Wednesday, February 01, 2012
Economy: Malaysia's Lost a Generation
CIMB chief Datuk Seri Nazir Razak has blamed the impending election fever for distracting economic reforms. He is only marginally correct. Malaysia has been dragging its feet on real economic reforms since the Asian financial crisis in 1997. In fact, disagreement over the right measures to be taken had resulted in a major leadership fallout between Dr Mahathir Mohamad and Anwar Ibrahim.
Malaysia's economic is akin a slow motion train heading towards a wreckage if the right reforms are not being administered. The country is dependent largely on its natural resources e.g. oil and gas, rubber, timber and palm oil. Malaysia has been running a budget deficit (at least 5%) since 1997 despite posting impressive trade figures.
Why is there a lack of real economic reform? The prime reason being politicians are not able to adapt and embrace change themselves. Political parties are still functioning through a narrow and highly bias political model and mindset. Parochialism and nepotism still run deep within the political power bases. If politicians are not able to change, how can we expect them to lead real reforms?
To these politicians, the words 'democracy' and 'empowerment' have no real meaning. Policies are introduced as mere slogans. Fancy on the outside but empty on the inside. Hence, the New Economic Model, 1Malaysia, ETP. KRA, GTP et cetera are mere sloganeering. The opposition are not much better too. They are peddling change but what is really their definition of change? Both coalitions have made promises to the voters which will eventually turn Malaysia into a welfare state. Handouts after handouts were promised to the voters. These handouts are coming out from the pockets of the next generations.
Alas, Malaysians are left directionless. Governments around us have embarked on real reforms, providing real and visible direction to their peoples. Even our own people are inspired. As a result, we have been registering a negative flow of investment - more are going out than being invested locally.
Malaysia's failure at real economic reforms can be attributed to selfish politicians who wanted to hold to power perpetually by playing up race and religious sentiments. Until and unless the majority wake up, this strategy, regardless of its pariah status, is going to prove very effective in mobilizing the masses to vote based on race and religion.
Hence, the political discourse in this country is centered on issues which are often categorized as tabloid news in other countries e.g. sexual scandals, mass design to convert Muslims, petty racial squabbles, personalities and dramas.
The death of the third estate is making the situation a lot worse. Where is the platform to discuss local and regional economic issues, challenges and opportunities?
Malaysia's economy looks good on the outside e.g. low unemployment, high car sales, good property growth but is the real income improving? Is average Malaysian feeling richer and can better afford a higher quality living? With entry level salary staying stagnant over the last 15 years and cost of living more than tripled, there is very little to suggest that Malaysians today are richer and enjoying a better quality life compared to a decade ago.
Like Nazir, a lot of us are talking about economic reforms. The Prime Minister has been fiddling with his own reforms plan, the New Economic Model, since the start of his premiership and 2-3 years before the next general election but nothing has came out of it. He could not even conclusively tell us if there is going to be a total revamp and discontinuation of the flawed NEP policy. Why blame the election fever entirely?
Does the current leadership even know where to start the reforms?
Sadly, political parties and politicians are only concerned about winning power, gaining two-thirds majority but not on where Malaysian should be heading in the next 3-5 years as more regional economies are beginning to steer and implement reforms at lighting speed to attract scarce global resources and investments.
Let's talk about reforms in the next post.