Malaysia in Perspective 2007

Malaysia in Perspective: Dilemmas, Challenges and the Way Forward

In the year 2004, the nation was in a buoyant mood. The new administration’s election manifesto was well received by the people. It had promised to bring the nation forward through a series of concerted programmes including a mindset shift i.e. from a third world to a first world mentality, to inculcate a new culture of excellence, to combat corruption and to implement tough reforms to enhance the public service delivery system.

In return, the Abdullah administration recorded a historic win at the parliament, winning 91 percent of the 219 seats. The new administration was given a huge mandate to implement the reforms it had promised.

Over the last short 3 years, the public sentiment has shifted from jubilant to despair. On whether the sentiment is uniform throughout the country is arguable but this the sense of hopelessness and helplessness is being felt in the urban areas. What went wrong?

This article intends to study the causes of the shift in the public perception, to highlight some of the challenges faced by the country and to propose a way forward.

One of the biggest dilemmas faced by the new regime is the baggage of the old. While promising reforms, the new regime soon found that resistance to change within the system is great. Corruption which runs through the veins of the administration and the ruling political parties has made the reform process frustratingly slow. At times, the reaction from the system is detrimental even to the new leader.

Prime Minister Abdullah Badawi found out the hard way. He called for a Royal Commission of the Police Force but was not able to implement the foremost important recommendation of the royal commission to establish an Independent Police Complaint and Misconduct Commission (IPCMC). It was an open secret that the ruling politicians need the support of the special branch officers during general elections to gather information on voters’ sentiment and grouses.

His failure to establish the IPCMC swiftly was the beginning of the credibility decline of his administration. His anti-corruption campaign was seen as more of a PR stunt than a steely action to eradicate corruption at all levels of the government. The fact that Rafidah Aziz, Zakaria Mat Deros and the Jasin MP are still around showed that Abdullah is not willing to antagonise the warlords in his party.

To his credit, Abdullah tried to correct some of the excesses of the last administration. Some of the public projects and government-linked companies he inherited were not in the best of shape or even relevant at present time.

The building of the crooked ‘scenic’ bridge would have been an international relations disaster for both Malaysia and Singapore. The national car company, Proton, is facing sagging sales and sloppy management. The faulty national car policy has not only limited the choices to consumers but promoted private car ownership to the extent of neglecting the public transport system. In the end, it’s penny wise pound foolish. The oil subsidy of RM15 billion paid annually could have been used for better developments.

When commented on the higher toll rates, Dr Mahathir admitted that toll concession agreements were not very well negotiated between the government and the operators. This not an isolated case but previous privatisation agreements involving the independent power producers and Tenaga Nasional were similarly one-sided. Hence, Abdullah is partly a victim of the old baggage.

When his predecessor sensed that Abdullah was trying to define his own path, a war was waged against him. To survive, Abdullah had to shift his direction and focus from the reforms he promised to pure power consolidation within his party. The shift has worsened his public perception especially amongst the non-Malay Malaysians. In order to solidify his Malay support base, Abdullah reignited the revival of the NEP which emphasises narrowly on the percentage share of Bumiputera corporate equity.

This brings us directly to the second cause of his erosion of popularity – inconsistent paradigm shift. He started promisingly by promoting a first world mentality. To many in the developed world, a first world mentality is synonymous to a merit-based system. By reintroducing the ‘old’ NEP into the national socio-economic development blueprints, the 9th Malaysia Plan and the Industrial Master Plan 3, Abdullah made a quantum leap backward to the days of communal centric affirmative action. To his detriment, his deputy Najib Razak even trumpeted that the 400 years of marginalisation the Malay community suffered in the face of colonialism cannot be repaid in merely 30 years. Overnight, the New Economic Policy became a Never Ending Policy. Abdullah is painted as a flip flop prime minister.

Some forward thinking Malay politicians and businessmen have distanced themselves from the NEP. Kota Bahru MP Zaid Ibrahim and prominent banker Nazir Razak have both questioned the relevance of the NEP. I argue that the original objectives of the 1970 NEP are not adequate in today’s context. Eradication of poverty regardless of race and the eradication of identification of an economic function to a race may still be required but additional thoughts have to be given to issues concerning competitiveness, capacity building and forces of globalisation. In short, the NEP has to be restructured or even ditched in order to introduce a more comprehensive and forward looking strategy to manage our socio-economic development.

