The Road to High Income Economy.

What needs to be done by PM Najib? He needs to create the atmosphere of industrial revolutions, the climate in which capitalism can survive. He is right on innovation – because without innovations, no entrepreneurs, without entrepreneurial achievement, no capitalist propulsion. That was the main thrust behind Joseph Schumpeter's ideas of capitalism. But he also needs to be on top of these ideas. Otherwise, he can't piece it whole.

I am thinking- we are on the road to become a high income economy, or at least we want to become one. I would expect that in order to do so, we must focus on the real economy. Instead the PM goes to Hong Kong and talks to fund managers. These fund managers invest in what- the stock market? The problem is this- there is excess liquidity in the world looking out for domicile in the real economy. So the problem then really is in the real economy. What and where are the new products, new ideas that funds are searching for?

The NEAC better come out with plans to restructure the economy and to unleash bankable ideas and products. In order to do that, a wide variety of measures freeing initiatives and entrepreneurship must be carried out.

How about for instance, restoring Penang's free port status? Will Malays be marginalized? How can they when there will be new opportunities unless of course they are free loaders. But then free loaders are not confined to Malays only- there are Chinese and Indian freeloaders. If they are marginalized its because they are the products of stupid polices in the past. The services provided for by the Boom Boom Chambre in Penang will most likely benefit from opening up of Penang. Because the lady owner is leveraging on a bankable and financeable service.

We don't want to- because that ogre Lim Guan Eng is there? Even when the saintly looking Koh was there, the Malays were also marginalized and they were lulled dull because UMNO compradors told them different dreams. So go play with yourself if you now come back to say Malays are marginalized under Lim Guan Eng. How about giving recognition that Penang last year raked in operating revenue of more than RM 1 billion? That has never been achieved under Koh Tsu Koon and those Malay deputy chief ministers. I say, FO to you and your sanctimoniousity.

We are all hoping that the proposed new economic model (NEM) or Model Eknomi Baru(MEB) is not just an adoption of the letter M- from NEP to NEM and from DEB to MEB. Our mission is to become a high income country by 2020. This is the same year the previous PM Dr Mahathir set for Malaysia to become a developed country. A developed country is one that has a high per capita income.

Thus to me it seems the same thing being said differently. But it also suggests that much of the policies laid down by DR Mahathir have to be re-structured or disbanded totally. One of them is the realization that Malaysia needs to get into the mainstream. Getting there means being on the same page with foreign investors. To do that, PM Najib has to carve out policies amenable to free market practices.

This policy stance is at one at odds with what were pushed for by Perkasa which has Dr Mahathir behind it. In a sense, the new approach to becoming a high income country which is also a developed country places PM Najib on a thought collision course with Dr Mahathir. He must be resolute and his advisors and political backers mustn't wilt later. The constitution of UMNO people is not the same like before.

PM Najib is banking his hopes on productivity and creativity. The first is dependent on free market. You compete to be productive. You are always looking for the best way to overcome your competitors. Creativity is the prerequisite of innovation- doing old things in new ways; new ways of doing things that are unique.

How do you raise the cash income of the people? By making them into entrepreneurs. The PM goes to Hong Kong and he talks to fund managers- he is asking these people to invest in Malaysia. What to invest on? On new ideas, new products, unique products. Not just to relocate. It's the real economy that needs looking into as the basis to raise cash income. Fund managers invest in the stock market- that's not really real economy isn't it. Business hype not backed by real economy can also induce fund managers to place large amounts of fund inside this country.But that would still leave the productive capacity of the country lacking.

Then you have a strange situation where the vibrancy of the stock market isn't supported by the real economy. Real economy- you actually produce goods and services.

It's a simple proposition really. We want everyone to become a capitalist. Not capitalist in the sense of an antonym to Marx's Socialism but capitalist in the mold of a Schumpeter. Much of the idea of creativity, innovation and entrepreneurship is attributable to Joseph Schumpeter.

Let the NEAC people study him.