IDEAS and CME: Where Did the Policy Debate Go?
WEDNESDAY 27 APRIL 2022: The Institute for Democracy and Economic Affairs (IDEAS) and the Center for Market Education (CME) express concerns over the limited debate surrounding issues of political economy and the long-term consequences of implemented policies.
IDEAS and CME observe that a positive and vibrant discussion is ongoing on the future general elections (GE15), party leaderships and the relationship between the ruling coalition and the opposition (Memorandum of Understanding). However, policy decisions affecting the lives of the rakyat both in the short and long run are being made without the emergence of a proper and healthy debate both within the ruling and opposition coalitions.
The CEOs of the two think tanks, Tricia Yeoh and Carmelo Ferlito, wish to bring to public attention the following economic policy decisions that have been recently taken, announced and implemented without proper debate and without a sober reflection on the long-term potential negative unintended consequences.
Some of the main economic policy decisions that have been taken without serious public discourse include the new EPF withdrawal that has depleted RM40b of EPF funds in an instant, putting at risk the future financial stability and retirement of poorer households. Second, the shoddy management of MySejahtera, which has placed a massive amount of data in the hands of government that can be potentially misused and that has therefore further lowered public trust in government institutions. Third, the chicken price ceiling, which may have a negative incentive towards supply. Other recent economic policy decisions are the RTK test price ceiling and minimum wage revision; all of the above policies require meaningful public debate and rigorous engagement with the relevant stakeholders. We urge the return of policy debate that we believe crucial to key economic decision-making processes in the immediate future.
The aim of the current statement, however, is not to take a position on the above mentioned issues, but to stress how these important decisions cannot be made in the context of an emergency and without a proper debate. By always acting in response to an emergency, structural reforms are not addressed; furthermore, avoiding a reflection on the long-term unintended consequences means compromising Malaysia’s growth path and shifting the costs of these decisions to future generations.
In conclusion, IDEAS and CME invite all the political parties to increase their level of engagement with economic policy decisions so that better choices for the welfare of the rakyat can be taken and the economic growth process can be placed on solid foundations.
About CME: The Center for Market Education (CME) is a boutique think-tank based in Kuala Lumpur, Malaysia. As an academic and educational institution, CME aims to promote a more pluralistic and multidisciplinary approach to economics and to spread the knowledge of a sounder economics, grounded in the understanding of market forces. In order to do so, CME is not only involved in academic initiatives, but it organizes seminars, webinars and tailor-made economics classes for students, journalists, businesspeople and professionals who wish to better understand the relevance of economics for their daily lives and activities. Economics matters and needs to be presented in a fashion in which the link with reality is clearly visible. In this sense, we look not only at theoretical economics but also at policy making, with an emphasis on the unintended consequences generated by political actions.