Blogger etheorist's most recent posting entitled, How To Repair the Malaysian Economy is very pertinent and instructive. It is a clear and concise exposition on the ten key principles that Malaysians, particularly the political leaders and economic managers, should have in mind NOW instead of waiting for the coming years when Malaysia's oil spigots inevitably runs dry. I am reproducing the posting in full here. It is, indeed, worthy of your attention.
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When the dust settles, what would we see?
An OECD paralysed, with a financial system staying barely afloat.
China may use the opportunity to refocus growth from foreign-owned export industries to local-owned domestic-oriented firms especially in major inland cities. There will be oppportunities for investors outside China to produce quality inputs for Chinese industries.
What will happen in the Malaysia economy? What must be done to repair the Malaysian economy?
The traditional Malaysian society and economy that we all have grown up in have been drastically changed - some would say destroyed.
We are no more Malays, Chinese, Indians and native Sarawakians and Sabahans.
Malaysia is now a mixture of billionaires, foreign workers, a whole bunch of speculators in shares and real estate, and consultants to government departments and GLCs.
We are all in for the quick gain. As opportunities for windfall gains evaporates as the oil money runs out, we are all assassinating politicians for being empty handed.
First, beef up internal security to prepare for a spate of recession-induced crimes in the street.
Second, repartriate low-wage foreign workers. They are the ones that keep wages low and inhibit the use of technology in the economy - including construction.
Third, focus on investments - for exports to China. Malaysians should try to hire local professionals of all races. It is far better than attracting foreign investors to hire local professionals of all races.
Fourth, Malaysians should close ranks to work on putting together the fragmented economy (and the fragmented institutions). The divisive politics has destroyed the economy, and we do not need any 80-year olds to paddle us old-fashioned ideologies. For goodness' sake, we are in a globalised world - and what race are we talking about or are we really talking about power, monopoly, disgraceful wealth and opulence on the backs of those who toil.
Fifth, create a Third Force - the Liberals who care for the creation and spreading of economic opportunities throughout the whole society regardless of race or religion. We should take all key issues in Malaysia including the NEP-type and work out effective and transparent ways of balancing out wealth distribution, instead of the very crude old-fashioned quotas and licenses. There should be price-incentives to induce productivity gains and market-based wealth creation.
Sixth, sit down and do some proper political and economic analyses and publish them in peer-reviewed journals, even if of local origin. We have too much of foreign models using local data, and not enough original local thinking taking into account local conditions.
Seventh, we should take the Minister of Finance portfolio away from the PM and the DPM and give it back to the Minister of Finance. The PM should concentrate on national harmony and the DPM on internal security. The Minister of Finance on government spending and finance. The Central Bank on fighting inflation and financial speculation. Let the private sector a free hand to undertake investment. Remove politics from investment decisions.
Eighth, we have enough infrastructure to last another generation. We have expanded the aggregate supply curve. Let us work to use the infrastructure efficiently. Move the aggregate demand curve.
Ninth, reinstate the role of professionals in the economy. Remove politically-oreinted managers from public places.
Tenth, reinstate the role of markets in the economy with price movements doing the resource allocation. Let the people work, sweat, earn and keep. .
_______________________________________________
When the dust settles, what would we see?
An OECD paralysed, with a financial system staying barely afloat.
China may use the opportunity to refocus growth from foreign-owned export industries to local-owned domestic-oriented firms especially in major inland cities. There will be oppportunities for investors outside China to produce quality inputs for Chinese industries.
What will happen in the Malaysia economy? What must be done to repair the Malaysian economy?
The traditional Malaysian society and economy that we all have grown up in have been drastically changed - some would say destroyed.
We are no more Malays, Chinese, Indians and native Sarawakians and Sabahans.
Malaysia is now a mixture of billionaires, foreign workers, a whole bunch of speculators in shares and real estate, and consultants to government departments and GLCs.
We are all in for the quick gain. As opportunities for windfall gains evaporates as the oil money runs out, we are all assassinating politicians for being empty handed.
