Can Malaysia register a robust 8% growth in the next decade to achieve the status of a fully developed nation?
In the Government Transformation Programme (GTP) Roadmap released here today, it said there were challenges for Malaysian economy to grow by eight per cent per year until 2020 as the growth has slowed after the Asian economic crisis in 1997.
Malaysia’s growth rate has almost halved since the crisis, down from an average of about nine per cent per annum in 1991-1997 to an average of 5.5 per cent per annum in 2000-2008.
The compound annual growth rate of foreign direct investment into Malaysia from 2000 to 2007 was only one per cent, compared to 30 per cent for India, 12 per cent for Vietnam and 10 per cent for China.
The lower annual growth rate of FDI points to a number of factors; chiefly, a failure of the government to reduce its red-tape and enhance its efficiency and a lack of focus and positive results from its strategic plans.
Immediately after the 1997 Asian financial crisis, the government was aware of the inherent economic bottlenecks and growing competitiveness from emerging regional economies. The past administrations had merely responded with more slogans and nothing concrete.
In the last few years of Dr Mahathir administration, he had tried to introduce several reforms such as the use of English to teach Maths and Science in an attempt to broaden the use of English in Malaysia. Ironically, it was his regime's own language policy which had destroyed a good English education foundation inherited from the Bristish.
Mahathir had tried, with limited success, to enhance the efficiency of the civil service his efficiency programmes e.g. 'Bersih, Cekap & Amanah' etc.
His successor, Abdullah Badawi, vowed to work on enhancing the nation's soft skills or software but lost his focus almost immediately after his memorable speech at an Oxbridge dinner. For most of his term, Abdullah had wasted more time trying to promote and market his Islamic credentials, Islam Hadhari, without much success.
Najib is now trying to fix the obvious, a mediocre economy, lacklustre FDI growth, middle income trap and a deteriorating fiscal position.
He has introduced his own version of Government Transformation Programme (GTP). Like previous programmes announced by his predecessors, Najib's grand reform plan is going to face the same barriers; a lethargic civil service, a lack of capable implementers and a challenge to change the culture and work ethnics of public servants in the country.
Worse, the civil service has been grossly politicized by the government. Public institutions have lost the remaining shred of their credibility in the last 20 months over a number of issues and their involvement in political contestation between Barisan and Pakatan.
Does the government have enough political will to push the reform plan through the civil service? Or does it fear a lost of support from the more than 1.5 million strong civil servants?
According to the Roadmap, there was also an urgent need for the government to reduce spending as the country was in a fiscally-challenging position. It said Malaysia’s ability to finance improvements in its performance was limited, given that the country’s fiscal position has been worsening since 1997.
“We face a dilemma. There is an urgent need to reduce spending and yet deliver big economic and social outcomes fast.
Predictably, with the number of corrupt cases sprouting out from everywhere there are many more 'older cases' which were not disclosed or buried. Experts had put a lost of more than USD 200 billion to corruption in the last decade.
Ironically, Dr Mahathir had questioned the whereabouts of RM250 billion gained from oil and gas revenue in the last 6 years.
Without accountability, change in the political culture, positive reform to the education system, a strong political will to curb corruption and an emphasis on quality and innovation, it will be difficult for Malaysia to hope growing at 8% annually.
Simply, where is the growth going to come from?
What else is attractive in Malaysia?
For a start, there is a lack of goodwill factors in the country. The international news we had created for ourselves in the last 12 months were mainly disastrous and these negative coverage e.g. Allah squabble, power grab in Perak, PKFZ scandal, Kartika's case, Teoh Beng Hock death and others would not contribute positively to our international image and attractiveness as a FDI destination.
Can Najib deliver?
To achieve an average annual growth of 8%, political parties need to put their crave for power as secondary and work together to pull this country out from its decline. The road to Putrajaya must not be the only path.
For now, it is The Road to Recovery.