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Sakmongkol ak 47

ariff.sabri@gmail.com

Thursday, 23 September 2010

ETP, EPPs- rojaking our way to a high income economy


In effect, Jala is announcing a huge stimulus package containing a slew of entry point projects and whatever he wishes to term them bringing with them vast amounts of funds acquired on preferential terms I suppose. We are going to be drowned in our own saliva soon. It's all in the name of ETP. Economic Transformation.
Let us just say its disguised stimulus package. The EPF money is there. Baitul Mal is there, Tabung Haji and what not. Husni Hanazlah said it, we want to facilitate the private sector? How? Kasi pinjam dengan kadar faedah yang murah lah. Apa lagi.
Will they create jobs? Will they stimulate education and competencies? Will they lead to transforming wealth distribution? Will they build capacity? Will the EPP stimulate higher education needs and therefore fulfil our requirements for better educated, higher skilled workforce. It seems to me, its very logical premise to transform our economy into a higher income economy if we among other things(1) acquire, import technologies from rich countries (2) have a more educated and trained workforce and (3) cultivate ourselves to be competitive.
Will they create equal opportunities? I can see the sharks are already circling there- the Gamudas. The YTLs. Syed Mokhtars, the SP Setias, Berjayas etc. These are the prime movers of the ETP. Punters are looking out for the stocks of these companies. Out of the thousands in attendance, these are the chosen few who can deliver the ETP.
Spill over effects or slow trickle down? The sources of growth according to Jala's presentation are:-
  • The ETP projects will provide RM1.258 trillion or 74% of the country's gross national income (GNI) of RM 1.7 trillion by 2020.
  • The remaining 26% is expected to come from non-ETP project sectors.
The RM 1.7 trillion GNI growth contributions in 2020 will come from the following sources:-
31% from the 133 Entry Point Projects (EPPs), RM527 billion.
10% from EPPs multiplier effects, RM 170 billion.
33% from the 60 Business Opportunities (BOs), RM561 billion.
26% of incremental growth from other non-ETP projects, RM442 billion.

