Tun Dr Mahathir Mohamad announced at a press conference today that he expects to be sworn in as prime minister by the Yang Di Pertuan Agong by 5pm today. He said he has with him letters signed by the four parties of the Pakatan Harapan coalition supporting him as the Prime Minister (updates to follow). Answering reporters’ questions on the Sales and Services Tax (GST), Tun Mahathir said the tax would be abolished.
In Singapore, Prime Minister Lee Hsien Loong said the republic looks forward to developing an “equally constructive relationship” with the next Malaysian leadership. “As Malaysia’s closest neighbour, we have a vested interest in Malaysia’s stability and prosperity,” Mr Lee wrote in a Facebook post. Tun Mahathir Mohamed, 92, on Wednesday led his Pakatan Harapan coalition to a stunning victory, toppling the 61-year rule of the Barisan Nasional. Official results showed that Pakatan Harapan won 121 of parliament’s 222 seats, clinching the simple majority required to rule. The Barisan Nasional had 79.
Meanwhile, experts said Pakatan Harapan’s victory in the 14th General Election will not disrupt Malaysia’s growth as the country’s strong economic fundamentals are intact and will be able to cushion any possible knee-jerk reaction. They believe that any jolt to the stock or foreign exchange markets would only be temporary.
In an related development, Moody’s Investors Service said Pakatan Harapan’s win in parliamentary elections marks uncharted territory for Malaysia, as the country has never witnessed a transition of power away from the Barisan Nasional since independence in 1957. In a statement, Anushka Shah, Vice-President, Senior Analyst, Sovereign Risk Group, Moody’s Investors Service said little is known about the opposition’s full range of economic policies, and electoral pledges lacked details that would allow for a fuller assessment of the budgetary and macroeconomic impact. “Some campaign promises, if implemented without any other adjustments, would be credit negative for Malaysia’s sovereign. “These include a proposed abolishment of the Goods and Service Tax or GST, which, without offsetting measures, would increase Malaysia’s reliance on oil-related revenue and in the near term at least, narrow the government’s revenue base,” she added. Anushka said another policy pledge, the reintroduction of fuel subsidies, would also distort market-determined price mechanisms, with an effect on both the fiscal position and balance of payments.
In Kuching, the Sarawak state government has announced that May 17 and May 18 will be declared as additional public holidays. A statement released by the Sarawak Chief Minister’s Office said the additional public holidays were declared under Section 5 of the Public Holidays Ordinance. As such, the public are advised that today (May 10) and tomorrow (May 11) are normal working days in Sarawak. Malaysia’s Chief Secretary to the Government (KSN), Ali Hamsa early today had announced that May 10 and May 11 were declared additional public holidays for the whole country in conjunction with the 14th General Election (GE14). For east Malaysian states of Sabah and Sarawak, the state governments must declare additional public holidays on those dates according to their respective Public Holidays Ordinance, he said.