Najib and the ETP

We are not going to take away any credit from those people doing the ETP show. A lot of thinking and skunk work have gone into preparing such an elaborate showcase of , what is really , a business plan for Malaysia. it's a thick document- reflecting, says the chief presenter, the government's political will.

But I can also argue that the ETP is also a product by the do-gooders and a product also of special interest groups. The do gooders are of course our politicians and leaders who think, the public should be taken care of by meticulous planners ensconced somewhere in Putrajaya. The special interest groups are of course the well connected business groups who are pushing for their projects to be adopted as either EPPs or BOs.

The conspiracy of these two groups, as I said in an earlier essay constitutes to me, disguised collectivism hiding behind the overt declaration, that we are pushing for free market system. Not a few people are easily taken in by the argument, that this ETP is a celebration of free market economics. It is private sector driven of course when the private sector involved consists of mainly the same old market players. It does not offer an opening up of the economic game.

I will still maintain my argument, that the ETP is a signal for the further strengthening of the idea that the government knows best. I have no quarrel if the government that knows best is a good government consisting of equally good people.

I have a simple test of this view. Last year, the government unveiled the biggest deficit budget as a fraction of the GDP in our history. Surely that is a sign of an enlarged government, not a ' work in progress' towards smaller government. The ETP is still going to be 40% financed by the government, directly through government agencies, indirectly through GLCs. The private sector will also be provided with cheap financing to jumpstart the economy. All in all, government participation is still going to be a dominant one. Therefore, in actuality, many of those who profess the most individualistic objectives support collectivist/command centre means without recognizing the contradiction.

The ETP is premised on unleashing the energies of individual economic actors or it should have been so. There are already two forces that will work against the achievement of the targets of the ETP. One, as we have said, the ETP can only be achieved within the context of a liberal order in which government activity is limited primarily to establishing the framework within which individuals can pursue their own business objectives. That is not going to happen under the ETP regime- the bulk of the businesses are going to be cornered by a few people. We haven't yet established a culture and tradition of operating with libertarian and democratic values.

The second force that will gnaw into the success of the ETP will be the government itself. Our civil service's excellent quality is only a politically correct assessment. In reality it is far from efficient and corruption is pervasive. The government is simply inefficient. The government has proven inept at managing enterprises, organizing and applying of resources to economic pursuits. It is often mired in bureaucratic confusion and inefficiency.

So to me we haven't addressed two underlying issues. One, the establishment of a regime cultivating the right values that open up market and invite participative capitalism. Two, we haven't re-structure the government and administrative machinery to support the ETP.

Here is our main contention. Our economy is not plan driven. This is my point. Our economy grows as a result of the many responses by business units. It's easy to mislead the public by giving a picture of an economic model, in which the inputs are fed by selected business units. Then, the business plan which is presented, is actually an amalgam of individual business plans by those who have been called in to submit. It's impossible for the government to capture the myriads of business decisions and responses. We don't plan our economy on huge input-output tables ala Mahalanobis where we perform the various mathematical operations.

The business of government like that said by the prominent banker, is to step aside and let the business community do its job. But it is even truer if he had said, that the business community shouldn't be confined to a selected few.

How do we know, the private sector and other players cannot come out with a better deal for the public? How do we know for certain for example, the 43 billion MRT project proposed an sponsored by Gamuda-MMC, couldn't be had at a far cheaper cost? We don't know because, to the government, private sector means, certain pre qualified private companies. The business of government, is to create the right framework within which we operate at the maximum. We invest in the apparatuses of governance- rule of law, administrative competencies, education, technology and business opportunities.