Free Malaysia Today
22 May 2015
By Tan Sri Ramon Navaratnam
The government must be given credit for an impressive 11th Malaysia Plan, the final lap in our pursuit of the Vision 2020 goal of becoming a developed nation.
Given the recent uncertainties on the economic and political fronts, the 11th Plan boosts our spirits as we look forward to holding our heads high as citizens of a developed nation.
But we cannot take for granted that we will realise the vision in five years’ time. The government and the opposition, civil society and individuals should altogether put their shoulders to the Malaysian wheel and heave the nation up to its new status. For this, there should be greater national unity and unity of purpose , regardless of race , religion and regional parochialism. We must support good leaders and good governance and we must must undertake to raise our commitment to do our best, each in his own area of work, to move the economy forward.
The six thrusts of the plan are significant. However, they will enhance delivery to the rakyat only if implemented effectively. Below are some concerns that need to be addressed in implementing the six thrusts.
We have to ensure that there are mechanisms to treat all underprivileged groups equally. For too long the original aspirations of the NEP have been ignored. Poverty was to have been eradicated regardless of race, religion and economic and geographical status. However, there have been strong public perceptions that some groups have received a higher preference than other marginalised Malaysians.
The plan’s emphasis on the bottom 40% income groups is therefore most welcome. This should cover all races so that the dichotomy between Bumiputeras and others can be gradually healed. Otherwise, come 2020, we will still be a disunited nation, and Vision 2020 would turn out to be an dream for most Malaysians.
Pursuing a Green Agenda:
This laudable goal cannot be achieved if we do not severely penalise all those who destroy our environment. The Cameron Highlands fiasco, the raping of our forests and the pollution of our life giving rivers cannot be allowed to carry on any longer. The public expects new laws and enforcement measures that are really punitive.
This is another commendable thrust. But all our public services have to be improved considerably in the short time we have before 2020 rolls in. Most Malaysians would feel a sense of distress, with rising prices, poor-quality education, declining safety and security and poor local government services. So why did the plan not provide for local government elections once again so that the people can participate in development?
: Our infrastructure network is impressive even for an advanced developing country. But in five years’ time, we must be able to compare our facilities to at least the minimum First World standards. We have obviously been paying too much for using our highways and other facilities and not getting our money’s worth. In the case of highways, for instance, concessionaires have apparently been making more than their fair share of money.
When there is intolerable corruption and wastage of public funds, the quality and quantum of our infrastructure deteriorate at the taxpayers’ expense. It is not wise to let this go on because the people will react at the polls.
Speeding up Human Capital Development:
It is good to know that the government is now giving much more priority to vocational and technical education. Not all students enjoy academic studies, especially when they are compelled to learn from uncommitted and poor-quality teachers. Hence, the focus on producing a skilled workforce will help greatly to raise employment opportunities as well as salaries and thereby reduce income disparities that can cause social dissatisfaction and even unrest.
Re-engineering Economic Growth:
The 11th Plan aims to boost the manufacturing, agricultural and service sectors. This is necessary, but what is so new? I can recall that as far back as the 1960s, when I was involved directly in plotting the government’s five-year plans, we were always keen on developing these areas.
But I can understand the government’s reluctance to outline specific fields of innovation that may be impractical to follow through, given the poor international ranking of our universities. In order to move more aggressively in competition in a globalised world, we have to be much more competitive and meritocratic at home. Can we achieve this mindset by 2020?
Nevertheless, it is vital that these six thrusts are implemented in the right macro environment and management.
The 11th Plan’s macro framework has been well constructed. But we have to remember that a plan remains a plan until it is acted upon, and success depends on many factors. The 11th Plan has to be based on economic assumptions such as the world economic outlook, oil prices and the international and domestic confidence in the government`s ability to rule with good governance and fairness, and not with state capture in mind.
The projected economic growth rate of 5-6% per annum, under the present circumstances and prospects, appear reasonable. Of course this assumes continuing political and social stability and rising rather than declining investor confidence.
But holding the inflation down to 2.5-3.0 % per annum may be a greater challenge than achieving 6% growth. The inflationary psychology and the GST has placed undue pressure on prices and this may be difficult to shake off unless productivity rises substantially.
But raising labour productivity from RM77.1 per worker to RM92.3 may be over ambitious, considering that we will have basically the same labour force in the short term and that education reforms, if any, would not have taken root by 2020. Hence increasing household incomes from RM 6,141 to RM 10,540 by 2020 could also be a hard target to attain. But if we raise our minimum wage further, this could be possible, but then what about the impact on inflation if productivity does not rise at least in tandem with wage increases?
The 6% growth is premised upon the assumption that private consumption and investment will grow by 7.9 % per year.
Is it healthy for consumption to expand so fast? And will private investment increase fast enough when government investments slow down? These are difficult assumptions to deal with. Hopefully, investments will rise as planned. But we must ensure we have the right climate. Investors cherish stability and moderation. Hudud laws will not help.
Macro planning and effective implementation are not easy, especially for a relatively small and very open and complex multicultural economy.
Hence an economic plan will remain just a plan if we do not have a more accommodative and business friendly environment.
What we can all do to realise the plan’s objectives is to go all out to ensure good governance. This is well within our national capacity and competence if we have the political will.
But if we get too preoccupied with unnecessary and wasteful politicking and race and religious squabbles, then the impressive 11th Malaysia Plan will remain just a plan.
Tan Sri Ramon Navaratnam is Chairman of the ASLI Centre of Public Policy Studies
To view the original article, click here.
Back to Top