Tuesday, July 29, 2008

Infrastructure: Time to Compete to Win

I have borrowed the title caption from an article by a member of the US think tank, the Brookings Institution. It serves to underline the strategic vision of the federal government under Dr M which appears to be markedly absent in recent years. Here's an excerpt of Lael Brainard's article that urges the US to improve its transportation and logistics infrastructure:
When (U.S.) athletes land in Beijing, they’ll find that the new terminal at Beijing Airport is larger than all of Heathrow Airport, the world’s third busiest. China’s investment in rail infrastructure – almost $200 billion from 2006 to 2010 – is the beginning of the largest expansion of railway capacity undertaken anywhere since the 19th century. And in just the last 15 years, China has built a highway network that rivals what it took America 40 years to build.

These investments reflect an unprecedented shift in the balance of global economic power that is fundamentally altering the contours of how we compete in a global economy. For two generations, the world economy was defined by only seven countries -- Canada, France, Germany, Italy, Japan, the UK and the United States -- which produced two-thirds of world output.

But the last five years have seen the beginning of a dramatic change as major emerging economies, from China to Brazil and India, grow rapidly, aided by governments that make investments for the long-run, like in infrastructure. From 2002 to 2007, the G-7 share of world output fell from 65% to 57% and, according to Brookings scholar Homi Kharas, will likely decline to 37% of world output by 2030. Meanwhile, the major emerging economies’ share of global output jumped from 7% to 11% and is set to hit 32% by 2030, almost catching-up to the G-7.

To remain globally competitive, the U.S. needs to invest for the long-term in infrastructure, among other efforts, as we did under President Roosevelt with rural electrification and under President Eisenhower with the creation of the Interstate Highway System.

One of the focus of my blog is to try and contribute to strategic issues and goals that will make Malaysia more competitive. It's not easy to do so without any research grants. It's a labour of love, love for the country and fellow Malaysians. It's also an effort drawn from the indignance that I feel when political developments in Malaysia is seen in a bad light at the international level. It also stems from the fear that the future generations of Malaysians will be more lazy and stupid due to an education system that pulls good students down to a level and average that is below international standards (prompting almost all BN leaders to send their own children to private schools, including the children of the Minister of Education himself).
Forgive me the digression above. I sometimes suffer from what I call intellectual incontinence caused by indignance!!!
Back to the issue of infrastructure. Dr M wanted a double-rail tracking project. He wanted a crooked bridge. And, several more mega projects. Most, if not all, were shelved by the current Administration.
In the aftermath of GE2008, the Penang Outer Ring Road (PORR) and Penang monorail project was shelved. The Penang 2nd Bridge was almost shelved.
These events tell me only one thing; the federal government is overly political in matters of economic development; the politicians in federal power today are short-term tacticians (rather inept ones, if I may say so). These characteristics are dogging the current Administration. But, worst of all, these characteristics come at a high price in the context of Malaysia's flip-flop approach to economic management and economic development.


Pat said...

Hi CT,

I get what you're saying here: that things don't bode well for us. I just wonder how they think they're gonna fix things. Or are they not bothering to even try?!

And about our education/schools: memang you're right here, too. 'Bright sparks not allowed' should be our schools' motto. No questions, no theories, no ideas - just shut up and listen and do the tests! Our kids are taught not to think, by people who don't think, working for people who never think, it seems!


de minimis said...

Hi Patricia

The problem with M'sia's system of governance is that Dr M was like a banyan tree who cast a long and big shadow over 2 decades. Given his intellect and his tendency to brook no alternative views, the level of intellect dropped heavily to the point where Cabinet members and economic planners shifted from brilliant thinkers to sycophantic idiots. But it was not apparent when Dr M was around because he tapped into non-party and non-political people like Kenichi Ohmae and Alvin Toffler.

The problem is that after Dr M's retirement, he left a huge void. One suspects that he chose Badawi because he thought the latter would be pliable. But when Badawi attempted to develop a spine, the fecal matter hit the ventilator and we are left with the fecal spray!!!!

In this intellectual vacuum we not witness policy flip-flops that are very detrimental to coherent economic planning. The intellectual talent is still here. But, the problem with the political and governance system is that the people in charge only believe and subscribe to technical "know-who" instead of technical "know-how".

What we need is an inclusive governance and economic planning system that welcomes any constructive input; that scours blogs to uncover ideas; that follows up on those ideas with the initiators of the ideas (instead of plagiarising without understanding).

There I go again, getting prolix!

Pat said...

Prolix away! Hahahaha!

And, I get it: shit hit the fan and we're all drowing in it! Mixed metaphors, but who cares?


Anonymous said...

ct choo,

What you have written makes perfect sense. Even from someone without a good economic background, what you said about infrastructure, especially social infrastructures that would benefit its people as opposed to corporate or symbolic infrastructure like tall buildings and mosques, have hit the right note.

Public infrastructure is essential to a developing country like ours for its people to progress in this ever-increasing globalised world, where people living anywhere in the world are brought closer with each passing day. No nation lived in isolation now. We all depend on each other for survival, through trade and cooperation. Those few that did, like North Korea and refuse to change will never progress in an ever-changing world, where change is the only constant.

As you mentioned, the government in those countries had its priorites right, whereas it's totally different here. Investments are for short-term as opposed to long-run here. And when something goes wrong, like for example the KL monorail system, they try to do 'patch work' to rectify.

People do not mind working hard, but at the end of the day, they are only asking for a more comfortable life for themselves and their children. Is not that a basic human rights? While the people entrusted to govern only want a comfortable life for themselves and their families.

Yes, the powers-that-be are short-sighted. If not, how else do we explain the pathetic road and transportation-system we have here (and those people still said we have the best roads in South East Asia). This is only one of many issues, albeit an important one. Is there anything wrong here? You tell me. And i am only a layman here.

On another note, i am a product of this education system too, and do not know how to think critically until much later in life (still in the learning stage actually). I do not want my children to be blind and deaf too.