The Unity Government is undertaking a pivotal recalibration of Malaysia’s fiscal trajectory, anchored on sustainability, institutional credibility, and international alignment—particularly with the fiscal policy frameworks endorsed by the International Monetary Fund (IMF) and World Bank. At the core of this recalibration is YB Senator Datuk Seri Amir Hamzah Azizan, serving as Minister of Finance II since December 2023. This briefing outlines the strategic contours of his role, situates ongoing reforms within the global macro-fiscal context, and identifies implications for inter-agency coordination.
II. Technocratic Fiscal Stewardship: Strategic Positioning of Amir Hamzah
Amir Hamzah’s leadership signifies a structural shift toward technocratic, non-partisan fiscal governance. With a corporate pedigree—including past appointments as CEO of EPF (KWSP) and Tenaga Nasional Berhad (TNB)—he represents a new fiscal orthodoxy centred on efficiency, accountability, and evidence-based policy.
His mandate includes:
- Fiscal rule-setting under the Fiscal Responsibility Act (FRA)
- Revenue expansion and tax system modernisation via the Medium-Term Revenue Strategy (MTRS)
- Alignment with IMF macro-fiscal diagnostics, particularly in debt sustainability, deficit targets, and subsidy optimisation
III. Alignment with IMF Article IV Recommendations (2024)
During the 2024 IMF Article IV Consultation, Amir Hamzah functioned as the chief policy interlocutor, translating international recommendations into actionable national reforms. The IMF’s assessments validated Malaysia’s direction, citing commendable efforts in:
- Enhancing fiscal discipline and reducing off-budget commitments
- Rebalancing subsidies toward targeted frameworks, mitigating regressive fiscal outflows
- Broadening the tax base, including preliminary policy groundwork on potential GST reintroduction
This positioning enhances Malaysia’s credit profile, fortifies sovereign risk assessments, and signals regulatory coherence to capital markets and multilateral lenders.
IV. Key Policy Instruments Under His Portfolio
Datuk Seri Amir Hamzah Azizan is currently overseeing several pivotal policy instruments that are structurally aligned with IMF frameworks and central to Malaysia’s fiscal reform trajectory:
- Fiscal Responsibility Act (FRA) – This legislation institutionalises fiscal rules, including debt ceilings and deficit targets, to anchor long-term fiscal discipline and reduce procyclicality in public spending. The FRA represents Malaysia’s commitment to rules-based fiscal governance, a core IMF recommendation.
- Medium-Term Revenue Strategy (MTRS) – The MTRS outlines a comprehensive roadmap for revenue expansion and tax system modernisation. It encompasses measures to improve tax compliance, reduce leakages, and broaden the tax base, thus ensuring greater fiscal resilience.
- Subsidy Rationalisation Framework – This policy initiative aims to transition from blanket, universal subsidies toward a more targeted and needs-based approach. It is designed to reduce fiscal leakages, improve equity, and reallocate resources toward high-impact social spending—an area repeatedly emphasised in IMF fiscal surveillance reports.
- GST Policy Re-exploration – Under Amir Hamzah’s stewardship, the Ministry of Finance II has reactivated internal studies and stakeholder consultations regarding the potential reintroduction of the Goods and Services Tax (GST). This move is intended to reinforce revenue sustainability and reduce dependence on volatile, cyclical revenue streams such as petroleum-related income.
Each of these instruments directly supports Malaysia’s macro-fiscal consolidation goals and positions the country in alignment with international best practices in public financial management.
V. Strategic Implications for Policy Stakeholders
Given the centrality of Amir Hamzah’s portfolio to national fiscal health, all relevant ministries and economic agencies must:
- Ensure policy coherence with MTRS and FRA objectives in all budget submissions and fiscal proposals
- Coordinate subsidy and social protection policy design with MoF II to align with rationalisation frameworks
- Align tax policy reforms with international standards to maintain Malaysia’s competitiveness and transparency
- Prepare for fiscal decentralisation impacts, particularly on states dependent on federal subsidies and grants
VI. Conclusion
YB Senator Datuk Seri Amir Hamzah Azizan represents the fulcrum of Malaysia’s transition toward IMF-consistent fiscal governance. His role is critical in institutionalising reforms that enhance macroeconomic stability, regulatory confidence, and long-term fiscal sustainability