The second dilemma leads us to a third one, the lack of a national vision or direction. Due to the divergence in public policy and political paradigm, a lot of Malaysians are at a lost as to where the nation is heading. While Abdullah said that the era of privatisation, big projects and generous government contracts are over, he recently announced a spate of big projects and generous handouts to lower class contractors. The icing on the cake is the RM47 billion Iskandar Development Region which could yet turn out to be the biggest white elephant in the history of the country.

On the push to become a first world nation by the year 2020, many analysts would have preferred the government to focus its resources on processes, programmes and institutions which can help to enhance the capacity and knowledge of our human capital. At present, the education system is in a mess. Meanwhile the bloated bureaucracy has sucked out our competitiveness and efficiency. Our economy is becoming the region’s laggards. Many joked that our economy is similar to our football team. Both received a lot of attention and resources but do not have much success to show.

Brain drain is happening at an alarming rate. In the month of November 2006 alone, more than 6550 applicants have applied or enquired to leave the country. Our brain gain programme paled in comparison whereby a ministry statistics showed that less than 970 applicants have applied to come back since 2001. Half were successful in their application but many have since left the country again.

For whatever it is worth, the Vision 2020 has provided a good rough guide to where we should head in the future. Abdullah should have stayed away from being too inwardly focused just because he felt that his political position and grip on the leadership is being threatened. By not giving enough emphasis to the last mile of the Vision 2020, we have lost our general essence and a sense of commitment to push forward. As Thomas Friedman said in his book, The World is Flat, if a community is made to think that it is entitled to the wealth of the nation it will not work hard to improve, to change and to compete.

By politicising the NEP for political gains, we are bound to lose more than we thought we could have gained. It is not even a zero sum game. The society generally will become poorer and more polarised if we choose to focus on wealth distribution instead of wealth creation. All the newly emerging developing countries with high economic growth and attracted a lion share of foreign investments are focused on wealth creation and growing the economic pie.

By the year 2050, China’s economy is expected to register USD44.45 trillion and India’s USD27.8 trillion, effectively the largest and third largest economies in the world. Indonesia’s FDI in 2005 has grown by 177 percent by embracing a more open and inclusive political model. After decades of racial violence and marginalisation, the Indonesian constitution was amended to recognise Chinese Indonesians as equals.

One of the most serious challenges faced by the country is our government’s propensity to look backward than to look forward. Rather than focusing on how we Malaysians can unite to face the globalisation onslaught, the ruling elites are preaching about our divisive and communal past and about how to preserve the 1957 status quo. A nation that spends its time looking backward will not have the time to think about the future.

We need to lose our sense of denial that things are going ahead as planned and by the year 2020 we will instantly become a developed nation. There is no magic in the slogan, “Malaysia Boleh!” Unless Malaysians of all races wake up and come to senses soon that we need to work as a nation and a society, the downward spiral will continue. In the year 1990, we were the 4th most attractive destination for FDI and we are now ranked 62nd. The economy used to grow above 8 percent per annum and can still grow up to 8 percent but we are growing at a mere 5 percent presently. We must realise that our failure is not due to another fellow citizen but of our own wrong doing.

Politics is an important catalyst to enable us to move forward. Good policies and effective policy implementation can contribute positively to our overall well-being and bring necessary progress to the society. Unfortunately, good policies are made by responsible and high quality politicians. To our dismay, leadership quality has not been proven to be genetically inheritable.

We have a few classic cases in Malaysia. A leader can be farsighted, open and honest but down his lineage his grandson can be the most vicious communalist. Our political system is feudalistic apart from being both dynastic and ritualistic. Public and political positions can be inherited and this has become an acceptable norm in our society. Works like a pension system, a son can reap the reward of his dad’s contribution and services rendered in politics. Ended up, many of the sons act like princes in political parties which are supposed to be accountable to the people. Like feudal lords, it is a taboo to criticize our political leaders.

Moving forward, we must decide our destiny. The outcome of keeping the existing communal political model is clear and the consequences are catastrophic. We need the openness and magnanimity of forward looking Malay leaders to bring back the minorities and embrace them as equals in our multiracial society with the Malay community forming its core. Our future can be best protected only when Malaysians can unite on the desire to create a better nation and a better home for all of us.

Towering Malaysians are not skin deep but personalities who can contribute the most to the nation and society.

Khoo Kay Peng
10th January 2007