By Khairie Hisyam
After a turbulent 2015 on many fronts, here comes 2016. So what key issues should the average Malaysian watch out for this year? In no particular order and by no means an exhaustive examination, KINIBIZ lists four big question marks to follow.
Last year had been quite a year for the average Malaysian, especially but not limited to sharply rising living costs. Prices of various things surged left, right and centre, not only from the ripples following the implementation of the goods and services tax from April 2015 onwards but also from the removal of various subsidies and approved increases for highway concessionaires and so on.
On other fronts Malaysians have also had to contend with unresolved issues of governance such as the unsatisfactorily explained donation of RM2.6 billion in total that reportedly went to the prime minister’s personal bank accounts in 2015, among other controversies.
This year hasn’t been much better, although we are only less than a week in. So what are the key issues to watch out for this year in hopes of a satisfactory conclusion in the end? That list is a very long one so KINIBIZ picks out four major things to keep in mind as we brave another year in Malaysia.
1. Will Malaysia sign into the Trans-Pacific Partnership (TPP) deal?
This is likely the first question answered one way or another as there will be a special two-day session in Parliament to debate the matter in end-January, according to International Trade and Industry Minister Mustapa Mohamed just before Christmas.
Malaysia has been part of ongoing negotiations for the last five of the total 10 years up to the finalisation of the text in end-2015. Some of our neighbours such as Thailand, Indonesia and the Philippines are keen on possibly joining too despite not being involved in prior talks.
At stake is what Malaysia stands to gain – or lose out on, if it chooses not to participate – from a deal that may redefine the global trade landscape. If all 12 negotiating nations ratify the agreement, TPP is expected to free up commerce in about 40% of the world’s economy.
This means that whichever way Malaysia chooses to go vis-a-vis TPP – although realistically the nation would probably say yes in the end – the trade landscape for the country will never be the same again.
2. Who will be the next Bank Negara Malaysia governor?
By end-April this year, Zeti Akhtar Aziz will retire at the end of her current term as Bank Negara Malaysia governor. This marks an end to a 15-year (more or less) spell at the helm of the central bank for Zeti, who in that time has gained global respect for her expertise and ethics.
Zeti Akhtar Aziz
One way or another, a new person at the helm will mark the end of an era, of sorts. Over more than 15 years at the helm, Zeti had been credited with a number of achievements including leading Bank Negara to a position of greater integrity in the aftermath of the Asian Financial Crisis in end-1990s. These shoes are hard to fill although a number of names have cropped up – Zeti has said there are succession plans internally too.
Unless Zeti springs a surprise by extending her tenure further, possibly in the interests of national service, the spotlight will firmly be on whoever is chosen to succeed Zeti in this crucial role. That person’s early days in office will be closely watched for any hints of character traits and tendencies which may indicate the tone of the next era for Bank Negara.
3. Will the 1MDB saga be resolved satisfactorily?
Year 2015 was the year when all hell broke loose for controversial 1Malaysia Development Bhd (1MDB) after several years of simmering questions on its decision making and growing debts. Exacerbating matters were coverage by Sarawak Report and The Edge using leaked information from Xavier Justo, a former staff of 1MDB business partner PetroSaudi International.
Arul Kanda
By Dec 31, 2015, however, new chief Arul Kanda seemed to have come close to resolving the debtpile problem, having orchestrated three major deals that will shave 1MDB’s debts by RM40.4 billion, according to the prime minister as reported by Bloomberg last week. This would nearly wipe out 1MDB’s total debt of RM46 billion, he said.
Debt and borrowings aside, however, it remains to be seen how governance issues dating back as far as 2009 will be addressed – if ever. These range from questionable decision-making that led to billions of ringgit in losses through bond mispricing to dodgy ventures overseas that raise questions on their opacity and lack of accountability.
If Arul has managed to figure out how to put out the 1MDB fire, will Malaysians then find out this year who started the fire in the first place and why?
4. Will global oil prices wreak havoc with our budget?
In end-October 2015, the prime minister tabled Budget 2016, where government revenue was expected to be at RM225.7 billion against expected expenditure of RM215.2 billion. Some 14.1% of this total revenue is expected to be from oil and gas contributions – however the budget was drawn up with global oil prices projected at US$48 per barrel.
The outlook for global oil prices at this stage remain shaky, with some analysts expecting a further dip that may even touch the US$20 per barrel territory. How will further dips from US$48 per barrel impact the government’s finances? Remarks from cabinet members have so far been inconclusive.
Minister Abdul Wahid Omar said in mid-December that Budget 2016 will be reviewed if the lows represent the new normal for global oil prices, while Deputy Finance Minister Abdul Johari Abdul Ghani said end-December that there are no reviews for now.
With global oil prices hovering just below the US$40 per barrel at the time of writing, question marks hang on whether the government will review Budget 2016 and, if it does, what adjustments would be made in terms of possible cuts. In turn eyes will be closely watching on who will feel the brunt of a possible budget cut if oil prices remain low.
GRRRRR!!!
You must be logged in to post a comment.