06 December, 2009

National economic outlook: Believe it or not?

At long last, is this the signal that the government is starting to acknowledge the folly of its economic policies?

Are the winds of economic reform finally blowing across our country? Or is this just another pretty but inconsequential speech delivered by someone who has spent much of his political career as an Umno insider, and one who many cynics will point out is part of the toxic system that is slowly but surely bringing the country’s economy to its knees.

Minister of Finance II Ahmad Husni Hanadzlah’s speech on the occasion of the ‘National Economic Outlook Conference 2010-2011’ in Kuala Lumpur last Tuesday (Dec 1) contains many of the right ideas and initiatives to restart our swooning economy:

* Boosting private initiative as the primary
engine of growth.

* Improving the dynamics of competition in the
domestic market place.

* Raising the private and social returns on

* Moving Malaysia away from its low-value-added, low-wage and low-productivity structure.

* Allowing meritocracy to prevail.

*Stressing transparency and adherence to the highest standards of governance.

* Encouraging greater participation from all races in the public institutions, where performance is the key measurement.

* Implementing better competition policies and fostering a better regulatory environment which can allow market forces to operate in an orderly manner.

Not new ideas

All these ideas underscore a tacit acknowledgment that the success of the nation’s economy must take precedence over the short term interests of a few protected groups.

They are not new ideas; many of them have been around for at least over 20 years since 1990 when the NEP was supposed to have come to an end. Instead what’s happened has been another two decades of retooling the NEP and in many cases even reinforcing its stranglehold on the economy for the sake of – as what the minister’s speech has correctly pointed out – “a few protected groups”.

In the next few weeks and months, we look forward to hearing more concrete details of how the long overdue changes to the country’s economy and society (and the related political and other key institutions) will come about. We will monitor these details and assess what they are worth.

Ahmad Husni’s exhortation in his speech that “1Malaysia equals inclusivity and [that] by being inclusive, we introduce competition” makes fine rhetoric but unfortunately we have been disappointed too many times before.

- Dr Lim Teck Ghee

(DR LIM TECK GHEE is director of the Centre for Policy Initiatives. )

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