The Madani Economic Framework, launched with the ambition of revitalizing Malaysia’s economy, has shown promising improvements in several areas. However, experts and consumer groups argue that significant systemic issues must be addressed to achieve long-term, tangible results. As Prime Minister Datuk Seri Anwar Ibrahim prepares to present the Madani Economy report, stakeholders are keenly watching to see how the government plans to navigate the complex economic landscape.
Improvements in Malaysia’s Macroeconomic Environment
Economist and policy specialist Geoffrey Williams acknowledges the positive strides made under the Madani Economic Framework. The framework has been instrumental in stabilizing Malaysia’s macroeconomic environment, with inflation returning to normal levels, interest rates finding stability, and the ringgit showing signs of strengthening. Economic growth has continued, albeit at a moderate pace, suggesting that the framework is on the right track.
“In terms of the overall fiscal position, the increased spending is conservative; there is an emphasis on cutting wastage, leakages and corruption, especially through diesel rationalisation, and the deficit is likely to be reduced,” Williams said. These efforts to streamline spending and reduce corruption are crucial steps towards a more robust economy.
Pending Policy Initiatives: A Need for Urgency
Despite these positive developments, Williams points out that several key policy initiatives under the framework remain in the pipeline. Among these is the effective rollout of the Central Database Hub (Padu), designed to better target social assistance. The finalization of the Progressive Wage Policy, which aims to address wage stagnation and income inequality, is another crucial piece of the puzzle.
Williams stresses the importance of prioritizing other pending initiatives, such as pensions reform, addressing the underemployment of two million people, tackling the potential higher education funding crisis, and reforming taxes and spending. These are deep-rooted issues that require immediate attention to ensure the long-term success of the framework.
Early Days for the Madani Economic Framework
Carmelo Ferlito, CEO of the Centre for Market Education (CME), agrees that it is still too early to fully evaluate the impact of the Madani Economic Framework. However, he notes that one of the most significant initiatives so far has been the subsidy rationalization. The real test of this initiative’s effectiveness, Ferlito argues, will come when it is applied to essential goods like RON95 petrol.
“Despite some good points in the Madani Economic Framework or the industrial plan, I think there is still a long path to build a truly business-friendly environment, with a pro-market approach,” Ferlito said. He also highlights areas where the framework falls short, particularly in rationalizing government spending, reforming government-linked companies (GLCs), and harmonizing the tax system. Initiatives like e-invoices, while well-intentioned, have been criticized as burdensome for small businesses, raising questions about their overall efficacy.
Consumer Perspectives: Addressing Structural and Systemic Issues
From a consumer perspective, the Federation of Malaysian Consumers Associations (Fomca) shares a cautious optimism about the framework’s potential. Datuk Indrani Thuraisingham, Fomca’s vice-president and legal adviser, notes that while the Madani Economic Framework has initiated important reforms, the deep-rooted structural and systemic issues it seeks to address will take time to resolve.
“This is because we are tackling structural and systemic issues that have been ongoing for quite some time. We won’t see immediate positive results,” she said, emphasizing the need for patience and persistent effort. Indrani points to the management of public spending and the high cost of living as areas that require more effective solutions.
Indrani also underscores the importance of enhancing enforcement and monitoring policies to ensure that targeted groups genuinely benefit from government programs. “Having a report card is a good start, but more can be done to keep the momentum going, specifically in providing services to the public,” she said. Issues like the rising cost of living, transportation, and healthcare are of particular concern to the rakyat and need to be addressed more effectively.
The Road Ahead: Collaboration and Cross-Cutting Reforms
One of the critical challenges facing the Madani Economic Framework is ensuring that its initiatives do not overlap or conflict with existing programs at both the federal and state levels. Indrani highlights the need for better cross-collaboration between these levels of government to streamline efforts and improve outcomes for the rakyat.
“If the Madani government can ensure better cross collaborations, things will be better for the rakyat,” she said. The framework’s success will depend largely on its ability to foster such collaborations and to implement reforms that are both comprehensive and inclusive.
Conclusion: A Framework with Potential, But Challenges Remain
As the Madani Economic Framework progresses, it is clear that while some positive strides have been made, much work remains to be done. The framework has laid a solid foundation for economic recovery and growth, but it must now address deeper structural issues to ensure long-term success. As Prime Minister Anwar Ibrahim presents the latest updates, the nation will be watching closely to see how these challenges are addressed and what steps will be taken to ensure that the framework delivers on its promises.
In the coming months and years, the effectiveness of the Madani Economic Framework will be tested by its ability to implement necessary reforms, manage public expectations, and foster a business environment that is both dynamic and inclusive. Only time will tell if it can rise to the challenge and truly transform Malaysia’s economic landscape.
