Malaysia PM Anwar names himself finance minister to gain investor confidence

MALAYSIA Prime Minister Anwar Ibrahim appointed himself as finance minister as he looks to help sustain a fragile post-pandemic recovery with the economy bracing for a slowdown next year.

In taking the most crucial ministry, Anwar, 75, is looking to shore up power after he was picked as premier by the King last month following the country’s first-ever hung Parliament that led to days of political deadlock.

“I want to begin a new approach” and give local traders and foreign investors confidence in the economy, Anwar told reporters after announcing the Cabinet line-up on Friday (Dec 2) evening.

Anwar’s immediate challenge will be to present a budget to steer the economy through the pressures of lingering inflation, a weak currency and an unfavourable global economic environment. A reformist who heads a multiracial coalition, Anwar has made protecting low and middle-income groups from rising prices the top priority of his administration.

His government will face “public pressure to use subsidies to contain the rising cost of living,” which will be an obstacle to fiscal consolidation, Fitch Ratings analysts led by Kathleen Chen wrote in a note. 

Malaysia’s economic growth is projected to slow to 4 per cent-5 per cent in 2023 from an estimate of more than 7 per cent this year, according to the country’s central bank.

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That would come after a rapid, reopening-driven rebound in 2022, which saw gross domestic product jump by 14.2 per cent in the July-September quarter from a year earlier, the fastest pace in more than a year.

The anticipated slowdown may prompt Anwar’s government to continue with subsidies that are projected to a reach a record US$18 billion in 2022, delaying its plan to reduce the budget deficit and rein in public debt.

Anwar also named Umno leader Ahmad Zahid Hamidi and Gabungan Parti Sarawak’s Fadillah Yusof as co-deputy prime ministers.

The leaner Cabinet is made up of 25 ministers, with appointments distributed among the top leaders of the parties making up his unity government. Among them, Tengku Zafrul Aziz will be International Trade and Industry Minister. Anthony Loke will be the new Transport Minister and Dr Zaliha Mustafa will helm the health ministry.

Anwar said he had an audience with the King earlier on Friday and discussed the need to form a cabinet immediately. “Many are qualified but there is a limit because we don’t want too many ministers or special envoys so that we can save money and use it on the people,” Anwar said in a speech at an event in Perak, repeating his aim to keep the Cabinet streamlined. 

He had been in talks with several coalitions including parties in his PH alliance on deciding who gets ministerial portfolios. The Cabinet lineup will show what sort of compromises he would have to make to keep his unity government afloat, ahead of a confidence vote on Dec 19. 

Anwar said that his administration would focus on the economy and address issues such as inflation and unemployment. After the cabinet is formed, “I will have a special meeting with them on Monday to set a few ground rules immediately,” he said.

Investors have cheered his appointment, hoping Anwar would bring stability after political uncertainty that saw three prime ministers in as many years. REUTERS, BLOOMBERG