All these will generate 100% impacts? Are they over and above an economy that has reached full employment? They will just bounce off and a full blown investment will generate a 1 to 1 return? No leakages? ? No portion of those investments are sucked into depression portions of the existing economy?
It seems quite some time ago, I think I touched on the subject of the multiplier effects of spending. In the aftermath of Obama administration's huge stimulus spending, there was intense debate for example, on the effects of such spending on the US economy. The idea was the Keynesian solution. Spending will create the multiplier effects on the economy.
According to simple Keynesian models, the rationale for increased government spending during a recession is straightforward. We are in recession aren't we? We must accept this. People are already talking about double dip recession. Here our planners( fatally conceited of course) are talking outlandish economics. A future of plenty, overflowing with milk and honey.
But let me clear this issue that has bugged me. The most irksome thing that I have had to handle is this accusation that whatever is spoken against Idris Jala constitutes Jala Bashing. I think whoever thinks and sees it that way, must have elevated Jala to a cult figure or to a stature ill deserved by Jala. Hello friend, he was just an ordinary Sarawak Bumiputera who got into Shell under the bumi ticket long time ago. I am trying to contain my frustration here. Jala is not at all important in this discussion. I treat him or anyone else equally harsh. If it had been anyone else doing the Pemandu glitz show, I will say the same things. Readers forget that I was also from Shell and there, this cultist deference is non existence. So, OK, you have made it big but not necessarily on substance. So we tear Jala as just any other ordinary bloke who has come across a good fortune. Good for him.
But if he falters, we are not going to pull back our punches are we? If he dishes out preposterous and outlandish economics, we are not going to keep quiet are we? Jala or no Jala, we will criticise where necessary. So stop hiding behind this Idris Jala bashing. How clever can he be that shields him from criticism?
Back to spending. Jala is actually prescribing vast spending right? RM 1.7 trillion into our economy. We are not even mindful of inflationary effects. Under the impression that we are already operating at full employment, because whatever is invested yields a 1 to 1 return, we will incur inflation. If we haven't, then a large portion of the total investments will fill up those sectors that have suffered from the recent technical recession rendering a less than 1 to 1 returns on investments.
Now, according to the Keynesian-ish rationale, if governments employ underutilized labour and capital when they spend more, that provides an immediate boost to employment and output. Ok so far?
A further stimulus comes from the spending by the owners of the unemployed labour and capital who benefit from the government spending. Their spending helps multiply the effects of the government spending still further, and so does spending by the recipients of this second round of spending. At each round, the recipient of any spending, will spend in turn. The total impact is the sum of all these separate boosts, and its ratio to the initial level of government spending is called the spending multiplier. What is the size of the multiplier in which Jala premises his proposal? Which economics textbook? Which economic school of thought?
I find it a rarity to discover a multiplier of 10% as storied by Jala. In the US, after Obama approved of stimulus spending, a study by Dr. Christina Romer, Chair of the Council of Economic Advisers, said the spending multiplier during the recession was high. Soon after, her findings were disputed.
Jala's optimism may have ignored several considerations. First, there here is often a long delay between presentations of a spending packages, enactment of a law providing for the spending, and the actual spending. In the US for example, it was several years after Obama took office, they are still saddled with the balance of the expenditure package. In the meantime, the economy first hit bottom, followed a modest recovery in unemployment. The long lag between open day, enactment, and actual spending is an old criticism of fiscal stimulus even by very committed Keynesians.
Are the spending plans and expenditures directed at problem areas or are they going to be applied as though on a neutral economic environment? The whole spending program appears to treat as though our economy has not suffered at all. Suppose the entry point projects mentioned by Jala are absorbed into their respective but badly affected sectors, the new EPPs will not create a 100% impact. Some of the impacts are absorbed by the depressed portion of that particular economic sector. Example. Suppose that construction section/infrastructure sector has declined 20% during the recent technical recession. This will mean, 20% of the new EPPs will be absorbed by the 20% vacuum leaving a net impact of 80%. This will suggest that much of Jala's optimism is overstretched. That means even at the starting point, you have a carry-over of deficit.
Hence when Idris Jala recently said, 10% of the growth of what will be generated by multiplier effects, as an economist I find this difficult to validate. . Now, I and many people want to know, what kind of industry can generate a 10% multiplier effect. So far , the only industry that can generate such a multiplier effect is the racketeering industry ala Ponzi scheme. If that is the case, I think, the government should employ the likes of Pak Man Telo to be the head of Pemandu.

24 comments:

Anonymous,  23 September 2010 at 15:53  

Dato,
Its all figures, and it is plucked from the air to make for presentations.
Assumptions and justifications created by the big "con"sultans.
Too big too reaslised in the next nine years. On papers, it looks good and viable - lets see when it gets on the ground.
Seen this when the "cons" did for the Corridors promised lots of things but undelivered.
When you do that at one go -- all cost would go up - cost overruns then they need another RM1.7 trillion...
Dato Idris Jala - take the low hanging fruits -- solve the traffic issues - it give a lot of efficiency in KL there you can get saving. Solve the pilferage at the government procurement level, we can save a lot and the excess fund can go to the rakyat as they save them the cost -- more income to the rakyat.
Projects will attract more immigrants legal and illegals - more problem for local rakyat.
Anyway good luck to you Dato Idris.

Sideline,  23 September 2010 at 16:01  

Well said Dato Sak.

There are several key questions public deserved to know with such a hugh public spending and grandeur programs.

1. Presumably TS Muhyiddin takes over from DS Najib as Prime Minister, is he fully committed to continue DS Najib programs. RIght now people are beginning to be asking what DS Najib has done to various Corridors after billion of ringgit spent during Tun Abdullah Badawi premiership. And Tun Abdullah Badawi didn't continue programs laid by Tun Mahathir. There seems to be a trend here.

2. Also presumably next 2-3 or even after 10 years the programs fail miserably (god forbid) will Idris Jala and the entire team will be accountable to the losses even though they may longer hold or responsible to such programs?

If the answers NO, better rethink the program carefully as we do not want our future generations to pay for such carelessness.

