Malaysia cannot address the financial plight faced by workers and businesses and recover quickly from the current economic recession, when a stubborn Prime Minister Mahiaddin Md Yassin serving his own selfish political interest, is willing to spark off a constitutional crisis by deceiving the King and using the Executive to confront the constitutional monarchy. Amongst the 3 branches of government in the Federal Constitution, Parliament comprising the King, Dewan Rakyat and the Senate is clearly supreme over the Executive and the Judiciary.
The Prime Minister on behalf of Cabinet had delivered a defiant, unrepentant and even rebellious statement in response to the unprecedented stern royal disapproval and stinging royal rebuke of the Cabinet by the King. Clearly, the Prime Minister and Cabinet are digging in against the constitutional monarch in a battle of wills to demonstrate that the Executive is supreme.
This constitutional crisis is unnecessary when it is clear that the Prime Minister is wrong and must resign for refusing to accept the supremacy of Parliament. Revoking Emergency Ordinances without royal assent and refusing to put up Emergency Ordinances for debate and vote in Parliament initially to approve and then to annul it, is clearly contempt for the Federal Constitution built on the foundation of the supremacy for Parliament.
Apart from the damage to public confidence engendered by this constitutional crisis, a quick recovery from the current economic recession appears remote. 2020 was a year of missed economic targets when Malaysia suffered a budget deficit of 6.2% of the GDP as compared to the initial projection of 6%, unemployment rate at 4.5% compared to the projected 4.2% and GDP growth at (-5.6%) compared to the projected (-5.5%). With continued incompetence, political instability, constitutional crisis and the surge in the COVID-19 pandemic, Malaysia’s economic targets projected under Budget 2021 is likely to be a repeat of the missed targets of 2020.
For 2021, the budget deficit will not be scaled back to 5.4% as projected but likely increase to 7%. The unemployment rate will not be reduced to 3.5% but likely to increase to 5%. GDP growth is likely to be scaled down from the overly optimistic Budget 2021 projections of up to 7.5% to an anaemic 4% despite 8 economic stimulus packages of RM530 billion and the RM322.5 billion 2021 Budget, the largest in history. In other words, our economy will not be normalized by the end of 2021 and will still be smaller than the end of 2019, the last year that PH was in power.
The contraction of the economy of 5.6% in 2020 has hit the ordinary worker and small businesses, particularly small and medium enterprises’ (SMEs), much harder. SME contribution to the gross domestic product (GDP) contracted by 7.3 % in 2020 according to the Department of Statistics Malaysia (DOSM). This 7.3% decline is much higher than the decline of non-SMEs GDP which registered negative 4.6% in 2020. This was the first time the SMEs contribution to GDP was lower than Malaysia’s GDP and non-SMEs GDP since 2004.
When SMEs fail, unemployment at 4.5% now will only rise. A survey by the Ministry of Entrepreneur Development and Co-operatives on June 4 reported that more than 90% of micro, small and medium enterprises (MSMEs) risked closure. The SME Association of Malaysia disclosed that 100,000 SMEs closed last year and 50,000 more are expected to suffer the same fate from the current total lockdown.
A distracted Prime Minister fighting for his political survival and in the middle of a constitutional crisis confronting the King has neither ability nor interest to ensure the survival and sustainability of the nearly 1 million SMEs comprising 98.5% of all business establishments employing 7.3 million Malaysians in 2020, constituting 48.0 % of the national employment.
Why is the government confident that the RM 530 billion economic stimulus packages and RM322.5 billion 2021 Budget can save all the 1 million SMEs comprising nearly 98.5% of all business establishments in Malaysia when nothing has worked so far?