia’s economic growth for 2023 to 3.9% from an earlier forecast of 4.3%, citing a significant slowdown in external demand.
Meanwhile, the ringgit was the worst-performing currency in Asia after the Japanese yen, hitting its lowest value in 25 years, at 4.792 per US dollar on Oct 23. About RM4.19 billion flowed out of the Malaysian equity market during the first half of 2023, according to MIDF Research.
Pacific Research Center of Malaysia principal adviser Oh Ei Sun says given Malaysia‘s economy is still wallowing in the doldrums, Anwar would have to take the heat as finance minister, who typically is tasked with reviving the economy.
“It would help if he at least appoints a second finance minister to shoulder the day-to-day running of the ministry,” he said.
Oh thinks Anwar‘s leadership style is more an inspirational one, and so sometimes his “abstract aspirations” have to be more effectively translated into concrete and implementable policies.
“This is especially so with his Madani economy aspirations,” he said, alluding to the difficulty most Malaysians face in trying to understand what the Madani economic framework is all about.
Importance of political stability
As economic performance and political stability are inextricably linked, Yeah said Anwar’s achievement is the restoration of political stability after three changes of prime ministers in three years in the wake of the 1MDB scandal.
“(Anwar’s) key contribution is the restoration of trust in the integrity of the government and its continuing effort to curb corruption.
“Policy certainty and political stability are the rationale to attract foreign investors and sustain their confidence.
“In the first year, we have seen the unity government coming together and ensuring the continued functioning of the administration and setting the economic direction,” he said, adding that Malaysia has seen a number of investment proposals in the early stages of implementation.
Yeah said that with political stability and the reduction of political risk coupled with the investor-friendly policies that are being rolled out, Malaysia can expect more vigorous investment activities in the coming two to three years.
Nordin said one of Anwar’s notable achievements in the first year of government is to roll out strategic plans such as the Madani framework, the national energy transition roadmap (NETR), and the new industrial master plan 2030 (NIMP 2030).
“These has set the tone for what’s going to come for months and years ahead for foreign investors. That is a level of assurance investors can expect for now and into the future.
“It allows them to plan in tandem with what the Malaysian government is doing,” he told FMT Business.
Poor communication
Williams said Anwar’s international engagements has got the economy growing with strong investment approvals. “The country has avoided an (economic) contraction while headline inflation is returning to normal levels, with core inflation falling and interest rates normalising.
“He has started the process of subsidy rationalisation and structural reforms with economy minister Rafizi Ramli. These are all good initiatives,” he said.
However, he said Anwar should be more transparent in recruitment of policy designers and advisers, and have a wider and more eclectic team with stronger, higher profile communicators among them.
“It is no secret that communication of government policy has been lacking and that should be beefed up because so far, Anwar has been the main spokesman. His advisory team has been quiet in explaining (economic) policy to the wider public,” he added.