Quiet Despair,  23 September 2010 at 16:07  

Thanks Sdra Sak for the good piece.
You made me understand what the high-falutin' words like ETP, EPP are really about.
And all this while I thought Idris is so great!
Your easy way of writing is much easier to understand than my professors, some of whom are Noble Prize winners in economics.
I really pray you will be chosen to contest as MP in the coming GE and be a Minister.
Or at least sit in various committees to propel our economic reforms.
Oh I didn't know you were in Shell before.
So you must know Aziz NongChik, Rosmah Mansor's first husband.

sakmongkol AK47 23 September 2010 at 16:11  

quiet despair,

i am glad you brought this up. yes i knew Aziz Nongcik. when schenker kept repeating the name of another fellow as Rosmah's fisrt husband, i was really tempted to correct him. but for what purpose?
good looking fellow- in fact he and i worked on the same floor.

Anonymous,  23 September 2010 at 17:09  

Last time we have Corridors, new we have ETP and also Entry points of projects.I find the term EPP confusing. Why entry point you are talking about ? You meant you can try it out, if not we gostan just like going into a lane ? Go to the basics of what investor look for, not creating big spending money items, they benefits more the cronies than the public. Focus on the softwares, not hardwares, if you have the softwares, investors can put in the money for the hardwares, if not they hardwares are just white elephants, just like the Corridors that not one thread now. Money can buy Lotus, but can you run it ? Malaysia need courageous leaders who dare to work for the people and not self interests.

Anonymous,  23 September 2010 at 17:28  

Idris Jala... Dato you must know him better than me, but what I do know about him is he is a non-technical graduate of USM. Non-technical maksudnya in Geography. 20-30 years ago it was the norm for Sarawak Shell to employ really, really worthless Bumiputera who knows next to nothing about anything for the sake of appeasing the local population.

Perhaps you can talk a little bit more about your Shell experience.

Anonymous,  23 September 2010 at 17:42  

Dato..

Maybe i misunderstood the whole concept of this GNI..but on simplistic note ,I believe it can be related to the Revenues..

So,what IJ is saying is for a total investment of USD 444 billion we get a revenue of about 351 billion per annum come 2020.Thats a yield of close to 80%.Assuming that the particular investments yields a profit on revenue of 12 %..thats like 10% ROI.

If I am investing in property..I am struggling to get 6 % yields NOW.And if its MRT and the like,presumably the yields are lower even cash negative.

so,it must be the wonder of multiplier effect.

These guys are visionary and can see far ahead in the future eg>Someone using an efficient MRT saves 2 hours daily i.e 600 hours/annum.They can be more productive thus can create RM30/hour or RM18000 per annum each.And if one project 3 million workforce thats RM 54 billion/annum additional productivity thus justifying MRT capex of RM 43 bil.But of course with more time,money and efficient logistic..the RM 54 bil can translate to more spending on food,entertainment,the Arts & digital content thus exploding the RM 54 billion 4 times at least..

Maybe , we are behind the curve.After all Idris turn around MAS..he got to be right.

Anonymous,  23 September 2010 at 18:04  

Tak baik Dato'. Ahmadi dah meninggal.

-MAKORANG-

Anonymous,  23 September 2010 at 19:07  

Dato Sak,

I also pray that you get to be a Minister next time round. All these ETP, Keynesians, NKRAs etc are terms alien to us ordinary Joes. I also graduated with a B Econs but alas at the bottom of the class, so I relegate myself as an ordinary Joe too and find ourselves being cynical and fatalistic. Gomen boleh buat apa dia suka, kita kena cari makan sendiri sendiri lah. so, siapa pulak nak tangkap itu semua penyamun ?

yugo agogo

Quiet Despair,  23 September 2010 at 19:17  

Sdra Sak

Yep. Very nice guy. Very good-looking. Better loking than Rosmah's second hubby. Huhu.
But no powerla, my brother.

