Open up and Compete. Ready or Not!

This piece is written at Delifrance, One Utama. Like all shopping malls, One Utama is a typical representation of the freest of markets. People come here with one thing on their minds- to buy quality goods at the cheapest of prices. How is that possible? The supermarkets buy from competitive players. Hence cheaper goods and services can come from opening up the market. When we buy cheaper, we save more. At the end of the day, we are better off.

I have heard these very often nowadays. Now that Dato Najib is the PM and he has a good team, the Malays are miraculously ready to compete in the open market. now people! remember, competition is good. We get quality goods at cheaper prices. 

In a strained effort to justify the statement that the PM has not copped out on Malay interests, some one said that opening up the sub sectors in the service industry is tolerable.

Why? Many of the sub sectors are not participated by Malay Muslims anyway. These are basically haram economic activities. Maybe that's true. But how is it possible these areas though haram have Malay/Muslim participants previously? Maybe it wasn't 30% but there must have been some Malay participation. Otherwise licenses and quota wouldn't be granted then. Presumably when there was some Malay participation, that particular economic activity was fifty-fifty. The term halaram quickly comes to mind.

Perhaps at that time, the Malays participating in those sub sectors were led by the principle: wa haraamun kalau makan sorang; wa halalun jika kongsi sama.

Suppose it was KJ who said that Malays are ready to compete rather than Mukhriz? Would people accept that? Most likely the answer is no. More probably his dyed in the wool enemies will say KJ is betraying Malay interests. He will be accused to do Singapore's bidding which by the way, is the favourite stomping and shopping ground of UMNOniks.

But then, the announcement by the PM was followed up by the parroting of Mukhriz. Since it is Mukhriz who said that, and Mukhriz is an honourable Roman er.. Malaysian and he is the deputy Minister for international trade, this statement is a biblical truth. Those who disagree are heretics.

In that case, let us open up some more sectors. If subsectors are openable, surely the sectors themselves, despite being besmirched by the haram label, are more openable to competition.

We are not short of cheerleaders. The MITI secgen has said, opening up the service industry will allow joint partnership with Bumi partners. It's called strategic alliance. We know it by its original name- Ali-Baba, Ali-Mat John etc.

The secgen also said, it will allow qualified Malays to earn better income. The secgen forgets to mention- would stepping up the ladder require proficiency in the English language?

I think, this is no cause for worry as the secgen has also said that, after talking to the bumi players, they said, they are ready.

There has been this economic justification to open up the economy that has been bandied about for a long time. The general thinking is that insistence of the bumi requirements has caused the economy to slow down. By exactly how many percentage points we don't know. That would imply participation by Malays in the economy has lowered our productivity and therefore earned us less income.

We will soon have occasion to prove this point. Suppose we open up the sub-service sectors and admit free participation. Inefficient Malays and free loaders are weeded out. After the exercise, we find that productivity has actually increased. What do we say then?

Will we say, aha, we told you so, insisting on Bumi quota was the blight upon our productivity. If we had not insisted on the application of the affirmative policy, we would have earned more.

I will have to reject such an explanation. The real truth is: More efficient players have displaced the inefficient and the free riders. These elements whether Malays or otherwise would hinder growth anyway. What it will prove is: that we can never compromise on the need for quality leadership be it in politics or in business. Efficient and productive bumiplayers could very well attain sterling results. Good talent is not ethnic centric. Mediocrity is always counter productive.

What will the opening up lead to? More efficient business? More foreign investments? Better quality services and goods? Cheaper services and goods? If opening us gives us access to all these things, there is all the more reason to throw away all protectionist policies. If, as many are now willing and ready to say, Malays are ready to do anything, then why not ask these people to support dismantling the NEP?

How can protectionist policies harm us? The proponents of special privileges will say that better quality and lower priced goods and services will harm the protected players lose their monopoly. For example, if Corning and other Japanese players are allowed into Malaysia to produce fibre optics and be allowed to supply to Telekoms, itu apa macam? Telecoms Malaysia can save a lot of money and reduces its dependence only on one protected supplier.

It seems that we have to take all these talk about opening up the market with a pinch of salt. You are opening up markets where participation by ordinary Bumiputeras is very low anyway. Therefore opening up will not adversely impact Bumi interests but will certainly harm the interests of other inefficient and costly businessmen.

But as soon as we insist the government open up businesses monopolised by the privileged few Bumiputeras, you can be sure there will be hue and cry. Because monopolies and protection have allowed the scions of the privileged few earn fat pay checks and earn gargantuan fees. Threaten these monopolies, we have an immediate war on our hands. Mukhriz will then become the spokesman for more protection and more privileges. Let's start by opening up the market for optical cables. Boleh?

We are ready to compete right? If we Malays at the lower end of the market are, surely you at the higher end are more ready.