Tuesday, September 16, 2008

Analysts: Leadership change needed to revive economy

By Debra Chong

KUALA LUMPUR, Sept 16 ~ Whether the Pakatan Rakyat forms a new government today is not the main issue at stake in trying to revive flagging economic growth.

Instead, market and political analysts believe any change of leadership will provide a fillip to the economy and boost investor confidence.

"In terms of qualification and intelligence, the most qualified person to become prime minister is Najib," an economist with a local investment bank who requested anonymity told The Malaysian Insider, referring to Deputy Prime Minister Datuk Seri Najib Razak.

"He has an economics background, and in terms of getting into and understanding issues, he is in a better state than the prime minister.-

The rising cost of living and the slowing down in economic growth have become a major issue affecting politics, with Prime Minister Abdullah Ahmad Badawi's government swiftly losing popularity due to high oil prices.

Opposition leader Datuk Seri Anwar Ibrahim's constant threats to topple the ruling Barisan Nasional government, and challenges from within Umno against Abdullah, have also undermined investor confidence.

Earlier this month, financial services group Credit Suisse told investors worldwide in a report to avoid buying stocks in Malaysia.

Credit Suisse pointed out that the power struggle between Anwar and the government was heightening risks to the Malaysian economy.

Tricia Yeoh, an economist attached to the Centre for Public Policy Studies, said Malaysia needed a leader to get rid of institutionalised weaknesses.

"The best leader is the leader who can get rid of corruption and one who can transform the economy in light of the current slowdown."

Another market analyst said Abdullah's reputation for "flip-flop'' - policy reversals - also did not inspire confidence.

"This kind of flip-flop does not bode well for investors with regards to strategies," he said.

The only thing that appears certain at this point is that Abdullah is no longer seen as a viable candidate to remain as prime minister for much longer.

Said Dr Ooi Kee Beng, political analyst with the Singapore-based Institute of South-East Asian Studies (Iseas): "Where Abdullah is concerned, he should retire. He was given the mandate five years ago and he failed."

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