Anonymous,  23 September 2010 at 19:57  

To quiet despair
Flip-flop? u said that idris was the the safety net yesterday, but today u are singing a different tune.
Dato sak
Tq for this interesting entry of yours.Point blank and easy to understand for a rakyat biasa like me.
Kesimpulannya yang kaya akan tambah kaya, yang miskin akan di bantu sikit-sikit dan middle income earners akan di lupa seperti biasa.
No need to work hard, just get the rigt connections.

p/s i happen to visit a work site, i asked the indon worker where his boss was? he got angry" Saya lah boss! saya bukan kuli pak!.Apparently he was the subcontactor nomber yang berapa hanya tuhan sahja yang tau,So was the main contractor?
You wouldnt believe it.Let me leave it at that.

Anonymous,  23 September 2010 at 20:11  

PART 2

Account department in any ORGANISATION is kept close to the ORGANISATION heart. If an ORGANISATION was going to outsource , it will OUTSOURCE other divisions BAR the ACCOUNT DIVISION to a 3rd party. MAS in its overseas division in the WEST, jewel in thier crown (you the reader can guess) has OUTSOURCE thier ACCOUNTS Division to a COUNTRY in the EASTERN BLOC of EUROPE. They now simply RUBBER STAMP every IN/OUT. MAS employed ACCOUNTS staff usually were predominantly Malaysian and they were MORE than OFTEN Questioned DUBIOUS TRANSACTIONS - By OUTSOURCING to the Eastern Bloc countries, this CHECK and BALANCE is NOW removed.. GUESS WHAT.. MY WIFE WHO SPENT MANY MANY HOURS GIVING IDRIS JALA WHAT HE NEEDED TO KNOW WHEN HE TOOK OVER MAS CAUSED ME TO GO HUNGRY AND MY EXPECTED FXXK.

IDRIS JALA USED HIS STAFF - then ditched them to the LOCAL WOLVES. Wife LOST HER JOB , I LOST MY WIFE ( due to hours of bickering - she was on a crusade to stop MAS from beng robbed/looted.. I did not give a FxxK for I knew that it was way above our head = when the ELITE are involved, what are we - commoners).. This shit cause me a lot. I pray one day to see justice done.. it will give me some relieve - in compensation for my broken marriage and all the shit that goes with it,

Jala Basher

Anonymous,  23 September 2010 at 20:12  

PART 1

Jala, I know what you did in MAS.

"This arsehole Idris Jala cost me my marriage - I was once an employee of MAS in the '80s in Malaysia before TR time, then I again became MAS employee again in he early '90s in TR's time and actually saw him strutting his stuff - he was a frequent visitor in my part of the world i.e. west .... I half guess he was upto no good - ignored him ..kept my head down for my monthly wage packet . My 2nd time employment with MAS in the WEST only lasted 9 months (By now I was a University Graduate and could SEE all that was going wrong and did NOT want to have anything to do with MAS ( my patriotic feeling were at MINUS level) for I saw MAS in TR days as a shit hole. Every body was at it - milking MAS for what it was. FISH rots from the HEAD.

I left MAS and could not be bothered if it went into oblivion. Missus continued working and cause she was so much younger than me, she still felt it was her PATRIOTIC duty to expose and save MAS .. She had many many many clandestine meetings with IDRIS JALA. tens/hundreds of documents were disclosed / handed to him in meetings in PUBS/Restaurants - phone calls were made/exchanged with his elite/secret operations team.

Like always in Malaysia Boleh, the whistleblower is sacrificed. The CROOKS were left to continue as if nothing happened, in fact they got promoted and rewarded with Datukship's even though they were OVERSEAS Malaysian residents from the royal households who frequent the west.

sakmongkol AK47 23 September 2010 at 21:23  

makorang,

my apologies. am not aware that Ahmadi Hassan dah meninggal. ampun dan maaf.

Anonymous,  23 September 2010 at 22:41  

The report is somewhat dated, Sak, but it bears careful review:

"The conventional wisdom, which we support, is that metro projects should be shown to be viable in economic terms, even though we have shown that, with the exception of the Hong Kong MTR, none is likely to be in financial terms (when all the costs are included)."

"Based on the available evidence of outturn costs, and including often ‘hidden’ public sector costs, we have estimated that the all-in cost of metros in Asia today is about:

· At-grade US$ 15-30mn/km
· Elevated US$ 30-75mn/km
· Underground US$ 60-180mn/km"

SEE: http://is.gd/foUBM

......................................

