Cabinet Shuffle

Malaysia

Economic News

22 Jul 2010
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On March 18, 2008, 10 days after Malaysia's ruling party Barisan Nasional's lowest election victory margin since the country's independence, Prime Minister Abdullah Ahmad Badawi unveiled a major overhaul in the composition and size of the nation's cabinet.



The surprising election results are widely seen as a change from the politics of old, and observers have interpreted Abdullah's decision to retain only half the ministers from the previous administration and appoint 16 newcomers to ministerial posts as an indication that change is afoot.



At a press conference announcing the new line-up, Abdullah said, "More than half of the cabinet ministers are new faces and I hope they can serve the people more effectively and bring a fresh approach to the country's administration."



The previous cabinet consisted of 90 members, a number many considered excessive for a country with a population of 27m. The new cabinet has been streamlined to 68 members, with Abdullah abolishing the post of parliamentary secretaries. There is also speculation that some ministries may be merged to encourage further efficiency and reduce red tape.



Markets have responded positively to the strategy of mixing new appointees with retaining experienced ministers. Abdullah, for example, will continue to hold his position as minister of finance, while Nor Mohamed Yakcop has been re-appointed as second finance minister, a signal to the local and international business communities that there will be continuity in economic policies.



Another move that has excited the business segment is the appointment of two well-respected technocrats, who are not known for political histories or strong leanings on critical positions. Mohd Zaid Ibrahim, founder of the country's largest legal firm, has been appointed as law minister. Amirsham Abdul Aziz, the recently retired chief executive of Malayan Banking (Maybank), has been appointed as head of the Economic Planning Unit, a government division that proposes development projects and assesses their effectiveness.



Malaysia's judiciary has come under scrutiny in recent years for what critics have called a system lacking transparency, and for cozying up too closely with politicians. Zaid Ibrahim, who has built his reputation on openly attacking judiciary abuse and deficiencies in social policy, has said he will use his appointment to restore public confidence in the judicial system.



"The Prime Minister spoke to me and he told me there is a need for justice, a reform of judiciary and to make sure that the rule of law stays. I understood that and I promise him that I will do that," Zaid Ibrahim told local media following the acceptance of his appointment.



Wong Sai Fong, managing partner of law firm Shearn Delamore & Co, expressed his support of the appointment. "As lawyers, we want a law minister who not only understands the perspective of practitioners of the law, but who is bold enough speak up on legal matters and shortcomings affecting the smallest individuals to the largest multinationals," he told OBG. "Zaid seems to fit the bill."



Of those vacating their ministerial posts, the most high profile is Rafidah Aziz, who has been the minister of trade and industry since 1987. Rafidah is credited for helming Malaysia's industrial growth over the past two decades and is responsible for initiating free trade talks with the US, Japan and Pakistan. Muhyiddin Yassin, formerly the minister of agriculture, will take over the position and has said he will continue to pursue bilateral trade agreements and will carry on Rafidah's work in opening up the economy to foreign investment.



For a country divided into three main ethnic groups, power sharing in government has always been central to the country's political stability. The new cabinet includes 19 positions occupied by ethnic Chinese and Indians. Sami Vellu, the minister of works and president of the Malaysian Indian Congress, who was for 29 years the sole serving ethnic Indian minister, lost his parliamentary seat in the elections. However, it is hoped that the appointment of S Subramaniam, a vocal leader in the Indian community, as minister of human resources, as well as three other ethnic Indians as deputy ministers, will lend a greater voice to a community where some have reported feelings of marginalisation in recent years.



Overall, the drastic reshuffle in the composition of the parliament is boosting confidence in the business community and is seen as an indication that the government is recognising the need for, not to mention instituting, political reforms. Signalling another change, at the cabinet unveiling, Abdullah announced that all ministers would now be required to publicly disclose their assets, a further step towards enhancing the public's perception of greater transparency and integrity in the government.

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