Neither a command economy nor a government that knows best
The world bank has come up with a report saying that Malaysia is an extreme example of tepid investment. How do we reconcile this report with the glowing assessments of the NEAC's NEM? By the usual Malaysian way- rubbishing the report saying what do others know about us? Just like what the people are now rubbishing Richard's Branson's opinion on the Anwar Ibrahim Trial. By the way, I have written along the same lines just a few articles ago.
The linchpin of the ETP will be private sector investments. The NEM said it. The World Bank is saying the same also. The NEM forgot to mention, the old way of doing business was also and has always been private sector driven- privatize the profits and share the burden with the public.
Which private sector is the NEM talking about? The executive summary of the NEM says, income increases have improved vastly for the top 20%. The bottom 40% of society has suffered badly. Maybe the private sector makes the bulk of the top 20%.
This will further strengthen the arguments that economic and business models in Malaysia are actually from the top 20, by the top 20 and all about the top 20.
So we ask again, when the NEM talks about the private sector, what does it mean really or what does it mean in reality in Malaysia? public perception has it to mean those big players already cornering the businesses in Malaysia. it's a club of Rome fraternity engaged in friendly competition with each other, competing for favors from the top decision maker in this country. Members of that fraternity paints a picture of doom and gloom out there and they offer the out there a solution.
The NEM decried a lot of things. About the lack of innovation and R&D. why doesn't the government publish data on the performance of the top 20% in this respect. What proportion does Berjaya spend its revenue on R&D? what proportion do our top companies spend on RND?
The report also noted that 8% of our workforce has attained only SPM level qualifications. Specifics please. What level SPM? The passable? With 2-3 credits? That means, the majority are mono-linguists. and are insufficiently skilled. They are unable to compete in the open market and by extension, limits Malaysia's competitiveness in the open economy. The bulk of this 80%- where do they end up? Probably they end up as clerical service providers in government departments or as some low level paid employees in the private sector.
Let me ask again- how do we improve our government delivery service if the majority of its workers are only SPM holders led by heads of department, who themselves have just so so qualifications? The government simply cant. Those SPM holders entering the job market in addition can only offer less better SPM credentials.
Where are the bold reform measures that will unlock value the NEAC speaks about? It spoke about an average growth rate of 6.5% over the next 10 years in order to get us to a GDP per capital level of YSD 17k. It acknowledges we have a strong manufacturing sector dominated by electronics and electrical industries. Yet it is still espousing expanding on this industry which it has already admitted to having a large import content. We are just sub-contractors then; we haven't grown our own timber.
The basic solution to inclusiveness is social mobility without which, social frictions and antagonism will take over. The inclusiveness that we are actually talking about is creating accessibility. The social mobility that we must talk about is the mobility of the bottom 40% getting into the foyer of the club of Rome fraternity. When we continue to have sharp class divisions, animosity will build up and eventually boil over.
At the root of social mobility and inclusiveness talked but by the NEAC must be a reward system- a system that rewards the more intelligent, the more talented and the more hardworking with better incomes and rewards. Otherwise, the slogan of bold reform measure remain what they are- just empty slogans justifying the high fee in preparing the various labs across the country.
Which leads us to the important market friendly affirmative actions offered by the NEM. What are these? These are actions designed to enhance the capacity of the bottom 40%. These are actions designed to meet needs as opposed to meeting of quotas or some legislative defined status.
What does the term market friendly affirmative actions mean operationally? In order to know and understand the term, we have to know what it DOES NOT mean first. Unfriendly affirmative actions are the product of an eco-system. Big sounding word no? the main features of the unfriendly ecosystem?- vested interests, market distortions and rent seeking activities. All these combined to undermine productivity and entrepreneurship.
So where are the bold audacious moves to remove these? We dare not move beyond the NEPish demands reflecting the lack of political will which the NEAC underscores as sine qua non for the success of the NEM and ETP. We have not moved beyond the encirclement of vested interests which submitted many of the EPPs and the BOs in the ETP.
