An article written by Tan Sri Ramon Navaratnam last month, ‘Get real on economic facts’, caught my dreary eyes. There I was lying my head over two pillows and reading this article while waiting for my eyes to tell me it is siesta time.
What attracts me is his comments on Pemandu’s economic update to be more transparent and balanced. It seems the views were based on stated consultations with “eminent government figures” and the three international ratings agencies who are not on the ground. A possibility exist for a credibility gap and a serious disconnect between the Government’s and the people’s perception of the country’s economic situation and the people’s own sense of well-being and their future prospects. He was concerned by Pemandu’s tendency to defend the indefensible which is causing a credibility gap and public pessimism.
On the subject of economy, the subconscious part of my brain immediately did a playback. I recalled when Tun Mahathir tabled The Way Forward (Vision 2020) paper in 1991, I was in Singapore attending a conference.
Wow... that was almost a quarter of a century ago.
Since then the rakyat have been steadfast in pursuing this Malaysian ideal. Serious we were, it was redefined and re-calibrated in 2009. It was then said that in order for Malaysia to achieve a developed nation status by 2020, the country has to grow at an annual rate of 8% over the next 10 years. A lower hypothetical growth of 6% per year would delay this vision by 10 years to 2030.
A few days ago, we were told we are definitely still on track for high-income status by 2020. Over time, exchange rates will reflect the fundamentals of an economy and monetary policy - of which, ours are strong.
I take this opportunity to congratulate Pemandu (the brainchild of the PM) in coming up with the Government Transformation Programme (GTP) and Economic Transformation Programme (ETP) - its main role and objective. Working alongside the civil service in transforming the government, it addressed key areas such as corruption, crime, low income households, rural development, urban public transport and cost of living.
It is understood that the difficulty in the Government today is to capture the middle ground amidst a world of polarities.
Back to Tan Sri Ramon’s comments on Pemandu’s economic update, I would like to add a few on Pemandu’s Annual Report 2014. Another analysis was skilfully crafted by En Azlan Awang, co-founder of Blindspot, in May 2015.
Personally, I do not want to see the negatives and get excited when the picture painted is one of doom. It is because I may not have that many more years but my concern is for the future generation of Malaysians who will be asking what did our forefathers do to correct the situation.
In the 2014 Annual Report, the statement by the prime minister that “We are now at the halfway point of Malaysia’s goal of achieving developed nation status by 2020” is obviously not correct given the Vision was tabled in 1991.
It was also stated that our fundamental commitment is to ensure that each and every Malaysian is accorded a good quality of life. And the seven National Key Results Areas (NKRAs) under the GTP have been focused to do just that. Sadly, the state of things since the implementation of GST and other ‘rationalisation’ measures, in general, proves otherwise. Cutting one’s sleeping time to use non-tolled roads may be counter-productive.
The GTP is supposed to be strongly committed to raising education standards and creating a robust learning platform for our students. And our children represent an invaluable resource for Malaysia’s future. So how then do we explain a reduction in the annual allocation for institutions of higher learning by 16.5% in the 2016 budget?
Saying Malaysia is in an enviable position against a landscape where advanced economies continue to struggle for growth is not exactly acceptable because we invested a lot to implement the transformation programmes.
Showing we have reduced crime rate with a reduction of overall index crime by an average of 6.6% per year since 2009 does not seem to support the ranking of the safest and peaceful country where in 2011 we are at 19th spot but in 2015, 28th! Does it mean other countries are doing a far better job even without transformation programmes?
In the report for Corruption Perceptions Index, we moved up to 50th spot in 2014 from 53rd the previous year. However, in 2008 we were at 47th spot. There is some catching up to do.
For assuring quality education, high performing schools increased in number to 128 but how was their performance viv-a-vis other schools. I wish to quote Dr. Mohamed Khir Toyo, sometime ago wrote in his blog titled "Which is more important, SBT (Sekolah Berprestasi Tinggi) or Kids in the rural area?
There were some improvements in raising living standards of low-income households, improving rural basic infrastructure and improving urban public transport NKRAs. But it could have been better.
The ETP launched on 25 September 2010 has a goal to elevate the country to developed-nation status by 2020 and targeting GNI per capita of US$15,000. This will be achieved by attracting US$444 billion in investments which will in turn, create 3.3 million new jobs.
In my view, effectively, the Transformation programmes replaced the Vision 2020 paper which encompasses all aspects of life, from economic prosperity, social well-being, world-class education, political stability, as well as psychological balance. The target then was an annual GDP growth of 7% (in real terms) over the thirty-year period 1990–2020.
Given the actual growth rates of 7.4% (2010); 5.2% (2011); 5.6% (2012); 4.7% (2013) and 6% (2014), would we be able to do a ‘catching up’ in the next five years given the uncertainty and volatility in world economics? Even the forecast for 2016 does not exude confidence.
To avoid the future generation of Malaysians asking what did our forefathers do to correct the situation, I wish to offer a few suggestions.
First, I strongly urge for reduction in the use of foreign consultants. An example is the Modern Policing Programme. For obvious reasons, trying to imitate what is or was done in USA would not work in Malaysia. We have former IGPs and a bigger number of well qualified ex police officers and even serving ones who could provide better input. Wasn’t there a plan to reduce foreign contents/costs for projects?
For future reports, it would be more meaningful to compare yearly results from 2009 to show progress on all items proposed in the overall transformation programme. It should not only show quantitative results but also qualitative.
A comparison with other countries or our ranking in the world would be useful. Our GNI per capita in 2014 was US$10,426 an increase of about only 3.6 per cent from 2013. In 2013, we were ranked 80th in the world and was lower than the GNI per capita of the world of US$10,547.
Next, accuracy. One example is EPP #3. The report card for 2013 showed MRT Line 2 & Line 3 — Completion of Final Implementation Plan after agreement with the relevant stakeholders for Economic Council/Cabinet’s decision — achieved 100 per cent. However, a statement made by the former MRT Corp CEO in December 2014 on the status of MRT Line 2 says it is still at the proposal stage as it has first to be put up for public display, get public feedback first and then get approval from the government.
It will be more informative to include a cost-benefit-analysis. It was reported the total 2011 NKEA budget covering operating and development expenditures, amounts to RM355 million and RM5.5 billion, respectively. For 2012, a further RM6.4 billion has been allocated for development expenditure.
Last but not the least, with our exposure to uncertainty in the external environment, shouldn’t we revisit, redefine and re-calibrate the Vision again.
Earlier I mentioned Singapore. I think it is no harm to compare ourselves with Singapore. The World Bank reported the GDP per capita in Malaysia was last recorded at US$7,304 in 2014 and is equivalent to 58% of the world's average. The GDP per capita in Singapore for 2014 was at US$38,087 and is equivalent to 302% of the world's average.
Taking the increase in GDP (current prices in US$) from 2011 to 2014, the increase for Malaysia is 13% and 12% for Singapore. But then, we have a Transformation programme running.
I think Malaysians want to see results and it is certainly not in the belaboured hours spent in ‘strategic brainstorming’ especially with foreign consultants.