Bernama has come up with its own spin on the Economist Intelligence Unit’s report on the Malaysian general election. Compare the two reports below:
This is the EIU report:
A fiscal bidding war
The main opposition Pakatan Rakyat (PR) alliance is making many costly promises to the electorate in its eagerness to gain power. However, the price of a PR victory to the Malaysian economy has attracted less attention than the generosity of the Barisan Nasional (BN) coalition government, which has spent lavishly in two consecutive budgets in order to please voters. Full report on EIU website.
And this is Bernama’s spin on the report:
The Economist Intelligence Unit Says Barisan Nasional Will Win 13th General Election
KUALA LUMPUR, Feb 21 (Bernama) — The Economist Intelligence Unit (EIU), which is part of the respected London-based magazine, ‘The Economist’, predicts that the Barisan Nasional (BN) will win the 13th General Election (GE13) based on its successful track record, Prime Minister Datuk Seri Najib Tun Razak’s reform agenda and his successful economic leadership.
For international observers, the outcome of the upcoming polls is already clear, that the BN will be victorious, the EIU said.
It also said the opposition Pakatan Rakyat has been making “costly promises” to gain power, and these were a big stumbling block.
On all these counts, Pakatan Rakyat comes a distant second, prompting the EIU to predict BN will be the winner.
The EIU, a think-tank which offers regular country, industry and risk analysis, said that “it is clearly not feasible” for Pakatan to implement all of its campaign promises.
“For example, providing free secondary education would cost the government RM43 billion, while abolishing car duty would cut tax revenue by RM4.6 billion a year,” it said.
The EIU pointed out that Pakatan had broken many of its earlier promises, including financial assistance for pre-school education, for university students, senior citizens and the disabled; free healthcare for those over 65; lower property taxes; and assistance for home buyers.
On all these counts, Pakatan’s populism has remained just hot air.
In Selangor, for example, BN claimed that Pakatan has implemented only 15 per cent of its 31 election pledges, RM2.4 billion worth, made in its 2008 general election manifesto.
“Selangor Menteri Besar (Tan Sri Abdul) Khalid Ibrahim commented that a manifesto is not a promise but conceded that voters may think otherwise,” the EIU noted.
Compared this with BN’s successful track record in fulfilling its promises, and you have a clear difference in approach.
For instance, Najib has promised Penang 20,000 affordable houses and a monorail service to ease traffic congestion, and if BN comes to power in the state, voters can be sure that these plans would be implemented.
“The stakes are high for both (BN and Pakatan)…the bidding war is likely to continue as both sides make preparations for what is being billed as one of the hardest-fought elections in Malaysia’s history,” the report said.
“Both will need to appeal to young, first-time voters, given that nearly three million people in this crucial voting block have been added to the electoral register since the last election,” it added.
The EIU claimed the “bulk of this group” was undecided about which party to vote for and could swing the outcome of the election.
Najib needs to win big in order to secure the future of his reform agenda, while on the other hand, the opposition leader, Datuk Seri Anwar Ibrahim, wants to be the first to break the BN’s stranglehold on power.
Meanwhile, Umno is upbeat with only weeks left for the polls, as Najib said the party machinery was in the final stages of its preparations.
“We have received the audit report on our machinery and from there I can say our preparations are satisfying.
At the same time, I hope the efforts to strengthen our preparations will continue to be carried out by leaders at the state level,” he told reporters after the Umno supreme council meeting last Friday.
Najib, who is also Umno President and BN Chairman, made the selection of winnable candidates the focus of his strategy, making it clear that the BN should field candidates with the best chance of winning, regardless of which BN component party had kept the seats previously.
Another key reason for the ruling coalition’s strong morale is the “gravity defying” growth of 5.2 per cent that the country is enjoying under Najib’s leadership, along with a jump in domestic and foreign investments. And to top it all, per capita income hit US$9,700 from US$7,500 in 2010.
The EIU agrees with the upward trajectory: “Following an estimated expansion of 5.2 per cent in 2012, we expect GDP to grow at the same rate during the 2013-17 forecast period.”
Growth figures announced yesterday by the Statistics Department showed that the economy accelerated to 6.4 per cent growth in the last quarter of 2012 and supporting the full year growth to expand by 5.6 per cent from 5.1 per cent a year earlier.
Against such a backdrop, the EIU said: “No wonder the writing is on the wall for Pakatan as it tries to cobble together some opposition unity between its squabbling leaders before the polls.”
So you can see that the EIU report is a bit more nuanced than the way Bernama has reported on it.
Why didn’t Bernama report this: “But support for the BN was much weaker, with just 47% of those surveyed saying that they were satisfied with the government.”
And this? “At some point this year, when all of the voter-related fiscal incentives are added up, the 13th general election will be shown to have been the most expensive poll in Malaysia’s history.
Expect more of this kind of spin as the general election draws closer.
The EIU report seems to suggest that widening the tax base would be a good way of reducing the fiscal deficit, such as through the BN’s plan to introduce a goods and services tax. But GST is really not necessary and will hurt the lower income group. Both the BN and Pakatan need to move away from blanket cash handouts (that do not differentiate between the rich and the poor) and target their precious financial resources in a more meaningful way at groups that need them the most. Otherwise, there will be no end to this competition to see who can provide more cash handouts. It defeats the concept of having a progressive taxation system under which those who earn more are taxed more to finance social services for the more vulnerable and poorer segments of the population as well to improve the quality of, for instance, public education and public health care.
Actually, if we can wipe out billions of ringgit worth of corruption, rent-seeking and patronage – which have flourished under the BN government – we will have more than enough money to provide free education right up to tertiary level. If not free education at tertiary level, at the very least nominal cost – just as we did in the 1960s and 1970s, before Mahathir implemented the corporatisation of universities and allowed private colleges to flourish. (They are now flourishing at the expense of students who are becoming more and more indebted via study loans). That way, students won’t have to land up in debt even before they find their first job. God knows they will need the money to find an affordable home, given the ridiculous prices in the property market.
We could also provide nominal cost health care in general hospitals – so people won’t have to buy nuts and bolts and screws, for instance, before they undergo surgery.
If there is one area that is ill advised among the Pakatan promises, it is the pledge to reduce car prices and tolls. Though this might be okay in the very short-term to provide temporary financial relief for long-suffering and financially strapped commuters who lack public transport options, the medium- and long-term vision should be to invest more in public transport and drastically reduce the use of private motor vehicles. The money raised from tolls and taxes on cars can be used to improve or subsidise public transport.
We don’t have much of a choice in this era of climate change and resource depletion.