What do you put in place in the ecosystem? One central command type with other central command types? Privatize the economic planning? Privatize the role of government? The government steps aside and let the private sector ( not free market) takes over? Then you replace one type of command centre with another. This is what the NEAC says:-
The NEAC advocates a new, bold approach to obtain the right eco-system where efficient markets can operate to produce equitable outcomes. The vicious cycles of vested interests have to be broken to remove distortions and rent-seeking activities, all of which undermine productivity and entrepreneurship so vital in creating a vibrant economy.
As to the enabling environment, the NEAC proclaims:-
The private sector will be the main driver of growth in a market environment that rewards innovation and creativity while the government will generally be the provider of public goods and the custodian of public interests through an effective regulatory framework. Well-governed and leaner government institutions will be held accountable to performance-based outcomes in line with the GTP. They will be staffed with highly qualified, flexible, dynamic individuals with multi-tasking capabilities. Private firms, non-government entities and the civil society will aspire to internationally accepted governance.
The key word here is effective regulatory framework. I have already talked about the inconsistency of rejecting collectivism by pushing individualist values, but in the end, coming out with collectivist solutions. 
11 comments:
Dear Sakmongkol
“At the root of social mobility and inclusiveness talked but by the NEAC must be a reward system - a system that rewards the more intelligent, the more talented and the more hardworking with better incomes and rewards”.
That’s the only way to go for any country that wants to progress. But let’s temper that idealism with a social safety net that would catch the bottom 40%, so that they too in time can climb the economic ladder closer to the Club of Rome fraternity. For if we don’t do this “we (will) continue to have sharp class divisions, (and) animosity will build up and eventually boil over”. I fully agree with this sentiment.
However, we must not think this is easy to do. It entails the complete over-haul of the current education system; we need to change mind-sets so that those people will have confidence in their own abilities to compete (politicians keep telling them they can’t); we urgently need to raise their incomes to lessen their suffering (minimum wages will help); and we must do much more to bring them basic modern amenities that urban folks take for granted – access to basic medical care, better schools, and portable water and electricity in deep rural areas. This is the perpetual poverty trap that many in the bottom 40% find themselves.
The paragraphs you quoted from the NEM sound like they were written in heaven by some economic angel. How much better can they be? But when these beautiful ideas meet the harsh and cruel reality, it is the reality that prevails. Getting rid of vested interests and rent-seeking behavior? We are just seeing more with the introduction of the ETP and the entry point projects (MRT, etc). And what about allowing efficient markets to thrive and the government to only concentrate on providing public goods? Well, if the ETP is not another piece of central planning in disguise, as you have pointed out, what is it? So there is a lot of cross-talking here. I am a bit confused. I would dearly want to believe, if a little naïve, the outcomes the NEM promise.
as Warren Buffet puts it: "It is a class war alright and my class is winning!"
Don't fool ourself that if the Malays are united, there will be utopia. Politics in Malaysia from the days of the Malacca Sultanate up to the present age is not about the ordinary Malay people. It's about the elites. The ordinary Malays are just cannon fodder regarded merely as material to be expended in wars between the elitist themselves.
UMNO is a party still teetered to a feudalistic and tribalistic mentality. UMNO's struggle in the beginning was mostly inspired by teachers but when Mahathir became the leader, UMNO was transformed into a party for businessmen and cronies. Matters came to a head when the original UMNO was disbanded. The present UMNO is a bastardised party comprising of selfish rent-seekers and rabble-rousers. The founders of the original UMNO, Tunku Abdul Rahman and another former PM Tun Hussein Onn was prevented from joining the new UMNO. It is no secret that within UMNO Baru there are serious divisions and factionalism. It is the only party in this country where territorial rivalries between different factions has resulted in murders and practice in witchcrafts. Recall the Mona Affendi and Sports Minister cases and you will find that the party is all about the struggle for power and riches between the elites.
The NEP that was supposed to benefit the poor of all races was hijacked and diverted by UMNO Baru to create a club of UMNOputra billionaires with the help of non-Malay supercronies. If the NEP have been implemented properly, the country would have peace and prosperity for all races, but unfortunately the elites are getting richer and despotic while the ordinary Malays are struggling and becoming more insecure.