As observed, there is no contractor or consortium with enough equity capital to leverage funds for an MRT project of such size. This means the project will have to be government-backed. Which means the financial future of the young will be committed today in much the same way motorists today were committed long ago by the toll concessions and even through IPP agreements that mandate fuel subsidy of private power plants.

There are other issues as well - the route is fixed so the catchment of potential passengers will also be fixed unless the project is integrated with the present public transport system to reach other places. Understandably, that is another cost factor.

Therefore, for the price and the risk, the opportunity cost may be too high against cheaper alternatives like a better minibus system which will create jobs for the lower income groups on a sustained basis. If it's goods transport for new commerce, people will use roaded lorries and vans. MRTs are not used to transport goods. They are only used by secretaries, people with laptop backpacks, and bored teenagers or retirees. How much multiplier can they deliver?

The MRT is a big chunk of the total ETP commitment. And while we can envision a more modern suburban KL with fast rails and airconded subways, we must be mindful where we are financially now before trying to lure private money.

The basic question for all the projects is real cost of financing backflowed into the future versus numbers-backed benefits compared to other ways to spend/commit such large sums to create a high-income economy.

By real cost, i mean inflated costs parceled as extra incomes to deciders and people who will personally benefit from the projects.

I have used the MRT to illustrate some of the issues for the ETP overall.

There is another observation. Note that our medical tourism revenues are one tenth that of neighbour Thailand and one twentieth that of neighbour Singapore. Just ponder that for a few seconds with only one question - how come?

If things like that have been happening all along, the sanitised environment of a brainstorming lab will not do justice to the real drab way things have been going on in the management of this country.

Thanks, Sak.

Anonymous,  24 September 2010 at 02:44  

Idris is treating his ETP initiatives like how he handled his many pie in the sky initiatives that he generated through countless labs in Shell. In money terms, the relative size of these initiatives in Shell were peanuts compared to what he is talking about in the ETP and what is at stake is the future of our country not a department or even an entire operating company in Shell.In any case, even in Shell these were merely creative exercises and the leadership would not realistically expect even 20% of these initiatives to be translated into reality. At best, they would be happy if they at least got one or two big initiatives out of the many generated by the likes of Idris successfull. And dont forget,many of these creative lab sessions in Shell were exploited by people to project themselves and secure promotions.So the more fancier and sexier the idea , the better!

Unfortunately the ETP task Idris has been charged with by Najib is totally incomparable to that in Shell and MAS. In Shell and MAS, the worse case scenario would be that these companies go bust with a few thousand people out of jobs and a few banks burnt with NPLs. But get the ETP wrong and Najib/Idris risks the future of our nation and children.

Its time that we strip Idris' Powerpoint presentations and demand to see the numbers that are being hidden. That to me should be the test of whether Idris has his feet in the ground or is seeing things which will not materialise.

Anonymous,  24 September 2010 at 07:05  

Guys, the real culprit is Nor Yaakop. Get rid of him and the rest will follow.

Anonymous,  24 September 2010 at 07:55  

Actually Jala-bashing is deserved and undeserve. The truth is Najibnomics, being part of Najib administration makes no sense - it basically is proposal to put a patch on painful underlying problems.

Given that Idris Jala has to work within the restriction of Najibnomics that is just avoiding the issues, what else can he do but sell interventionist economics?

Blame Jala for being loyal to a failing Administration and its likely he does not have anything else better to do. But as far as any real plan is concern, no one can come up with much better than he has.

flyer168 24 September 2010 at 08:15  

Dato',

Thank you for your great effort to highlight the "Details..."

After all that has been said...

Just to share this...

PM Najib’s Cronies and their Related Companies - http://www.financetwitter.com/...lated.html

ETP – Wishful Thinking Against Reality Hidden from You - http://www.financetwitter.com/...m-you.html

What Is It - The Economic Transformation of Malaysia - A Roadmap, A Plan, A Programme, A Blueprint? (22/9/10) - http://futurefastforward.com/feature-articles/4229

Another "Jaguh Kampung Syok Sendiri Pre Election Exercise"

While Bolehland & its citizens "Burns"!

