WHAT are the issues? It’s a long list but there are three major ones. As an ex-finance minister, I want to tell you what the impact of these issues are.

First of all, I have to touch on succession. It is fundamental. Without it, there is uncertainty in the market.

Prime Minister Tun Dr Mahathir Mohamad is 94 years old, and people are not sure who the next leader will be. The supposed 

premier-in-waiting, Datuk Seri Anwar Ibrahim, is not sure as well. He is fighting and is at loggerheads with Datuk Seri Mohamed Azmin Ali, the minister of economic affairs and deputy president of Parti Keadilan Rakyat, which is part of the ruling Pakatan Harapan government. In a nutshell, everyone is fighting.

There is a lot of uncertainty. There are too many political voices out there and this has resulted in the business environment being no longer conducive, especially for foreign investors. In this kind of environment, they will adopt a wait-and-see attitude. This is not good for our economy.

Second, economic policies. There seems to be a lot of flip-flopping. For example, the acquisition of certain toll concessions and highways may increase government debt. This is inconsistent with the government’s agenda to reduce direct debt.

Another example is the stalling of large infrastructure projects, which, after a while, were revived. Investors who bought into the companies — thinking they would be undertaking the awarded contracts and, as a result, receive steady profits in the coming years — would have sold their shares after the stop-work orders were issued, thinking the contracts had been cancelled. But then, they are re-awarded. This is one of the impacts, people suffer losses.

Also an issue are the drastic changes made to the tax system. The big change was the replacing of the Goods and Services Tax (GST), which gave us a good chunk of our revenue, with the Sales and Service Tax (SST). After which, there was a need to create smaller taxes — digital tax, sugar tax.

All the new taxes being introduced were very badly timed — when things are tough for the rakyat, sugar tax and what not were implemented.

All these factors have led to a diminishing level of confidence on the part of investors as well.

My third point is the lack of clarity in the decision-making process. The feedback that I have received from those in the business community is that they are confused as to who makes the decisions at the government level. Is it the Ministry of Economic Affairs, the Ministry of Finance, the Prime Minister’s Office or Council of Eminent Persons (CEP)?

Even though the CEP has been abolished, many in the business community believe it still exists. Even some of those in the management of government-linked companies (GLC) that I meet still think the CEP is calling the shots and still has a lot of influence.

This whole set-up is confusing.

To add to this, we have inexperienced ministers who are unable to work with senior government servants to execute government policies. There are fights between ministers and chief secretaries (ketua setiausaha). They seem to contradict one another.

The impacts are threefold. First, long-term investors in the country will have less confidence to deploy their investments because of the wait-and-see attitude.

Our competitiveness in the region is becoming a concern. The net outflow of funds for the past 18 months amounts to more than RM20 billion. This is a lot.

Second, the issues mentioned above will slow down the potential economic growth of the country. There are no leads in the capital markets, there is nothing to shout about. 

Bursa Malaysia has dropped, from 1,800 points to below 1,600 points.

Loan growth is slowing down, the property market is declining, certain sectors are dead, many contractors under the PR1MA housing scheme have not been paid — all these have adversely impacted the economy.

Third, over time, these issues will increase unemployment in the country, increase the cost of living and inevitably reduce the rakyat’s spending power.

If this goes on, the market will continue to go down and at some point, it will become very cheap, then too cheap — only then will investors start coming in. But, basically, we will have to restart our engine to get back up.

On a scale of 1 to 10, the Pakatan Harapan government has performed below par in certain sectors — the economy, development, policy, focus and so on. But in terms of governance, it is better. Maybe it has learnt from past mistakes.

Datuk Johari Abdul Ghani was Titiwangsa MP and former Minister of Finance II. He is chairman in CI Holdings Bhd and has a 32.72% stake in the company and is a chairman of KUB Malaysia Bhd and has 32% in the company.