Now coming back to my earlier assertion that the elitist Malays have never known to have unity among themselves. Prior to the advent of the colonists, the Malay elites had been waging wars and killing themselves and the poor and ordinary Malays served as cannon fodders. There was no peace in the land and there was a time when a neighbouring state like Thailand were controlling a third of the Malay Peninsular. Even during the Sultanate days wars were the preoccupation of the Malay elites that they had to turn to the Chinese emperor to protect them. And when the British came the Malay elites were willing to surrender their powers to the British for their own protection. Let's be frank about it: if not for the British, there would never be a Malaysia. What would happen is that the Malay elites will just control a diminishing two-thirds of the Malay peninsular but never united. But now with independence from the British, Malaysia is now more than 160% of its original territorial size. So colonialism is a blessing in disguise, actually.
Now the Malay and their dependent non-Malay elites are making a lot of noises that the immigrant races such as the Chinese and Indians are depriving them of the unity that they never have. The fact of the matter is that the immigrant races are being scapegoated for all the problems of the country. Okay expel all the Chinese and Indians back to China and India so that an utopia of peace and prosperity will ascend on this land. Fat hopes: Malays will fight against Malays and finally the Indonesians will colonised the country. So for the ordinary Malays, don't ever trust the elites. They have never had a place for the ordinary people.
Whether you are an ordinary Malay, Chinese, Indian or others, we are not at war. It is the elites from the ruling parties and their super non-Malay super-cronies that are fanning the flames of distrust for their own selfish interests.
… continued:
Now coming back to my earlier assertion that the elitist Malays have never known to have unity among themselves. Prior to the advent of the colonists, the Malay elites had been waging wars and killing themselves and the poor and ordinary Malays served as cannon fodders. There was no peace in the land and there was a time when a neighbouring state like Thailand were controlling a third of the Malay Peninsular. Even during the Sultanate days wars was the preoccupation of the Malay elites that they had to turn to the Chinese emperor to protect them. And when the British came the Malay elites were willing to surrender their powers to the British for their own protection. Let's be frank about it: if not for the British, there would never be a Malaysia. What would happen is that the Malay elites will just control two-thirds of the Malay peninsular but never united. But now with independence from the British Malaysia is now more than 160% of its original territorial size. So colonialism is a blessing actually.
Now the Malay and their dependent non-Malay elites are making a lot of noises that the immigrant races such as the Chinese and Indians are depriving them of the unity that they never have. The fact of the matter is that the immigrant races are being scapegoated for all the problems of the country. Okay expel all the Chinese and Indians back to China and India so that an utopia of peace and prosperity will ascend on this land. Fat hopes: Malays will fight against Malays and finally the Indonesians will colonised the country. So for the ordinary Malays, don't ever trust the elites. They have never had a place for the ordinary people.
Whether you are an ordinary Malay, Chinese, Indian or others, we are not at war. It is the elites from the ruling parties and their super non-Malay super-cronies that are fanning the flames of distrust for their own selfish interests.
Dear Sak,
Hang ni memang penembak yang betul kaw.
I don't trust the current govt. Nazir and the gang was/is trying to create an oligarchy where the rich get richer and the poor remain poor or poorer.These wannabe robber barons in the end may try to create the 'failed' russian economy where a few oligarchs rule, god forbid.
Orang bebas.
The World Bank report (as with most reports issued by international bodies) tend to be more careful and diplomatic in use of language. If you read between the lines, the WB report is actually very damning of the current state of the Malaysian economy.
The present federal government is incapable of reversing the downward slide. They don't appreciate the seriousness of the matter. Even if they do, they do not have the knowledge and expertise. Even if they have the knowledge and expertise, they don't really care because their mentality is to line their own pockets while they are in power.
If Malaysia is to pick itself up again, it will have to depend of a new crop of leaders, not from Barisan Nasional, much less UMNO.
