Fiddling while the Economy Burns

Who is minding our business? While we play politics, how's the health of the economy?

I was reading an interesting article about lemon socialism by Robert Reich. The term lemon originally refers to a defective car before sale. It is now used to refer to anything flawed. In economics, it has a special application. It refers to public ownership of bad enterprises, while the profitable ones are kept with the private sector. On these terms, the privatization of profitable enterprises leaving the lousy ones with the public sector, can also be described as lemon socialism.

In other words we have been suckered. We are left with deadwood business enterprises. The profitable ones are actually reserved for chosen capitalists. And in our country, the term chosen capitalists meant just that- you are the chosen ones by the government. The suffix capitalism when used on them is an insult to all hard working capitalists who actually create value. The basis of choice is very questionable. The basis of choice is almost always not one grounded on value adding potential. Most of the time, it is personal kitty adding potential.

Our government has perfected lemon socialism to an art. Over the years, the plumiest economic resources are placed in the hands of the chosen private companies while the lousy ones are left behind. Those left behind are managed by quality-challenged managers working for the government.

I was talking to a friend yesterday night about general topics regarding the managing of the economy. This friend is a Malaysian but is head of engineering with the Mercedes Benz group. He is responsible for the production facilities owned by Mercedes for the whole of Malaysia. He is normally a resident of the UK, has a house there and has children studying there. He has been re-assigned to Malaysia by Mercedes group.

It is interesting to listen to his revelations, on how European countries like Germany manages their economies.

Symbiotic relationship between the public and private sector.

Sometimes I think, the way our policy makers understand the concept of private-public sector cooperation is allowing a few non value adding government top hats sit on the board of private companies. In other words, this is rent seeking institutionalised. Survey any board of directors in private companies. You will see retired civil servants, army generals, who are past their prime and cannot possibly contribute anything other that public relations skunk work. I keep repeating the lines uttered by the fictitious Chief Zed in the Men in Black film on government employees- gentlemen thank you for your time and efforts- after years of being trained by the government, the quality of work is what we have expected from such training. In other words, any accreditation by the government stinks.

Why is the quality of our civil service low? We don't have a civil servant with the quality of the late Tan Sri Zain Azrai( a Cambridge graduate during the era of Tun Razak). We have, for want of a better term, lemons. Yet these lemons are tasked of representing the public sector, i.e. the government on the boards of private companies. We have no shame or what?

When I was an ADUN in the state of Pahang, there was a talk organised inviting the author of the book, Winds Of Change , Tan Sri Navaratnam. He gave a speech expanding the ideas contained in his book. Later , I stood and asked him- in his mind, why and when did the quality of our civil service start plummeting downwards?

I am sure he knows the answer but declined to answer for politically correct reasons. Since he did not want to answer, I gave my opinion. And I hold this perception as true.

Our civil service started to decline when the civil service becomes dominated by Malays. This decline was precipitated by several developments. First when the leadership of the civil service was monopolised by Malays and second, mediocrity reinforced, when Malays were inducted in large numbers into the civil service. Not just Malays, but lower quality Malays. In other words, there was a deliberate policy of institutionalising mediocrity. Low quality leadership reinforces itself by admitting low quality workers.

Sometimes I cant help feeling that our civil service is the employer of last resort. The brighter ones are taken in by the private sector. Or by definition the brighter and abler ones pull themselves by their boot straps to look for better jobs commensurate with their quality of mind. The less nimble are left to be absorbed into the civil service. Our civil service in effect becomes the reservoir of mediocre talents. And later, we draw from this reservoir for talents to manage our businesses, economy and sit on the boards of private companies. We actually get the governance we deserve.

More on these later.