KUALA LUMPUR: When Malaysian Prime Minister Anwar Ibrahim tables the government’s annual spending plan, Budget 2025, on Oct 18, he will do so from a position of strength.
Defying critics and sceptics, Mr Anwar seems to have fulfilled his basic promises of political stability, economic recovery, and renewed investor confidence.
By budget day, Mr Anwar would have been governing for 23 months as prime minister, longer than his immediate predecessors – Ismail Sabri (15 months), Muhyiddin Yassin (17 months), and his long-time rival Mahathir Mohamad (22 months in his second stint) – with an unchallenged two-thirds majority.
The budget session in the Malaysian parliament acts as a de facto economic state of the union address, and on this front, the economic indicators serve as the government’s tailwind.
Malaysia’s gross domestic product growth, stock market and currency performances have been at either historic highs or the best performing in ASEAN or Asia. A foreign direct investment boom, from global tech giants such as Oracle, Nvidia, Intel, and the hyperscalers, primarily in semiconductor and data centres, has attracted global attention.
Top analysts have backed Malaysia’s rising momentum, with some reports likening Malaysia to the next global chip giant entering its golden age.
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Malaysia generating enough energy surplus for big development projects and exports, PM says A FAVOURABLE TIME FOR ANWARMr Anwar’s political hand is also more favourable than before. His government’s bloc was able to retain all its incumbency in the year’s by-elections, which served as an indirect referendum on the government’s performance.
The two by-elections in the past two months have been particularly significant, as the government was able to flip a state seat of Nenggiri in the opposition’s stronghold state of Kelantan, and expand its majority by four times in Mahkota, both expanding its vote share among the Malay community, its most critical ethnic constituency.
The opposition faces fractures both within and between the parties in the coalition. Claims of non-cooperation between Bersatu and Parti Islam Se-Malaysia (PAS) have surfaced, with declining morale from defections and a by-election losing streak.
Both parties are also encountering a leadership catch-22, with senior leaders mired with health problems preventing effective stewardship, but stepping down would risk deeper party divisions.
This backdrop is important to understand the politics that will likely surface during the budget debate.
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Commentary: A mistake got ex-Malaysia PM Muhyiddin a sedition charge. Will it cost him a coalition? STICKY ISSUESFor this mid-term budget, Mr Anwar has hinted that he would double down by focusing on the twin objectives of raising the living standard and advancing the country’s development.
The opposition will likely embark on attacks focused on social issues, like the halal certification issue where a clear policy stance is still unavailable. With the privilege of being in the opposition, the Perikatan Nasional (PN) coalition could criticise the government for not doing enough to protect Muslims’ interests, while not taking a position that is both socially fair and commercially viable.
However, the problem with this approach is that social issues do not usually feature prominently in budget debates as it is seen as a forum for finance and economics.
The item that the opposition has largely still relied ongoal11, though with waning effectiveness as seen in the recent by-election, is cost of living. Although the inflation numbers – between 1.5 per cent to 2 per cent in 2024 – are at its most stable in five years, and significantly lower than the PN era under Mr Muhyiddin, the opposition will likely pounce on it because cost of living is a sticky issue.
Perikatan Nasional (PN) chairman Muhyiddin Yassin speaking at an event in Putrajaya on Feb 11, 2023. (Photo: Facebook/Muhyiddin Yassin)