Dato, if you really care about the country and your people (i.e. Melayu), you should pick up your ass and turun padang to the kampungs to share your views. A lot of them do not surf the net or read your blog, much less if you write in English. You need to battle the likes of Perkasa and Dr. Mahathir who are on a fear-mongering rampage. They want your people to continue to live in darkness and be downtrodden. Meanwhile, the world is evolving at breakneck speed. This is not Melayu against the non-Melayu ... it's about Malaysia catching up (not even keeping up) with the rest of the world ... if you can make your people understand.
Dato Sak,
I can swear that your article is actually describing Malaysia as a Zimbabwe already in the making. It's high time we change the country's name to Malaybabwesia.
You forgot to mention that those that did not even pass SPM have full time jobs as "Mat Rempits" terrorising ordinary people. So no need to worry Dato', the government has plenty of ideas to create employment opportunities in this country ranging from "Mat Rempits" to senior civil servants to suit their "academic" qualifications. Just take a look at the current cabinet where the ministers are mere puppet heads who openly declared they are powerless to act in spite of they being charge of their ministries.
Sakmongkol
"The NEAC advocates a new, bold approach to obtain the right eco-system where efficient markets can operate to produce equitable outcomes."
"..while the government will generally be the provider of public goods and the custodian of public interests through an effective regulatory framework."
They are statements quite correctly effusive and should draw nods of approvals! ...but recently I read them as serving only the "elites" and who are the "elites"? Exactly as you have described in your previous posting.
Specifically, I refer to here are that details in the proposed MRT Project suggest deeper conspiracies are in play between this "Government" and this "Private Sector" with this "Government" will be all-willing in providing this "ecosystem" particularly will be putting into effect the relevant clauses of the "SPD Act" and soon to be "MRT Act" and enabling this "Private Sector" to buldoze for full realization of their MRT proposal which will be benefiting only this "Private Sector". The confidence of this "Private Sector" advancing and proceeding with their proposal even before the appropriate approvals have yet to be given are most galling!
The Malaysian public will learn yet again the meaning of "this Government which rules by Law"
This "Government" really knows best ... in commanding the economy to the benefit of the "elites"!
One Gagged Consultant
Sak said:
"...economic and business models in Malaysia are actually from the top 20, by the top 20 and all about the top 20."
This phenomenon started during Mahathir days. My take is that Idris Jala and his lab and the roadshows are mere circuses to distract public attention away from the listless cabinet members who have no inkling of what's really happening around them, much less of the pulse of the nation.
Since the Sukarno days,I have always been suspicious of people speaking in sloganic and acronymic language. My dream is to see Soo Khoon take over from Idris in one of the presentations.
So..what happen to the Subsidy Lab?
Thats a real example of the mindset..protect the interest of the big boys at all cost..cos their lobby is strong.
Subsidies in this country is benefitting the big boys MORE then the rakyat.presumably,CocaCola,F&N are using the same subsidised sugars,electricity,gas etc as the rakyat.Some manufacturers are even exporting goods produced with subsidised materials & energy...and making big profits.Wats the benefit to the rakyat?>>employment..mmm..mainly foreigners,tax ..so many special incentives ITA etc
So..a more balanced approach is required.Industry should be COMPETITIVE without subsidies.So,beneficiaries of subsidies >>non BUMIs by virtue of their control of the industry.
Now,if you notice..very2 strong lobby in papers for NAJIB to walk the talk n showing his leadership by making sure that the EPP unveiled by IJ is accelerated.Ha ha..fait accompli..MRT,High Speed Train,coal plants capex by govt is now secured thanks to IJ ETP lobbying.
So,who gets the cake?
Not me,not you either.
After all we the common rakyat are bad people who wants everything subsidised.And if u r Bumi..u even want special help..
Be like the big corporates > our YTL,Gamuda,MMC,Vincent Tan,Sunway Cheah,TanKW,Nazir,GLCs..they are tough,smart,work so hard and don't need subsidies cos they are competitive...very2 competitive.
Somehow,I do feel bit of a sucker..inadvertently tho .
