Review: A Malaysian Economic Agenda

http://www.keadilanrakyat.org/library/documents/mea.pdf

Our Parti Keadilan Rakyat (PKR) advisor, Datuk Seri Anwar Ibrahim wrote a compelling summary of Malaysia's economic status in a leaflet entitled A Malaysian Economic Agenda, As I See It. You can access it from the link above.

The couch potato, however, may read my summary. Among our economic woes he highlights are:

1. The NEP

... has produced upward social mobility for certain sub-sectors of the majority Bumiputeras
...creating a sub-class of Bumiputera professionals and engineering and urban Bumiputera middle class
...special Bumiputera shares, contracts and privatization deals that are channeled to well-connected parties

2. Worsening disparity

...worse income disparity gaps in Southeast Asia, behind even Indonesia and Thailand, as measured by it's GINI coefficient of 0.47
...second worse in all of the Asian countries...only Papua New Guinea ranks worse
...is a paradox...Malaysia is no longer an emerging economy or a third world nation in terms of development: in the United Nation's Development Programme's (UNDP) 2004 Human Development Report
...HDI score of 0.793...on the threshold of the UNDP's definition of a 'Highly Developed Country', which is a score of 0.800 or above

3. Poverty

...has not been mitigated.
...although...fall in absolute poverty levels in Malaysia from 29% in 1980 to 5-6% in 2000, the income threshold used to measure the poverty line is absurdly low...RM510

4. Corruption

...44th place among 163 countries surveyed on Transparency International's 2006 Corruption Perceptions...down from 39th position last year.
...annual survey...by the Hong Kong based Political and Economic Risk Consultancy (PERC)...Malaysia ranked 7th with a score of 6.25, worse than in 2006 when Malaysia scored 6.13

5. Protectionism and lost of competitiveness

...1997, before the crisis, Kuala Lumpur Stock Exchange ranked as the highest in Southeast Asia...in 2003, we ranked lower than Singapore and Thailand.
...FDI...plunged to US$3.87bil last year from US$4.62 bil in 2004
...bucked a generally rising trend. Overall FDIs to South, East and Southeast Asia reached a new high of US$65bil
...overtaken by Indonesia in the FDI stakes for the first time since 1990
...one of the reasons...other countries more transparent and offer greater ease in doing business...it takes 450 days and 31 procedures to enforce a contract in Malaysia, whereas it takes just 120 days and 29 procedures in Singapore.

6. Privatization policy failure

...PROTON is a struggling brand desperately looking for strategic alliances
...PERWAJA has failed spectacularly by running up liabilities of RM13 billion

Oh I like this:

we should not be persisting in the futile exercises of comparing ourselves with nascent economies like China and Vietnam...There is no pride in being the first among a bunch of mediocre competitors; instead we should aim to be the first among equals

He then goes on to compare Malaysia to Singapore citing a whole host of statistics which are to depressing to repeat. Further on, he gives suggestions, well-intentioned but rather abstract and lacking in practical plans, to solve our economy's problems.

I couldn't have said things better myself. However I don't agree that privatisation has brought only trouble. He suggests that 'there needs to be a reversal of policy from poorly-managed privatization to efficient and transparent public management for key sectors such as healthcare and transport.' Then he goes on to describe how PLUS has benefited only primary shareholders and private hospitals have increased both medical care and insurance charges.

Alamak. A reverse back to public responsibility of such would be tedious, slow, difficult, complicated and a whole waste of time and money. How come Anwar didn't consider introducing more competition? Perhaps the reason costs are so high and quality and delivery are so poor could be the monopoly hence the complacency of the sole company in the market? Maybe the market for healthcare an transportation could be an oligopoly instead. I mean, examine the mobile phone service providers. We're constantly getting cheaper rates and better deals while their profit's rising. See: http://www.telecomasia.net/article.php?id_article=7111 and http://www.mindbranch.com/Maxis-Communications-Bhd-R313-30508/. Oh but this is a H1 econs student's opinion.

I, for one, would like to see more of Anwar's opinion oh why he favors public control over more competition. What a pity it is difficult to find access to healthy debates and discussion online.
Given that Malaysia is predicted to become a net importer of oil by 2011 (http://thestar.com.my/news/story.asp?file=/2008/3/14/focus/20640241&sec=focus)
or at least before 2020
(http://www.peakoil.com/article5978.html , http://www.energybulletin.net/22213.html) ,
and that our country is heavily dependent on oil revenue
(federal government non-oil primary deficit estimated at 7 percent of GDP, source: http://www.imf.org/external/np/sec/pn/2006/pn0630.htm)
...the country's prospects aren't looking good for my generation.