First, beef up internal security to prepare for a spate of recession-induced crimes in the street.
Second, repartriate low-wage foreign workers. They are the ones that keep wages low and inhibit the use of technology in the economy - including construction.
Third, focus on investments - for exports to China. Malaysians should try to hire local professionals of all races. It is far better than attracting foreign investors to hire local professionals of all races.
Fourth, Malaysians should close ranks to work on putting together the fragmented economy (and the fragmented institutions). The divisive politics has destroyed the economy, and we do not need any 80-year olds to paddle us old-fashioned ideologies. For goodness' sake, we are in a globalised world - and what race are we talking about or are we really talking about power, monopoly, disgraceful wealth and opulence on the backs of those who toil.
Fifth, create a Third Force - the Liberals who care for the creation and spreading of economic opportunities throughout the whole society regardless of race or religion. We should take all key issues in Malaysia including the NEP-type and work out effective and transparent ways of balancing out wealth distribution, instead of the very crude old-fashioned quotas and licenses. There should be price-incentives to induce productivity gains and market-based wealth creation.
Sixth, sit down and do some proper political and economic analyses and publish them in peer-reviewed journals, even if of local origin. We have too much of foreign models using local data, and not enough original local thinking taking into account local conditions.
Seventh, we should take the Minister of Finance portfolio away from the PM and the DPM and give it back to the Minister of Finance. The PM should concentrate on national harmony and the DPM on internal security. The Minister of Finance on government spending and finance. The Central Bank on fighting inflation and financial speculation. Let the private sector a free hand to undertake investment. Remove politics from investment decisions.
Eighth, we have enough infrastructure to last another generation. We have expanded the aggregate supply curve. Let us work to use the infrastructure efficiently. Move the aggregate demand curve.
Ninth, reinstate the role of professionals in the economy. Remove politically-oreinted managers from public places.
Tenth, reinstate the role of markets in the economy with price movements doing the resource allocation. Let the people work, sweat, earn and keep. .
1 comment:
These ten principles reflect their author has thought hard on the matter and integrated everything to its roots.
The only thing required to execute them is political will. Unfortunately the lack of that same thing is what has been causing many of the problems underlying the need for those principles. One can only hope that those in power will see the urgency and face enough reality to do the right thing for once. Otherwise we will just be delaying the inevitable and making it more costly for future generations to try and solve those problems which by then would have ballooned to unmanageable proportions.
Let me humbly add some small questions on some. To replace man with machine needs capital to buy the machine and that is taken as a loan. For the SMEs, do they easily get loans on merit only or are other socioeconomic factors thrown in? For the bigger companies, are their pipelines long enough to justify heavy capital asset investments during these times of irrational market behavior and uncertain orders flow? And for both from a national context, how fast can we ramp up our design innovation and intellectual content for every item we make or construct so that we can quickly speed pass the automation stage that everyone else will be expected to be doing in order to find new cost advantages, and enter the value-adding stage that we must be in order to create a pocket of relief from the vagaries of future shortfalls?
Secondly, more local analysis is fine, indeed welcome. The problem is the paucity of both credible data and motivated authors. The problem exists because we are not exactly a numerate society, unlike say the japanese; neither is research and writing something which pays enough; the problem of finding good literature one can use in the language one has been drummed in is also insurmountable.
(chortle)... and to think four days after my last LCE paper so many decades ago, i actually sat down and analysed one of the Malaysia Plans then and found the numbers, well, padded; i obviously didn't learn my lesson later..when determining such things about a branch of a bank right down to the amount they had spent in which month on bullets for the firearm of their security guard. ;P
Thirdly, i just hope there's someone who will hazard a study on what he (or she) thinks will happen to this country if we adopt the HK model - of complete open-up. I am envisioning something even more drastic. Not just the whole country being duty-free but the whole notion of a country in the traditional sense obliterated and replaced by just functions.
..better get back to my foxhole. ;P
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