Salam buat AK47,
Penyatuan dan perpaduan perlu dilihat dari sudut yang positif. Memandang aspek berkenaan sebagai remeh-temeh adalah seakan-akan mahukan manusia hidup secara berasingan dan bersendiri-sendirian. Keinginan untuk bersatu dan berpadu dalam semua aspek (ekonomi, ketenteraan dan kenegaraan) adalah keinginan yang baik dan dapat membantu manusia memanfaatkan semaksima mungkin apa yang ada di atas muka bumi. Sebaliknya mereka yang menolak elemen perpaduan adalah golongan yang sombong, bongkak dan pentingkan diri sendiri.
Usaha ke arah penyekutuan, perpaduan dan penyatuan dalam kalangan manusia bukanlah baru. Makanya, muncullah istilah puak, geng, klik, kumpulan, persatuan, kesatuan, kroni, organisasi dsbnya. Antara usaha yang terbesar dan berjaya dalam konteks perpaduan dan kesatuan adalah kelahiran nama-nama besar dan gah seperti Kesatuan Eropah, Kesatuan Amerika Latin, Kesatuan Soviet, United States, Kesatuan Arab dan United Nations.
Umumnya manusia percaya hanya dengan bersatu dan bekerjasama mereka dapat mengharungi cabaran, menguasai keadaan dan mencipta kejayaan. Kalau satu masa dulu, tanpa adanya penyatuan, ruang dan laluan untuk penjajahan telah dibuka seluas-luasnya. Bertitik tolak dari pengalaman yang lampau maka perpaduan dan penyatuan amat diperlukan kini supaya sejarah yang sama (kolonialisasi) tidak akan berulang.
Mengandaikan kalau dulunya masyarakat tidak bersatu maka tidak ada sebab sekarang ini masyarakat juga tidak perlu bersatu adalah andaian yang serong. Pengandainya mungkin berasakan status yang ada (tidak bersatu/ tidak berpadu) akan memberi keuntungan kepada dirinya. Kalau di satu penjuru dunia sedang berlumba-lumba memilih rakan untuk bersekutu, masakan pula gesaan agar perpaduan itu dianggap tidak perlu (yang dilontarkan di penjuru sebelah sini) mahu diterima sebagai cadangan yang waras?
Manusia perlukan kekuatan bagi menghadapi pelbagai ancaman. Dan oleh kerana sukar bagi manusia mencapai sasaran kalau bersendirian makanya mereka perlu bekerjasama bagi membina tamadun. Manusia gua juga faham bahawa dengan bersatu mereka boleh mendapatkan lebih banyak kekuatan dan akhirnya dengan kekuatan tersebut dapatlah ia digunakan untuk mendapatkan lebih banyak bahan untuk keperluan kehidupan.
hakikatnya, manusia tidak dilahirkan dengan ciri-ciri luaran dan dalaman yang sama. Perbezaan dalaman dan luaran manusia bukanlah sebab untuk manusia menolak antara satu sama lain. Manusia perlu menggunakan perbezaan ini untuk kebaikan. Dengan bekerjasama manusia dapat meningkatkan keupayaan fizikal dan intelektual. Manusia yang kuat dapat mengatasi banyak cabaran. Kalau serangga seperti semut faham makna bersatu kenapa manusia harus buat-buat tidak faham?
Oleh itu adalah jelas bahawa konsep bersatu dan berpadu adalah konsep yang baik. Untuk menyatukan manusia, tembok penghalang perlu diruntuhkan. Meningkatkan perasaan saling percaya mempercayai dan mengurangkan syak wasangka adalah pra syarat utama kearah melahirkan masyarakat yang bersatu lagi berpadu. Namun, rambut manusia tidak semuanya hitam dn begitu juga dengan hatinya. Hati yang hitam akan sentiasa ada dalam kalangan manusia! Meskipun dalam hati tidak siapa yang tahu, itu bukanlah penghalang besar untuk manusia bersangka baik antara satu sama lain.
ANDIKARYA MAYA
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