Gerald Celente: US Economy = Depression - http://www.youtube.com/watch?v...r_embedded

Mind blowing speech by Robert Welch in 1958 predicting Insiders plans to destroy America - http://www.youtube.com/watch?v=AZU0c8DAIU4&feature=related

This is proof that there are plans in place by the elite to systemically disassemble US sovereignty." Unquote.

(Does that sound familiar in Bolehland!)

As such ALL Malaysians MUST Restore the Independence of Malaysia & Malaysians...

Malaysians MUST "Get the Ketuanan UMNOputra/BN out of Malaysia & Malaysia out of the Ketuanan UMNOputra/BN Regime..."

Confessions of an Economic Hitman - http://hubpages.com/hub/Confessions_of_an_Economic_Hit_Man

"Economic hitmen (EHMs) are highly paid professionals who cheat countries around the globe out of trillions of dollars.

They funnel money from the World Bank, U.S. Agency for International Development, and other foreign “aid” organizations into the coffers of huge corporations and the pockets of a few wealthy families who control the planet's natural resources.

Their tools include fraudulent financial reports, rigged elections, payoffs, extortion, sex, and murder. They play a game as old as empire, but one that has taken on new and terrifying dimensions during this time of globalization.

I should know; I was an EHM.

I wrote that in 1982, as the beginning of a book with the working title Conscience of an Economic Hit Man.

We EHMs failed to bring Roldós and Torrijos around, and the other type of hit men, the CIA-sanctioned jackals who were always right behind us, stepped in....

It is your story too, the story of your world and mine, of the first truly global empire. History tells us that unless we modify this story, it is guaranteed to end tragically. Empires never last.

Every one of them has failed terribly. They destroy many cultures as they race toward greater domination, and then they themselves fall. No country or combination of them can thrive in the long term by exploiting others.

This book was written so that we may take heed and remold our story. I am certain that when enough of us become aware of how we are being exploited by the economic engine that creates an insatiable appetite for the world's resources and that results in systems that foster slavery, we will no longer tolerate it.

We will reassess our role in a world where a few swim in riches and the majority drown in poverty, pollution, and violence. We will commit ourselves to navigating a course toward compassion, democracy, and social justice for all.

Admitting to a problem is the first step toward finding a solution. Confessing a sin is the beginning of redemption. Let this book, then, be the start of our salvation. Let it inspire us to new levels of dedication, and drive us to realize our dream for balanced and honorable societies." Unquote.

The "Club of Doom...is Welcoming Bolehland to join its ranks..."

U.S. National Debt Clock : Real Time - http://www.usdebtclock.org/

It is just round the corner!

Is Bolehland "Padded" with any Contingency Plan for the inevitable 2nd Financial Tsunami?

Eat your heart out "Sheeple!"

You be the judge.

Cheers.

hishamh 24 September 2010 at 09:33  

Dato Sak,

A few comments:

1. Re: the multiplier - 10% share achieved based on the investment numbers quoted is actually pretty realistic. In economic model terms, they're using an estimated long term multiplier of about 1.1, which is about in line with international estimates of multipliers of investment spending (New Keynesian with rational expectations or SVAR models). Consumption and income tax multipliers are of course much lower (less than one).

By comparison the Romer estimates were around 2+ (or over 2:1 increase in the economy, using a structural Keynesian model without rational expectations), while New Classical models of course always yield a multiplier near zero (full crowding out).

Which one you believe depends on which one you believe applies to Malaysia.

You might want to check the references I used in this post.

2. The question of whether we are or will be at full employment or not is vexing - quite frankly, due to the nature of the Malaysian economic data, it's really hard to tell. Capacity utilisation figures are not published, and unemployment data excludes foreign labour. If you look at published data on foreign labour, the numbers can vary pretty dramatically. BNM has some figures on the output gap (see their annual report), but I don't know whether this includes or excludes foreign labour.

However, anecdotal evidence suggests we had A LOT of spare industrial capacity even before we entered the recession (a big reason why private investment has been so poor in the past decade), and contruction almost always uses foreign labour anyway. We also have a very poor female labour force participation rate, so there's spare labour there also that's not reflected in the employment numbers.

