The BGA Malaysia Team, led by Managing Director Hazree Mohd Turee, wrote an update to clients on Malaysia’s latest Cabinet reshuffle.

Context

  • Malaysian Prime Minister Anwar Ibrahim announced a Cabinet reshuffle December 12, just a year after winning the general election in November 2022. The reshuffle was long expected after former Minister of Domestic Trade and Cost of Living Salahuddin Ayub died in July and takes place ahead of the January 31, 2024, inauguration of the new king, Sultan Ibrahim of Johor.
  • The Cabinet reshuffle seeks to shore up Anwar’s flagging public support. The prime minister’s approval rating dipped to 50 percent in November, a sharp drop from the 68 percent he enjoyed at the start of his premiership. The majority of survey respondents cited economic pressure and the rising cost of living as major contributing factors to their disapproval of the administration.

Significance

  • The shake-up underscores Anwar’s plans for Malaysia’s economy, with new ministries spun off to drive growth in the digital and renewable energy sectors. To this end, a technocrat was appointed the second minister of finance, with expectations that he will oversee the implementation of a broad range of reforms to expand the country’s revenue base, pare down the bloated subsidy bill and enhance Malaysia’s social protection framework.
  • Political considerations also factored into the new Cabinet picks. The lineup maintains a balanced representation of all major parties in the unity government, with the addition of three new ministerial positions. In particular, the addition of United Malays National Organization (UMNO) heavyweight Johari Abdul Ghani as minister of plantation and commodities is a nod to strengthen UMNO’s position in the Cabinet. Despite the party’s lackluster performance in recent state elections and by-elections, Anwar still sees its continued support — and that of its president, Zahid Hamidi — as a critical to keeping the ethnic Malay vote.
  • The Cabinet reshuffle resulted in six portfolio changes and five new ministerial appointments. Despite Anwar’s initial promise to maintain a small Cabinet, the number of ministers was increased to 31, bringing it just one member short of the record 32 ministers in the previous administration of Ismail Sabri. Two heads of key ministries — Health and Human Resources — who had been reported as underperforming either had their portfolios changed or dropped entirely from the Cabinet lineup.

Implications

  • Amir Hamzah Azizan, a technocrat, was appointed the second minister of finance. Prior to Amir’s appointment, Anwar led the Ministry of Finance alone. In his new role, Amir is expected to focus on implementing policies formulated by the Advisory Committee to the Finance Minister (ACFIN). Nurul Izzah, Anwar’s daughter and co-head of ACFIN’s secretariat, reportedly drives the committee’s agenda. Amir’s appointment is seen to strengthen Nurul Izzah’s influence over the Ministry of Finance because she is known to favor working with the leadership of a few government-linked companies.
  • The Ministry of Communications and Digital was divided into the Ministry of Communications and the Ministry of Digital. The exact functions on each ministry have yet to be announced formally, but it is understood that the Ministry of Communications will focus on content-related issues and the regulation of media platforms. The Ministry of Digital will focus on enhancing digital infrastructure and driving the digital economy.
  • The Ministry of Natural Resources, Environment and Climate Change was split into the Ministry of Natural Resources and Sustainability and the Ministry of Energy Transition and Public Utilities. The Ministry of Natural Resources and Sustainability continues to be helmed by Nik Nazmi, and the Ministry of Energy Transition and Public Utilities will be led by Fadillah Yusof. Fadillah, who is also one of two deputy prime ministers, is expected to oversee utility tariffs and realize Malaysia’s ambition to become a regional leader in renewable energy.

We will continue to keep you updated on developments in Malaysia as they occur. If you have any questions or comments, please contact BGA Malaysia Managing Director Hazree Turee at hturee@bowergroupasia.com.

Best regards,

BGA Malaysia Team

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Managing Director

Hazree’s 25 years of business experience have spanned across many sectors, including consulting, sales, marketing and services. His work with large multinationals and government link companies helped him build an extensive network, especially in the government. Hazree has been involved in business development projects in industries like oil and gas, banking, supply chain and e-government. He has turned around troubled and complex projects with challenging policy, financial and technical problems. He has set up a cloud computing business and was the architect of Commerce dot Com’s Center of Excellence for Government Procurement. Hazree has vast experience in liaising with government ... Read More