Can the economy win GE16 for Anwar?

Political manoeuvres among his allies, a divided opposition and a worsening economic outlook makes a snap election based on a strong economic agenda the best option for Anwar Ibrahim.

While the constitutional deadline for the 16th general election (GE16) is still way off, talk of a snap election is growing.

For Prime Minister Anwar Ibrahim, the question is whether he can leverage the current strong economic performance to secure a fresh mandate before the economic environment starts to work against him.

To understand why the economy is Anwar’s best weapon, we must look at the highly volatile political terrain.

Pakatan Harapan (PH) is facing a sober reality, it is almost universally projected to lose seats in the upcoming election.

Compounding this vulnerability is the recent high-profile exit of two leading former ministers, Rafizi Ramli and Nik Nazmi Nik Ahmad, who defected from PKR to take over the dormant Parti Bersama Malaysia.

Concurrently, Barisan Nasional (BN) has made it clear that it will not fight GE16 under the Madani banner.

Instead, BN is aggressively positioning itself to contest on its own terms, welcoming back previously expelled members into the fold to consolidate its traditional Malay base.

Yet, the opposition is in no better shape. Perikatan Nasional (PN) is split by internal divisions, made worse by the recent suspension and expulsion of senior members.

Meanwhile, the newly rebooted Parti Bersama Malaysia is nowhere near organised enough for a nationwide campaign.

Tactically, Anwar must not give this fledgling opposition fourth-force time to formulate a cohesive strategy or build its electoral machinery.

From a macroeconomic standpoint, now is as good a time as any for Anwar to dissolve parliament.

The current data provides a stellar report card. Economic growth is very strong and outperforming economic forecasts with 5.2% for last year and 5.4% for the first quarter of this year.

Inflation is elevated but remains controlled and unemployment is at its lowest levels in a decade, with a growing number of people successfully securing jobs.

This good news will not last forever. Strong economic headwinds are brewing for the second half of the year, driven by worsening global uncertainties, supply chain disruptions and volatile commodity prices.

More urgently, Malaysia’s exploding subsidy bill is squeezing fiscal flexibility.

With the government fiercely committed to reducing the fiscal deficit to 3.5%, the room for traditional, large-scale “election goodies” is virtually non-existent.

Waiting until late 2026 or beyond risks catching the administration in a fiscal crunch amidst a global slowdown. Strike now, while the numbers look good.

To translate temporary economic wins into a permanent legacy, Anwar must provide a plan to push the structural reforms detailed in my FMT mini-series, “Creating Anwar’s Legacy”.

This must include universal social protection with a universal basic income to replace fragmented welfare packages.

Rafizi has already announced this and Anwar must match it.

Temporary visual solutions like early EPF withdrawals for private healthcare insurance create a long-term savings deficit for retirement. Instead, there must be a structural overhaul in public health financing.

He must end “Gomenshud” to scale back state-made market distortions, reduce interference, cut red tape and allow private enterprises to drive growth.

Tax and subsidy reform toward new tax structures including an electronic payments tax (EPT) rather than relying on old-style SST/GST taxes.

Reform of state assets can fund a Malaysia SuperFund to finance a non-contributory basic pension.

Free tertiary education inspired by Sarawak can transform human capital development across Malaysia.

The current crop of positive economic data mapped into a serious, uncompromising economic reform agenda, gives Anwar Ibrahim his strongest possible foundation.

By going to the polls in a matter of months with a strong economic agenda, he can catch a divided opposition off-guard and secure the mandate to fully realise his vision for Malaysia.

The views expressed are those of the writer and do not necessarily reflect those of FMT.