I suspect that we'll see impact (short term) multipliers less than 1 i.e. there's going to be a lot of leakage (imported raw materials and foreign labour), but a long term multiplier over 1.

[cont]

hishamh 24 September 2010 at 09:36  

[cont]

3. Re: capacity and education. Actually these were in the detailed breakdowns in the separate labs. I spent an hour browsing through the exhibits, and barely scratched the surface of what's on show.

The media have chosen to focus on the investment numbers, not the pure policy changes. I REALLY like the changes in agricultural policy, which should have been done 30 years ago - phase out small holdings, and encourage a big business approach. That's the only way we're going to meet our food security needs.

On education, the sector will be opened up for private institutions (partly addresses the capacity issue), pre-school education will be formalised and standards enforced. For the qualitative part, we already have the National Higher Education Plan - my wife is a lecturer at a public research university, believe me changes are already being made. Whether these changes are the right ones are of course debatable.

4. You are absolutely right to point out the wealth distribution issue. This is the one thing I find disturbing in the NEM/ETP - unlike many, I have no doubts we will achieve high income status by 2020. I fact, I don't believe the NEM/ETP is strictly necessary to reach that goal.

But the shift to a high-income, high-knowledge based economy is going to create winners and losers. 80% of the existing workforce has no more than an SPM education, and we're trying to achieve in a generation what took the West 200 years to reach.

Some people are going to be left behind.

The NEM mentions a transformation fund (paid for by a levy on industry) to retrain/reskill workers for the new economy. The numbers don't sound sufficient to me - effective retraining/reskilling is expensive in relation to its impact.

Another issue is that higher GNI doesn't necessarily translate into higher household income, especially since GNI includes income from abroad. Investment overseas does not contribute to employment or higher wages here.

I've no doubt that median incomes will rise (including mine) - but which segment of the population will benefit and how widely benefits will be felt is still an open question.

I think we'll see higher structural (5%+) and youth unemployment going forward, unless more attention is paid to the share of factor payments. The past decade has seen almost all gains in income being appropriated by capital, at the expense of labour.

We'll become a high income economy, no question, but whether we'll be a better and fairer society, is something that hasn't been answered.

Anonymous,  24 September 2010 at 12:33  

Folks,

This is not about Idris Jala bashing. I know him well, a decent and very competent guy. Never mind about his mastery of organizational politics through which he has succeeded. A lot of people have succeeded through that strategy and that's part of life in an organization. At least people like Idris have not succeeded in life through stealing and robbing public money in open daylight like some in Malaysia have done.

My beef with Idris on the ETP is that this is a different ball game all together and doing a Shell or MAS play on the Malaysian economy is being naive to say the list.

Surely Idris should be smart enough to know that an economy has to be built brick upon brick.It is thus delusional of him to think that we can triple the size of GNI in less than 10 years through a few fancy ETPs etc.

The sheer time taken to execute each of these ETP projects shhould indicate that not even half of them can materialize. The experience of Iskandar in JB and MSC in Cyberjaya should be lesson enough in telling us to ask Idris to get real.

Anonymous,  24 September 2010 at 12:40  

Aaah... Powerpoint presentations... Synonimous with BULLSHIT in Shell.

Management in Shell are only interested in powerpoints, they do not want to see the real numbers and data behind those powerpoint presentations. Wasting their precious time as highly paid executives, they say.

So most Shell engineers (first class honours from Imperial College or some other sangkar ayam like that) will gloss over the real numbers and present "corrected" or "modified" results i.e. smokescreen to make themselves look good and get a promotion to JG3 or JG2 or even to Lettered Category etc etc.

PETRONAS is also moving towards the direction of Shell (PETRONAS will ape anything and everything Shell does, from the beginning of PETRONAS in 1974 to now what with Wee Yiaw Hin and Sharbini Suhaili joining PETRONAS from Shell).

Funny though there are no or almost none PETRONAS representatives in this ETP thingamajigs (me not that in the know about ETP).

Takde PETRONAS staff yang layak ke???

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