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Tuesday 9 February 2010

Government still looking for New Economic Model answers

By Lee Wei Lian - The Malaysian Insider

KUALA LUMPUR, Feb 8 — The Najib administration is still open to suggestions for the New Economic Model (NEM) framework that it says is the “final push” for Malaysia to achieve developed nation status.

Prime Minister Datuk Seri Najib Razak said today that the NEM framework, which was supposed to have been unveiled this month, will be announced by the end of March and that the government still requires public input and is prepared to listen to constructive proposals.

In a sombre keynote address at the opening of the 1 Malaysia Economic Conference here this afternoon, Najib also said that Malaysians need to face up to new realities including the removal of energy and other industry subsidies and greater competition from free trade agreements with China.

He also called on the business community to pool its intellectual resources with the government to chart a course for the country as a “dynamic and forward looking nation”.

“My government has adopted and it will continue to adopt a spirit of openness in its policy formulation,” said Najib.

“Let me say that despite our best efforts, we still do not have all the answers. We require input and are prepared to listen to all constructive proposals especially in connection with the formulation of the New Economic Model and the 10th Malaysia Plan.”

Malaysia is widely acknowledged as being caught in the “middle-income trap”, as it is neither a low-cost country nor a developed country.

The government is counting on the NEM to give it a roadmap to become a developed economy.

However, all members of the media were asked to leave the hall before the question-and-answer session between conference delegates and the prime minister.

According to some conference delegates who spoke to The Malaysian Insider, the session with Najib was milder than the morning session where many issues were raised by the delegates and speakers, such as the issue of brain drain and the effects of race, religion, political patronage and lack of meritocracy on the economy.

Najib did, however, acknowledge the brain drain problem in his speech, saying that there were between 300,000 and half a million Malaysian professionals working abroad.

He said that low wages were part of the problem and that Malaysians were paid less than in developed countries and even some emerging markets but stopped short of touching on the social pressures such as the feeling of discrimination and the lack of prospects that led to many of them taking their talents out of the country.

“These are some of our best brains and we must find ways to incentivise them to return and contribute to the country,” said Najib.

He also urged government-linked companies to foster closer links with the private sector and not work in isolation.

The prime minister added that his administration is committed to streamlining policies, institutions and procedures to spur private investment, improvement in the quality of education, and the 1 Malaysia platform to unite the various communities and classes in the country.

“The central feature of the new economic model must be predicated on human capital,” said Najib.

He also said it was “extremely critical” that Malaysians create more intangible assets such as proprietary technologies and intellectual property in order to emulate the competitive edge of developed countries.

The two-day economic conference is organised by the Associated Chinese Chambers of Commerce and Industry of Malaysia and was held at the KLCC Convention Centre.

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