Can Anwar survive the economic phase where Pak Lah and Najib falter?

Malaysia relied on expansionary spending during downturns such as the Asian Financial Crisis of 1997-99, recession that followed the Sub-Prime financial crisis of 2008, and Covid 19 Pandemic. Usually, it failed to do the necessary post-crisis fiscal consolidation, thus embedding fiscal deficits permanently. 

From a debt level of less than 30% of GDP, it has shot up to near 65% under Muhyiddin’s brief Langkah Sheraton PN-led administration in 2020. In addition to the rising debt, many countries are faced with a common situation of post-pandemic fiscal constraint of rising inflation, and shrinking current account balance yet the political narrative is too distanced from the increasingly disturbing economic realities. 

In advance economies faced with high debt situations, the political discourse is often dominated by short-term incentive than its long-term fiscal sustainability. For emerging economies such as Malaysia, fiscal tightening is politically painful that government tend to delay it until a major crisis forces some form of serious action. 

It was merely post-crisis fiscal consolidation undertaken by late Abdullah Badawi and Najib Razak but it led to them both to lose the premiership. So will Anwar Ibrahim face the same fate at the current post Covid 19 consolidation phase of the fragile Unity Government he led?  

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What is the motivation of US millitary action near Venuzuela?

On September 2nd, 2025, US millitary action on a vessel from Venuzuela killed 11 people claimed to be carrying illegal drugs. The US conducted at least three military attacks on vessels in international waters said to be carrying narcotics en route to the United States.

Venezuela strongly denied involvement in facilitating large-scale trafficking of narcotics to the US. 

Critics question the evidence for US claims, whether the Venezuelan state is complicit at a high level, and whether these strikes conform to international law especially when lethal force used in international waters without clear judicial process. Venezuela government accused US actions are false-flag operations. 

For an anti-drug operations push, the US moved warships, fighter jets (including F-35s), and other naval assets into the southern Caribbean and placed the operations under US Southern Command’s area of responsibility. 

International observers anticipate an invasion of Venuzuela combating drugs as merely another WAMD excuse for the real intention for oil. Historically, the US was behind the destabilisation and political turmoils of oil rich countries especially in the Middle East.

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Malaysia's fiscal predicament

Government announced MyKad and drivers' license will be used to limit subsidised Ron 95 petrol to 300 litre per month commencing September 30th. Beyond 300 litre, the petrol price will not be subsidised. 

Rafizi, who is in favour of targetted subsidy using the RM85 million spent PADU database, is obviously sceptical of MOF-preference for subsidy for all Malaysians. Naturally, there will be various issues raised, including 300 liter allocated as not enough. 

Be that as it may, cutting subsidy is one of the textbook options available to elevate fiscal deficit, which include high public debt-to-GDP ratio (64.6% for 2024 from about 30% in 2000s), over-reliance on petroleum revenue, limited tax base and increasing expenditure for public services.

Malaysia has an endemic fiscal history in which cycles of stimulus during crises, followed by consolidation could never fully achieve balance. It has structural challenges of subsidies, narrow revenue base, and commodity dependence made deficit a permanent feature. 

Growing the economy is another possible option, but historically, pro-cyclical nature of its economic sectors depended on expansionary policy to attain growth and it compromised fiscal consolidation. 

Only outstanding strong growth and political will could redress the fiscal deficit and put it high up on the national agenda. To do so, it needs policy innovation, economic leadership and relentless effort.

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Lesson from Indonesia for Malaysia

Economic insecurity means political danger

By Liew Chin Tong / theedgemalaysia.com

17 Sep 2025, 12:00 pm

The recent protests in Indonesia expose a serious socioeconomic root cause: millions of people work in the informal sector, especially as gig workers, and face low wages as well as the lack of opportunity in the formal sector.

And a day before a young Gojek rider Affan Kurniawan was killed during one of the Jakarta protests, the Malaysian Parliament passed the first-ever dedicated gig worker legislation.

The Gig Workers’ Bill 2025 mandates contribution to social security funds and creates a form of tribunal to handle the grievances of gig workers. Human Resources Minister Steven Sim and the Madani government deserve compliments for this pathbreaking action.

The consensus among Members of Parliament (MPs) is that the government should strengthen protections for gig workers while also expanding access to better-paying, stable jobs for all Malaysians beyond the gig economy.

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Bias allegation against DEI-claimed Sumitomo Malaysia

Donald Trump's "Liberation Day" tariff was meant to protect U.S. industry, punish foreign exporters, and raise revenue, but it was done without consideration to consumer welfare, livelihood of workers in the global supply chains, and sensitivity of low-income households to price increases. 

Reciprocal tariff severed international cooperation and goodwill by alienating allies and trading partners. As a result of the inhumane manner it was implemented, the tariff policy led to domestic cost burden, pushback on US businesses, retaliation from trading partners, legally and economically unenforceable, and risk of global isolation. 

This highlights the problem with trade or business that over-focus on narrow economic and business objectives without consideration for social, cultural and environmental expectations. 

For companies operating in a developing country and sensitised environment such as Malaysia, it need be aware of the national aspirations and extend beyond the mandated corporate governance. 

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Transforming Tabung Haji: Obviously Rashid Hussein not learned from his past

TH chairman Tan Sri Abdul Rashid Hussain outlined his vision for the institution's long-term financial sustainability with a proposed revision of the Tabung Haji Act 1995 (Act 535). [The details in the Business Times report reproduced at end of this posting.] 

He is suggesting reforms to align with TH's operation by strengthening its depositor base, improving cost-of-fund management, and regulatory safeguards for long-term investments. The gist of his transformation is to turn TH from a syariah-based savings institution into a full fledged Islamic investment company. 

Naturally it is appealing to bankers conversant with such terms as asset-liability mismatch, cost of fund and pursuit for "competitive" return. And there is a professor fascinated with digitalisation, and AI to the prospect of effectively investing in Bitcoins and Stablecoins. 

But it is not unique. 

Rashid is duplicating his rise and fall path as a former securities salesman from Singapore, who established RHB by the rapid growth of acquiring D&C and Kwong Yik Banks. 

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