The importance of political stability and why it matters.

Pakatan Harapan (“HARAPAN”) is known as the Alliance of Hope for Malaysia.

In 2015, the Pakatan Rakyat coalition was replaced by the political centre-left alliance HARAPAN, initially led by Dr Mahathir Mohamad (“Dr Mahathir”).

HARAPAN’s victory in the Malaysian general election in 2018 overthrew the 60-year-old Barisan Nasional coalition government.

Among the activists in Singapore to celebrate their victory were Kirsten Han, Jolovan Wham, Thum Ping Tjin, better known as “PJ Thum,” Sonny Liew, and poet-playwright Alfian Sa’at.

In 2018, PJ Thum and friends met privately with Dr Mahathir, pleading with him to bring democracy to Singapore. PJ Thum considers Singapore to be a part of Malaya.

Dr Mahathir, however, rejected their invitation.

The Dr Mahathir-led Pakatan Harapan coalition government has yet to bring hope to Malaysians. Barely two years after its victory, it seems to have lost its power in 2020.

After the 2022 Malaysian General Elections, Dr Mahathir lost the election, his deposit, and all credibility.

Malaysian politics have been filled with drama and u-turns since the Dr Mahathir-led Pakatan Harapan won its election in 2018.

The recent election results days ago have also resulted in a hung parliament for the first time in Malaysian history since no party has won an absolute majority to form a government.

The election results saw Malaysia’s stock market and currency dip. The ringgit fell almost 0.8 per cent against the US dollar in early trading on Monday (21 November) before recovering from being down 0.1 per cent. Kuala Lumpur’s benchmark index fell as much as 1.5 per cent.

Political Stability

I strongly believe in the importance of political stability. If something like this were to happen in Singapore, I could not imagine our economy’s consequences and potential downfall.

Recently, a representative from the main opposition party in Singapore said in an interview that if Singapore reached the same stage as Malaysia, Singaporeans would exercise their democratic rights and trust that things would work out.

In other words, she is saying that come what may, and things will always turn out alright just because of democracy.

Such a view is naive and simplistic, and misleading.

Large countries can survive a messy state of affairs because there are resources to sell for money, and a domestic economy to keep some activities running.

For Singapore, it is different. Unfortunately, Singapore’s success as a country has blinded many people to its small size and absence of natural resources. To give some perspective, Lake Toba in Sumatra is 1000 sq km bigger than Singapore.

The Perils of Political Instability and Uncertainty

Key to Singapore’s success is political stability that has created an environment attractive to foreign investors looking for a stable place to grow their business.

Economists regard political instability as a severe malaise harmful to economic performance.

That is because it shortens policymakers’ horizons leading to suboptimal short-term macroeconomic policies.

Frequent switching of policies creates volatility. Thus, in turn, it affects macroeconomic performance.

While businesses operate according to forecasts and scenarios about the future that comprise surprises and certainties, the one thing they hate is the instability in the macro environment.

Hence why emerging markets in Asia and Africa either attract or repel foreign investors.

What should political parties in Singapore do?

Political parties in Singapore looking to unseat the PAP Government should not try to deceive voters with the assurance that democracy and somehow the right to cast their votes at the ballot box will take care of political instability.

It is dishonest because it is the exercise of their democratic rights at the ballot box that led to the political instability we now see in Malaysia. Of course, Malaysian politicians had a big part to play in how Malaysians eventually cast their votes.

To defeat the PAP Government, opposition parties need to convince Singaporeans about how they will govern better and how their policies will improve Singaporeans’ lives and their children.

How they intend to attract foreign investment to create jobs for Singaporeans, how they plan to calibrate manpower requirements, etc.

In other words, they should lay their cards open on the table for Singaporeans to see and try to win with a clear majority to form the next government instead of telling Singaporeans that their democratic rights will take care of political instability.

Contrary to what the leader from the main opposition party said, voters’ trust is not in their democratic right to cast their votes but in the party that will take them forward.

They must trust that the party they vote for can lead them to a bright future.

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